Investing in accurate global data synchronization (GDS) brings potential benefits, such as improved supply chain efficiency, cost savings and increased revenue to consumer packaged goods and retail companies, according to a report by Accenture, the Food Marketing Institute (FMI), the Grocery Manufacturers Association (GMA), Wegmans Food Markets and 1SYNC.
The report is based on a study of Wegmans Food Markets, a chain of 71 supermarkets in New York, Pennsylvania, New Jersey, Virginia and Maryland, and seven suppliers: Coca-Cola, General Mills, The Hershey Co., The J.M. Smucker Co., Nestle, PepsiCo and Procter & Gamble.
It involved interviews with more than 120 personnel in sales, customer service, logistics and accounting at Wegmans and the seven suppliers. Interviews were conducted this past March and April.
One of the more surprising finds in the study is the impact that data synchronization has on transportation costs. Accurate synchronized data will allow Wegmans to minimize pallet cube variance and eliminate approximately 10 percent of its outbound shipments—generating more than $1 million in savings. In addition, accurate and synchronized item information will enable Wegmans’ inbound logistics team to use technology to optimize inbound truckloads. This will provide the retailer and its partners an estimated annual saving of $2.5 million, which is 5 percent of all inbound transportation costs.
The study confirms the power of GDS, the harmonization of manufacturers’ and retailers’ product information, by quantifying the actual benefits gained by companies—up to 64 percent improvements in supply chain and operational areas and 67 percent in customer relationship and growth areas.
“The main messages from this study are compelling,” says Marianne Timmons, vice president of supply chain and global business to business, Wegmans Food Markets. “We have realized many quantifiable benefits from accurate data synchronization. Further, it is foundational to next-generation business processes for Wegmans and our trading partners.”
“GDS affects all parts of the supply chain. Our study shows that benefits are available to everyone from the sales account manager to the backroom receiving clerk,” says Pamela Stegeman, GMA’s vice president of supply chain and technology. “When accurate data is synchronized between trading partners and used by all parts of both organizations, we can better meet consumers’ needs.”
While the number of consumer goods and retail companies using GDS has increased in the last three years from 100 to nearly 10,000, there is potential for more growth in the industry. As current GDS initiatives gain more traction and additional companies enlist the appropriate technology, the benefits associated with GDS are expected to increase.
“Among the important findings of this research is that high-performing companies need to make accurate data synchronization a business priority, not just an IT priority,” says Marco Ziegler, senior executive at Accenture’s Consumer Goods & Services practice. “Global data synchronization can be an effective catalyst for transforming business processes and delivering significantly improved results throughout the supply chain.”
“We are confident that the competitive advantage achieved by leading companies through synchronizing accurate data will encourage and inspire other companies that have been waiting for the right time to get started. As companies expand item data synchronization to all product lines and geographies, the pace of change in the industry will accelerate and enable widespread synchronizing of accurate price data to achieve even greater returns,” adds Steve Vazzano, senior director of market development at 1SYNC. For a copy of the report, go to: 1sync.org.