Through a special arrangement, what follows is an excerpt of a current article from CPGmatters, a monthly e-zine, presented here for discussion.
Data synchronization is key to the efficient operation of the supply chain. In recent years, progress in the vision and scope of data sharing is driving a demand-based planning model as opposed to the more traditional push-based model.
For example, Supervalu is synchronizing supply chain data with hundreds of suppliers using the 1SYNC data pool via the Global Data Synchronization Network. But much work remains, especially around data accuracy. Unless CPG manufacturers ensure that their product data accurately reflects the physical attributes of their products, the benefits of data synchronization will be lost.
"Unfortunately many retailers are providing inaccurate on-hand information in their activity files to vendors," said Chad Symens, president and CEO of Rainmaker Data Warehousing. "When a vendor is unable to trust the on-hand data, they are left with a large hole in their decision making toolkit. Most vendors are receiving activity data from multiple retail customers so it becomes a difficult exercise to determine the data quality for each file and then determine the most appropriate course of action to deal with the missing, or inaccurate data."
Rory Granros, the director of industry & product marketing for process industries at Infor, said data synchronization must move from a late-in-the-cycle activity done to meet retailer mandates to a holistic process at the beginning of the product lifecycle and integrated into new product development and introduction.
"Understanding the retailer's requirements ensures the product is developed to meet specifications and mandated data is captured and integrated via a Product Information Management (PIM) - solution with data synchronization," said Mr. Granros.
Mr. Symens sees the need for more direct collaboration between buyer and vendor. Some progress has been made in this regard using CPFR (Collaborative Planning Forecasting and Replenishment) processes but the model tends to be too intensive for all but the largest vendors to engage in.
"In the future, retailers need to define a more lightweight collaborative process built around demand activity data sharing and simple yet measurable goals for each party," he said. "The primary objectives will be to monitor sell-through and on-hand for the top items in a given category for each vendor. A simple scorecard and exception-based analysis tools must be created and agreed upon between the retailer and the vendor to achieve the full benefits of this model."
Tom Duffy, the director of Business & Industry Partnerships of Nielsen's TDLinx division, promotes the need for a clean customer master data. Enhancing the process would be a unique identifier, the ability to track and manage company hierarchies, store location openings, closings, change of ownership and so on.
"Having the ability to use one number to aggregate to a common view of the customer, integrate disparate data and related activity, communicate seamlessly on a code-to-code basis and evaluate in any frame of reference delivers great return on investment."
Discussion Questions: What do you think of the ideas presented in the article to improve data accuracy and overall data synchronization between retailers and suppliers? What hurdles still need to be overcome?