Food and grocery manufacturers are being urged to play close attention to product data after a new report revealed that the cost of inconsistent data will exceed $1 billion during the next five years.
The Australian Good and Grocery Council recently released the GS1 Australian Data Crunch Report in conjunction with technology firm IBM and Efficient Consumer Response Australasia.
GS1 Australia, a non-profit supply chain standards group, is the only organisation authorised by GS1 Global to administer GS1 barcode numbers in Australia.
ECRA is a forum for Australian and New Zealand suppliers, wholesalers and retailers associated with the council in both countries.
The study collated information on groceries held by Coles, Woolworths and Metcash, comparing the data with the same items from four suppliers.
According to the report retailers work with inconsistent data more than 80% of the time and during the next five years that could cost more than $350 million in profit erosion and $675 million in lost sales from stock-outs – a total of more than $1 billion by 2016.
Of 3271 products only 782 consumer units (individual packets and cans) and 788 trade units (cartons and pallet loads) matched to the three participating retailers.
Knowing a discrepancy of just one millimeter could register as an error GS1Australia allowed for a tolerance of 10%.
“Even with that tolerance the percentage of matches was surprisingly low,” the report said.
“The depth and width parameters indicated a poor correlation between retailers and suppliers.
“The average match of around one-third of items raises questions as to the accuracy of shelf-space planning mechanisms.”
According to the report a couple of millimeters out per layer can cause a pallet load to topple over onto the forklift driver.
According to Maria Palazzolo, chief executive of GS1 Australia, many businesses are not giving quality data the attention it deserves, particularly because it can have such a huge impact on the bottom line.
AFGC chief executive Kate Carnell says the report is an important first step in understanding the problems and implications of using bad data in the supply chain.
“Good quality data is the cornerstone of e-commerce and will become more important over time with the introduction of tools such as Recallnet and Go Scan Extended Labelling,” Carnell says.
“Industry needs to think very carefully about how we can deliver improvements in the quality of data that means everyone in the value chain trusts the data available.”
The report showed that retailers and suppliers using data synchronisation through GS1net show significantly better data quality results than those who do not fully adopt data synchronisation.