Safeway Pilots Project For Better Supply-Chain Data

Supermarket chain Safeway Inc. is launching a project for synchronizing data descriptions with its suppliers, hoping that more-accurate product information will lower its supply-chain costs.

The project will be done using UCCnet and the WorldWide Retail Exchange. UCCnet, a nonprofit division of the Uniform Code Council standards organization, is developing an online registry of product information that retailers and suppliers provide using UCCnet's standards. Retailers and consumer-goods companies hope they can greatly reduce inaccurate and inconsistent product descriptions, which add billions of dollars across the supply-chain each year.

"The world's leading retailers and manufacturers are reaching consensus and recognizing that the industry is migrating quickly toward a seamless trading environment," said Safeway CIO David Ching, in a statement issued Wednesday by the WorldWide Retail Exchange. Safeway will use the exchange as a data pool, allowing manufacturers to publish their product catalogs directly to the business-to-business exchange. The exchange also will provide Safeway and its suppliers access to the UCCnet global registry.

The project will be complete by the end of the year, according to the exchange. Safeway business-technology executives couldn't be reached for comment Wednesday, but as founding members of the exchange, the supermarket chain has supported advanced data-exchange efforts and technologies. "The vision we have shared with our fellow founders since the early days of WWRE is coming to fruition," Ching said in his statement.

Other early adopters of UCCnet include Wal-Mart, Procter & Gamble, and Ahold USA, the regional office in the U.S. of food provider Ahold which runs Stop & Shop, Giant-Landover, Giant-Carlisle, Tops, Bi-Lo, Bruno's, and Peapod groceries. Those adopters have already undergone the process of cleaning their data--a necessary yet intensive task in UCCnet participation--and are forging relationships with business partners and business-to-business exchanges.

Support for UCCnet appears to be building throughout the industry, with membership reaching more than 600 companies. But most are still in the early stages of data cleansing. And some retailers and manufacturers continue to express concerns about UCCnet, particularly about whether it will primarily benefit only very large companies and whether the investment will pay off.

There's certainly an opportunity for payoff based on the high costs of returns and refusals due to supply-chain errors. Procter & Gamble CIO Steve David says retailer returns and refusals cost Procter & Gamble $50 million a year, and he expects improved communications through efforts such as UCCnet will cut those costs in half within the next few years. A study last year by A.T. Kearney estimated that supply-chain errors from incorrect product data cost the consumer packaged-goods industry $40 billion a year. The report estimated that at any given moment 30% of the information in catalogs retailers use to order products is incorrect.