Data-collaboration efforts among retailers and suppliers have been under way for years, but few companies have pulled it off. What's the trouble?
About 150 years ago, Church & Dwight Co. had just one product: sodium bicarbonate, now known as Arm & Hammer baking soda. Today, the $1.1 billion-a-year company makes around 600 products, from at-home pregnancy tests to cat litter. That's a lot of products and a lot of product data.
So it was no small task when Church & Dwight received a letter from Wal-Mart Stores Inc. last year asking it to pick one product category, clean up all the data about those products, and then collaborate with Wal-Mart so the two companies' electronic product names, descriptions, and attributes match. The IT department had to locate the data spread across departments and systems, look for redundancies and errors, double-check item information by reweighing and remeasuring each product, manually input the changes, and then electronically publish it.
The goal of all this is to ensure that when Wal-Mart electronically orders 200 cases of a product, Church & Dwight's information systems know exactly what Wal-Mart wants. And when Church & Dwight sends an advanced shipping notice alerting Wal-Mart that the 200 cases are arriving tomorrow, the retailer's systems get the exact message the vendor intended.
Such data-synchronization efforts are common throughout the retail and packaged-goods industries these days, spearheaded by UCCnet, a nonprofit unit of the Uniform Code Council standards organization formed six years ago to establish a global online registry of product information. UCCnet members include Church & Dwight, Home Depot, Procter & Gamble, Wal-Mart, and about 3,500 other companies, of which more than 30 are retailers and 3,200 are suppliers. A year ago, there were only about 600 UCCnet members. That shot up, thanks to letters from Ace Hardware, Ahold USA, Lowe's, Target, Wal-Mart, and other weighty retailers telling their suppliers to get on board. In just the first three months of this year, 566 companies joined UCCnet. To date, more than 239,000 products are registered, and more than 1,100 members actively exchange information via UCCnet.
Manufacturers submit their product information to the registry using UCCnet standards, and retailers then download the product descriptions and share the data with their back-office systems. That way, retailers and suppliers can easily share consistent product data, a must for driving down supply-chain costs, speeding new product launches, maintaining more accurate inventory data, and reducing invoice errors.
Radio-frequency identification technology, and the fast-approaching deadlines that require suppliers to use RFID tags on goods they ship to retailers, also make better data synchronization more important. RFID's promise--the ability to exchange item-level product information in real time up and down the supply chain--depends on accurate data and consistent product descriptions.
Just having clean data is a benefit, Church & Dwight's Bonura says.
"The industry is transforming, and retailers are looking for a commitment," says Pierre Bonura, senior manager of sales systems at Church & Dwight. "The goal to synchronization is to gain data accuracy and communicate that information from machine to machine using the same language."
The energy behind data synchronization is impressive, but a worldwide registry that holds accurate product data about millions of consumer goods is a long way off. "Data synchronization is a messy job," says Bernie Hogan, senior VP and chief technology officer at UCC. Many companies still operate their different business lines autonomously, creating silos of data that are scattered throughout their organizations. Some, like $9.9 billion-a-year tool manufacturer Ingersoll-Rand Co., have grown and diversified through acquisitions, accumulating a mountain of disconnected product data along the way. And for companies that sell and buy internationally, there are product-data cataloging standards that vary from country to country.
When 3M Co., as part of its UCC effort, started looking at all the ways it stored and sent product-attribute data, it found information was transmitted by phone, E-mail, fax, CDs, EDI, PDFs, spreadsheets, Web sites, and printed price pages. 3M isn't unusual in that regard. If the company could publish all that data once to the single UCC registry, which could be accessed by many retailers, that alone would cut costs out of a manual and fragmented process, said Peggy Spofford, 3M's UCCnet/RFID project manager, at a recent Retail Systems conference. Greater savings could come from using the effort to make processes such as new-product introductions more efficient.
But it also requires changes to 3M's data-management processes, such as requiring data owners to enter data to meet UCCnet standards, making them accountable for the data's integrity, and adding data fields needed to support data synchronization. For the time being, 3M is focused on tactical compliance with retailers' deadlines--it expects to be connected to several retailers this year--before tackling more-strategic internal changes the system might allow, Spofford said.
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