Business & Finance
06:20 PM
Stephanie Stahl
Stephanie Stahl

Editor's Note: Efficiency Leads To Lower Costs

I had to check my notes several times. Did I misunderstand what he was talking about? Those thoughts kept going through my mind following a chat in Procter & Gamble CIO Steve David's office about six months ago. That's when he told me and one of my colleagues that retailer returns and refusals of products cost the company some $50 million a year.

Incorrect orders, damaged products, and other inaccuracies all contribute to its detergents, toothpastes, diapers, shampoos, and other products getting sent back. Sure, that's a drop in the bucket to a $40 billion company, but think of what you could do with $50 million. I'm not criticizing P&G--its competitors have similar issues.

In fact, speaking of $40 billion, that's about what the consumer-goods industry could save if there weren't so many inefficiencies between retailers' and manufacturers' product data. That's according to a report issued last year by A.T. Kearney (see Imagine what could be done with an extra $40 billion!

New collaboration standards and technologies aim to change all that, thanks in large part to the services of UCCnet, a standards body whose goal is to provide a central registry of product information to retailers and wholesalers. The registry includes things such as manufacturer and part number. Imagine Wal-Mart ordering diapers to stock up for a big sale but getting toothbrushes instead. Though hypothetical, the chances of such mistakes will decrease significantly as retailers such as Wal-Mart raise the bar for doing business with them--"participate in UCCnet and deploy RFID tags on your product pallets or don't do business with us" will soon become the new mandate (see stories on pp. 18 and 30)--and as product makers aggressively commit to a new level of collaboration.

Stephanie Stahl

To discuss this column with other readers, please visit Stephanie Stahl's forum on the Listening Post.

To find out more about Stephanie Stahl, please visit her page on the Listening Post.

Comment  | 
Print  | 
More Insights
Register for InformationWeek Newsletters
White Papers
Current Issue
Increasing IT Agility and Speed To Drive Business Growth
Learn about the steps you'll need to take to transform your IT operation and culture into an agile organization that supports business-driving initiatives.
Twitter Feed
InformationWeek Radio
Sponsored Live Streaming Video
Everything You've Been Told About Mobility Is Wrong
Attend this video symposium with Sean Wisdom, Global Director of Mobility Solutions, and learn about how you can harness powerful new products to mobilize your business potential.