The Big Picture on GDS
Retailers and manufacturers typically have been able to improve productivity within their own organisations. But even greater productivity improvement can be achieved through collaboration between retailers and manufacturers. However, this potential is not yet being realised. In fact, today both retailers and manufacturers are losing overall productivity in their collaboration. The reason: There is an insufficient foundation of high-quality, standardised and synchronised data between trading partners. Any sophisticated supply chain ‘lives’ on information – but when this information lacks the required quality and standardisation, collaboration initiatives will be difficult to scale in an efficient manner. Seamless collaboration is all about sharing processes and information amongst trading partners. Managing and sharing product-related data is key in this context. Global Data Synchronisation (GDS) enables this data foundation for collaborative commerce. GDS ensures that basic data such as the item and location information stored by one company matches the corresponding data in the systems of its business partners by using a network of ‘datapools’. This mechanism of data synchronisation is globally standardised (e.g., by means of a global data dictionary and global message standards). Leading Consumer Products manufacturers and retailers are currently strongly pushing GDS. The adoption of GDS, however, still needs to grow significantly. By improving the quality of data within the end-to-end global supply chain, trading partners will reduce costs, improve productivity and accelerate product speed to market
Three Golden Rules for Successful GDS
For retailers and manufacturers to reap these benefits and to scale collaboration initiatives like CPFR and RFID, it is important that the actual realisation of this ‘foundational’ GDS vision gets accelerated. For this reason, the Global Commerce Initiative (GCI) has defined ‘Three Golden Rules for Successful Global Data Synchronisation’:
1: Use the Global Infrastructure
The basic standards are available, most datapools are becoming GDSN-compliant, the Global Registry is in place. This means that the required infrastructure can be used instantly by both retailers and manufacturers. Regardless of their size (small and local as well as large and international companies), regardless of their geographic location (GDS is available globally). For many business users, this global infrastructure will mostly be a ‘black box’. As long as this infrastructure works (in other words, companies are able to share high-quality data with all trading partners) they will be happy.
2: Get Your Information Right
The GDS infrastructure only makes sense if companies are able to share high-quality product information. This is where the main challenge of GDS lies. Having good quality data means that all product master data is complete, consistent, accurate, time stamped and based on industry standards. Unfortunately, that is currently not the case. Some representative industry cases have shown that somewhere between 60% and 80% of all product records shared between manufacturers and retailers contain errors. Improving data quality is of vital importance, and is about the people, the processes and the technology that are involved in creating, communicating and using the product information. This is also the basis for a current industry initiative to improve data quality by means of a standardised Data Quality Framework (which includes data-quality KPIs, inspection procedure and a data-quality management system).
3: Engage with Your Partners
The benefits of GDS can only be achieved if there is a critical mass of trading partners that are sharing high-quality data via the GDS infrastructure. Adoption of GDS should become an integral part of business collaboration improvements. This requires active involvement of business executives at both retailers and manufacturers. As stated, currently the biggest challenge of GDS relates to ‘getting your information right’: the ability of retailers and manufacturers to ensure accurate, timely, standardised and complete product information to be available where and when it is needed. This is not as trivial as it may seem – and there is definitely no ‘quick fix’ for this. This goes to the heart of any organisation, involving three key aspects: Process, People and Technology.
What Suppliers Must Do
Suppliers have the primary ownership of core product data, and are responsible for sychronising high-quality data. Their challenge comes because the retailer’s demand for information typically exceeds what the supplier is capable of providing in a reliable manner. Product data is often located in multiple systems, which are typically not aligned, and have different standards and different levels of ownership. This is true for a supplier’s interactions across many retailers, channels and possibly geographies in order to put in a single process that will accommodate all current demands. The supplier must also be able to anticipate this aggregated demand into the near future.
What Retailers Must Do
Even though manufacturers have primary ownership and responsibility for providing high-quality product data to retailers, it still does not make sense if retailers aren’t able to manage this information properly in their own organisation, thereby protecting the integrity of this information. Retailers must deal with a number of issues because of the complexity of their product data management. This complexity is caused by the large number of products and categories from a large number of suppliers, and by the many different departments and people that are involved in validating, accepting, enriching and using this product data.
The Way Forward
This is all easier said than done. The adoption of GDS is taking a lot of time – much more time than I expected. Call me naïve…. It is not a sexy topic, and it is a complex matter. But over the last 5 years that I have been involved in this topic, I have never heard someone from the industry claiming that there wasn’t an issue here. In fact, most people in the industry are convinced this is the right and only way forward. It’s just hard work !!! Please stay tuned. In my next contribution I will focus on Data Quality – and some industry developments around this topic. Kees Jacobs is Principal Consultant in the Global Consumer Products and Retail Sector at Capgemini. He is leading the Capgemini relationship and activities with the Global Commerce Initiative – which includes a number of joint GCI / Capgemini publications on GDS and Internal Data Alignment. His main focus is on the B2B collaboration between retailers and manufacturers. In this context he works with a number of leading retailers and manufacturers around the world.