Retailers and their suppliers are facing up to an uncomfortable truth: their ability to track products throughout the sales cycle is in desperate need of an overhaul. The main problem is that most products have a large amount of information attached to them - what some in the industry refer to as "fat data".
Product information can include up to 150 attributes, some of it changing over time - most notably, pricing. With around 20,000 products being launched globally each year, the task of cataloguing, tracking and sharing that information is complex.
The industry's solution - five years in planning - is to bring all this data together in regional pooled databases under what it calls Global Data Synchronisation (GDS), all linked to a global registry, the prototype of which will be launched this summer. But such synchronisation requires product information to be submitted in an agreed specified format - something that requires considerable planning and coordination.
The rewards are potentially huge. Researchers from Capgemini say that global standards are likely to generate savings of 1%-3% for retailers and manufacturers, which will contribute to increased profits of 10% to 15%. Long term, it predicts it will improve product availability, product assortment and customer service. Food safety could also be enhanced through better product tracking.
But according to some, GDS could be derailed because many manufacturers have not organised their in-house product information so it is available and consistent. Typically, stock details reside on a mix of legacy systems that don't talk to each other.
"Most organisations in the supply chain have yet to get the consistency necessary in their own data to make GDS practical and beneficial. Until each organisation puts its house in order, GDS will remain a distant dream," says Steward Holness, chief executive of Reqio, a product information management company.
Holness believes that manufacturers in particular need to invest in Product Information Management (PIM) systems that track products internally through manufacture, storage and shipping. He maintains that large Enterprise Resource Planning (ERP) solutions from leading software vendors are part of the problem. "They don't talk to each other very well, and it's not going to happen any day soon." A PIM system manages data flow through a firm's IT systems and stores validated information in a repository.
Capgemini confirms the view that firms are far from ready. A recent study found that more than half of the items in company systems contained incorrect data such as wrong values and duplicate or obsolete entries. It says the reason is that most product data is still handled manually and thus prone to error.
Microsoft's European retail technology manager Sandana Kitchenane says GDS is a major industry topic. "PIM is key but it's also about the less sexy aspects like interoperability - how databases are shared. It's not rocket science but it needs standards to make it transparent to retailers."
Kitchenane believes the recent push towards electronic tagging and new laws on traceability, which require sellers to be able to specify the source of a product, are helping to focus the need to deliver more effective data management.
The key to GDS lies in the creation of the Global Register, a kind of telephone directory of retailing being created by UCCnet. This is the software arm of the Uniform Code Council (UCC), the global body that administers the bar code system. It aims to provide a database of all products but with a simplified five-attribute product description.
Any search on the database will link to in-depth information on the localised databases, known as datapools, around the world. About a dozen exist. However, due to the lack of a certification programme, none has been ratified to work with the registry, and most have developed proprietary structures for organising their data.
The driving forces behind standards are the Global Commerce Initiative, a body made up of retailers and manufacturers, and the retail standards bodies EAN International and the UCC, which publish recommendations for GDS standards.
Dr Wolf Wagner, a principal at consultancy Kurt Salmon Associates, which works closely with many leading retailers, says the problem is political and technical. "There will definitely be global standards for sharing data, it's just a question of when. Historically, retailers are not centralised, so it makes it difficult to implement standard process and technology templates in different regions. In addition, it's about the relationship between suppliers and retailers - who pays what and who benefits?"
In the UK, E.centre helps promote the activities of UCCnet. Harshall Gore, project manager for GDS at E.centre, says the biggest difficulty is getting agreement on pricing data. "Price is always a showstopper in standards meetings. There is natural unease about disclosing such information, but we get round that by allowing some data to be mandatory. The Global Registry will be launched in July, so it's a matter of it being able to prove its value."
According to the leading data integration firm Sterling Commerce, the drive towards GDS will give rise to both national and niche datapools. A niche service could be a database serving wine growers in France, while a national service could be the in-house system of one of the world's largest retailers. This will allow large retailers such as Wal-Mart to maintain direct links with leading partners, while allowing niche communities to maintain databases with product attributes unique to them.
