In Sync

Campbell, which also owns the Pepperidge Farm and Godiva brands, got involved in UCCnet after a mandate from CEO Doug Conant in January 2001 to improve product quality and customer relationships, Engle says. It tapped a small vendor called Velosel Corp. to build its product catalog and handle connectivity with UCCnet and the WorldWide Retail Exchange. IBM built the infrastructure, but to reduce external costs of the project, Campbell moved the deployment of the system and development of the new business process over to its internal staff after six weeks.

The company is live with seven retailers on product-item synchronization and is doing product-price synchronization with two of them. While item synchronization can help the company do a better job of communicating on the height, width, and weight of its products for shipping purposes, price synchronization can go far in eliminating charge-backs, Engle says.

Besides data cleansing, there have been other obstacles. At times, it's been unclear whether UCCnet and the online exchanges work together or against each other, and at one point Transora and the WorldWide Retail Exchange talked about merging, which created confusion in the consumer-goods community. The merger didn't happen, "but it didn't do anyone any good to wait for five months to see if it would," Engle says.

What's more, for very large companies such as Procter & Gamble, data synchronization can't happen on a grand scale without buy-in from the international community. P&G has just 16,000 of its products cataloged with UCCnet, because most of the rest of about 40,000 products are sold only outside the United States. Many countries have their own product-data cataloging standards, so the Uniform Code Council and European standards body EAN International will publish the EAN*UCC data standards in July in an attempt to bring all countries into a global data-standardization effort. Strides are being made in many countries--including Belgium, France, Italy, Japan, Korea, the Netherlands, and Sweden--to adopt the standards and create interoperability among country catalogs. But companies will have to add new identifiers to their product descriptions. "It's very complex," Engle says.

Companies must also ensure they've done the necessary business-process reengineering to see the benefits of data synchronization. Consulting firm A.T. Kearney recently completed a pro bono study requested by the Grocery Manufacturers Association of six early adopters of UCCnet: Ahold USA, Kraft Foods, Nestlé Purina, P&G, Shaw's Supermarkets, and Wegmen's Food Markets. The key finding: Companies can expect to achieve $1 million in benefits for every $1 billion in sales through data synchronization.

Getting to that number required looking at all the areas that benefit, including merchandising, data entry, supply chain, inventory, and even store checkout lines, A.T. Kearney consultant Simon Bell says. And companies can't expect to see benefits unless they've adapted the entire business. "Many companies are worried about the cost of the technology," he says. "Our analysis of the fees and technology is that it's a tiny portion. The real cost is change management and the time it takes to adjust."

But buy-in from big retailers is moving the process along. "We were live with our solution at the end of March, nine months in advance of Wal-Mart's mandate to the industry," says George Spanos, director of applications at Hershey Foods Corp. "Wal-Mart is our No. 1 customer and probably the No. 1 customer of most suppliers out there."

Hershey has published about 500 of its 1,800 products with UCCnet and has formed data-sync links with Wal-Mart and Wegmen's. It has its sights set on another 15 customers who've signed up for UCCnet. "We looked at data synchronization as a foundation for almost anything electronically we want to do with our customers," Spanos says.

The crucial steps that manufacturers and retailers have made toward sharing common data in the past year are providing a strong foundation for E-commerce in the future. Challenges remain, but most companies are willing to bet their efforts will change the industry forever.

Illustration by Craig LaRotonda
Photo of David by Sacha Lecca