Supermarkets back supply chain standard to save £1bn

Supermarkets and big brand suppliers are backing a proposal to bring a product data standard to the UK which could save £1bn in supply chain costs over five years.

Supermarkets and big brand suppliers are backing a proposal to bring a product data standard to the UK which could save £1bn in supply chain costs over five years.

The UK's four largest supermarkets, Asda, Morrisons, Sainsbury's and Tesco, together with Mars, Nestle, Procter & Gamble, and Unilever, are among the organisations backing the initiative, which could allow UK retailers and manufacturers to share product data more effectively.

A study by the companies published by GS1 UK, the standards body responsible for product barcodes and RFID tagging standards concludes that the UK's retail industry could save £1bn over five years by standardising on product data information.

Around 80% of product data across the retail supply chain is inaccurate, which costs retailers more than £140m a year to put right, it says.

Mike Coupe, trading director at Sainsbury's, says changes in regulations and consumer buying habits mean that retailers and manufacturers are having to provide more information about products than ever before. "We have been talking for decades about a common data standard, but we are now in a perfect storm," he says.

The Global Data Synchronisation (GDS) standard will allow manufacturers and retailers to share product information such as dimensions, weight and description, as well as environmental, ethical and product traceability data. GS1 expects retailers will need to record 250 data items in the future to support legislation, supply chain traceability and provide consumers with detailed product information.

The UK lags behind retailers in the US and other parts of the world, which are already using the GDS standard to improve their supply chains, says Richard Wilding, professor of supply chain risk management at Cranfield University. "The UK is behind the game. We can do much more with clean data in the retail supply chain, which could benefit retailers and consumers."

Inaccurate product data can cause problems across the supply chain. "If the size of a product is wrong, the number of units in a pallet will also be incorrect. If the weight is wrong, it could impact the load a lorry can take," says Wilding. This leads to pallets being lost or the incorrect quantity of product being sent out.

Mobile product data 

People are changing the way they buy products in supermarkets. The mobile phone camera allows shoppers to find extra information on the products they buy in-store by taking photographs of specially coded barcodes using their handsets.

The image is sent up to a web service, which reads the barcode, to give a unique product code, which is then used to reference extra information, that can help the shopper make an informed buying decision.

Mike Coupe from Sainbury's believes that the technology components are now in place to offer this sort of service. However, adoption will take many years, he says.

Lost products due to inconsistent data cost the industry £95m a year, according to the GS1 study, and £60m of potential sales revenue a year is lost due to bad data.

Consumers are demanding more information about the products they buy, says Coupe. For instance, a shopper buying food may be allergic to certain ingredients, such as nuts, or may be looking for sustainably-manufactured products, he says.

Internet shopping has given consumers greater product information, and this is affecting how people buy in retail stores. "Consumers are more informed than they were five or 10 years ago when they make buying decisions on a product," says Coupe.

Consumer goods supplier Unilever has been using the GDS standard in the US with supermarket Walmart. The company manages its product data centrally in its SAP system. Retailers can connect to the data using a service called OneSync, one of several data services supporting the GS1specification. The service alerts retailers automatically as and when Unilever's product data changes.

With retailers like Sainsbury's looking at the benefits of clean product data, Coupe says Unilever will be looking to replicate its US system in the UK.



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