CEO'S PRESS FOR GLOBAL STANDARDS

David Orgel

BOCA RATON, Fla. -- Top executives of food retail and supplier companies last week urged the industry to move forward with global electronic standards for data synchronization.

This issue took center stage here at the Food Marketing Institute's Midwinter Executive Conference as a topic once reserved for chief technology officers was given the highest importance by CEOs.

Developments last week included the following:

Retailers and suppliers endorsed a white paper calling for immediate movement on implementing global standards aimed at speeding transactions, lowering costs and boosting performance.

Consulting firm A.T. Kearney unveiled information from six case studies that showed how food distributors and manufacturers have saved millions of dollars through data synchronization.

"The lack of global standards creates costs, and we all pay," said Pierre-Olivier Beckers, president and chief executive officer of Delhaize Group, Brussells, Belgium, in an address to the FMI Conference. "Systems need to be open and to talk to each other." (For more news on data synchronization and standards, see Page 45.)

The white paper was endorsed here in a joint board meeting of FMI and Grocery Manufacturers of America. That meeting was closed to the press. According to FMI, the white paper focuses on development of electronic collaboration to enable manufacturers and retailers to share information and jointly plan sales forecasts, promotions and product development. The paper points to building blocks that include standardized data formats and information exchange processes to enable trading partner communication; a single global registry and continuous data synchronization; and consolidation of trading exchanges to eliminate duplication.

The white paper also stresses that new technologies, including radio frequency identification (RFID), will be critical to improving the industry's supply chain.

Also at the joint board meeting, A.T. Kearney described its case studies on data synchronization that included participants Ahold USA, Kraft Foods, Procter & Gamble, Nestle Purina, Shaw's Supermarkets, East Bridgewater, Mass., and Wegmans Food Markets, Rochester, N.Y., according to FMI. The results showed that trading partners significantly lowered costs and improved supply chain operations through synchronization.

Distributors overall reported, for instance, a 4% drop in out-of-stocks and a 1% reduction in warehouse and DSD handling costs. Manufacturers realized up to a 4% drop in out-of-stocks and a nearly two weeks' time savings in speed-to-market for new items.