TURNING POINT SEEN FOR USE OF DATA SYNC 2004-06-21 (1)

DAVID ORGEL

WHITE SULPHUR SPRINGS, W.Va. -- Trading partners need to begin a more active phase of data synchronization now that a large number of companies have made initial investments in the process, according to a group of retailers, suppliers and consultants at a workshop here.

Executives delivered calls to action for data synchronization implementation during the session at Grocery Manufacturers of America's Executive Conference. Data synchronization is a standards-based electronic process of ensuring compatibility between retailers' and manufacturers' item data.

"Data synchronization has to be the foundation because without it, we can't continue to move forward on supply chain efficiencies," said Michael Heschel, executive vice president and chief information officer, Kroger, Cincinnati, who was a panelist at the workshop. "If the information isn't right, how can we act on it? For instance, pay-for-scan is a priority for us, but it depends on data synchronization."

Bill Grize, president and CEO of Ahold USA, Chantilly, Va., expressing his views as a member of the workshop audience during a question-and-answer session, said data synchronization is part of "a long-term issue of survival" that involves "favorable adaptation or extinction.

There's a profound need for leadership to make a difference."

Similar calls for action on data synchronization were made at General Merchandise Distributors Council's recent GM Marketing Conference (see story, Page 25).

The process of data sync is at a turning point because many trading partners have already taken the first steps, said Daniel Staresinic, senior manager, Consumer Businesses, Deloitte Consulting, Cincinnati, who opened the session with an assessment of industry progress. He said that over the past year, the number of companies subscribing to UCCNet has increased from 600 to 3,600.

He showed a chart with a fast-rising line that graphically displayed the increase in participation. However, he also showed a chart that showed the growth in number of companies with one or more items synchronized. That line was fairly flat because of the lack of active synchronization under way.

''Next year, we'd like to see the two lines closer together," he said. "The focus should be on increasing implementation, not participation."

Deloitte was retained by a task force of members of GMA and Food Marketing Institute, Washington, to help accelerate the beneficial implementation of global data synchronization by assisting in elimination of barriers.

Deloitte is conducting industry interviews and plans to provide tools for development and implementation, including a roadmap for companies based on knowledge gained from pilots, Staresinic said. Another Deloitte executive, James Haines, national practice director, Consumer Businesses, served as moderator for the GMA workshop.

Data synchronization is also at a crossroads as industry efforts move forward to launch a Global Data Synchronization Network (GDSN) at the end of July (SN, June 7, 2004, Page 95).

Heschel outlined the gradual increase in benefits he expects data synchronization to provide. "You'll get some savings when you start the data synchronization process, such as clerical savings from having accurate data," he said. "A lot of these kinds of small things can add up. But the real game is the vision down the road when we have the whole supply chain involved."

Along the way, there may be changes in how data synchronization and its various components, such as data pools, are structured, he said.

"I view the data pool and registry at some point in the future as being an industry-type capability," he said. "It seems to me we don't have to have five or six or eight data pools in our industry. Down the road a piece, I think that capability can come together and we'll rationalize it."

Panelist Andy Platt, vice president, information services, and CIO, J.M. Smucker, Orrville, Ohio, said his company started on the data synchronization road two years ago. "Our team was led from the top and was cross functional," he said. "We made sure our data was compliant with industry standards. This was a strategic priority."

Ann Dozier, vice president, business development, Coca-Cola Customer Business Solutions, warned trading partners that "the business must take the leadership role and technology should be the enabler in the background."

"A tremendous amount of business process re-engineering needs to happen within your own business and with your customer," Dozier added.

Executives said an early step in data synchronization involves bringing data into accord with standards.

"We found that just getting our data cleaned up and synchronized added value internally," Platt said. "We got correct weights and improved order accuracy, so the benefits were there."

Organizations must also be vigilant about the ongoing quality of data because even once data is cleaned, there it can become "dirty" again, panelists said.

"We built internal processes to support keeping the information clean," Dozier said. Heschel described his company's data integrity group, noting that "each Kroger division has a data integrity coordinator to make sure the data stays clean."

Trading partners were urged to view data sync's long-term payoff when deciding how quickly or deeply to implement the process. "It's not just about RFID or pay-for-scan or some other benefit. It's about developing the most efficient supply chain that will provide the consumer the best service at the best cost," Heschel said.

"The standards and technology are ready," Platt said. "This is a long-term effort to take costs out of the supply chain and improve speed-to-market."

Dozier added, "It's time to get started now. There may be some bumps, but it's worth taking some chances."