Published on 11-Jun-2010
Validated on 04 Sep 2012
" We could not have undertaken a project of this scale and complexity in such a short time without the automated IBM Information Server analytical tools, retail industry experience and technical expertise of IBM. In addition, IBM retail consultants provided valuable industry insights to help us extrapolate the impact of inconsistent data, and assess how future legislative, consumer and operational pressures will exacerbate the situation. " - Gary Lynch, Chief Executive Officer at GS1 UK
Smarter Solutions for Retail
GS1 UK has worked towards developing innovation in the supply chain for over 30 years, most notably through the development of the global barcode system used to scan over 5 billion products every day. The not-for-profit organisation works on behalf of over 1 million retail industry member organisations worldwide, and has over 21,000 member organisations in the UK.
GS1 wanted to investigate reputed instances of inconsistent data at multiple points in the supply chain in the UK grocery industry.
Over a million records from four leading UK retailers were quickly profiled, matched and flexibly analysed using IBM InfoSphere™. Automated profiling and matching of large hetereogenous product files pinpointed over 80% incidences of inconsistent data impacting grocery industry efficiency and lost sales. IBM retail consultants partnered with GS1 to interpret results, assess financial and operational impacts, and present an industry improvement roadmap.
For the first time, the UK grocery industry could correlate large data volumes used at multiple points in the supply chain and prove significant incidences of inconsistent data. GS1 engaged with the UK grocery industry to introduce global data synchronisation, providing significant opportunities for efficiency savings and increased sales. Evidence gained will enable retailers and suppliers to connect and collaborate better for improved profitability and customer service.
GS1 UK has worked towards developing innovation in the supply chain for over 30 years, most notably through the development of the global bar code system used to scan over 5 billion products every day. The not-for-profit organization works on behalf of over 1 million retail industry member organizations worldwide, and has over 21,000 member organizations in the UK.
Working with member retailers and suppliers, GS1 UK became aware of anecdotal evidence that suggested high incidences of poor quality product data in the UK grocery industry supply chain. To assess the validity and scale of the ‘inconsistent data’ problem, GS1 UK engaged on a six-month project to compare grocery product data held by four of the nation’s largest supermarket retailers, and match this with product files held by four leading manufacturers. IBM provided advanced data analytics solutions to help process the huge volumes of data and retail industry expertise to assist in interpreting the impact of inconsistent data on retailers, suppliers and consumers.
The resulting Data Crunch Report revealed over 80% of inaccurate product data in the supply chain which contributes towards profit damage and adversely impacts upon consumer satisfaction. When the impact on customers, retailers and suppliers was assessed, it became apparent that the UK grocery industry and its customers could benefit from potential savings in excess of £1 billion over the next five years by developing smarter supply chain processes. Over-stocking, lost sales from shelf stock-outs, product ‘shrinkage’ and manual workarounds are some of the costly impacts being experienced by retailers and suppliers as a result of missing or inaccurate product data.
This was the first time an investigation of this scope and depth had been undertaken in the UK grocery industry. “We could not have undertaken a project of this scale and complexity in such a short time without the automated IBM Information Server analytical tools, retail industry experience and technical expertise of IBM,” says Gary Lynch, Chief Executive Officer at GS1 UK. “In addition, IBM retail consult-ants provided valuable industry insights to help us extrapolate the impact of inconsistent data and assess how future legislative, consumer and operational pressures will exacerbate the situation. They engaged proactively in the presentation of the study conclusions, adding substance and professionalism to the formal report and the workshops with participating retailers and manufacturers.”
GS1 UK undertook a thorough evaluation of solution providers before selecting IBM to support the Data Crunch project. It checked out the leading suppliers of analytics solutions with an independent industry watcher and assessed the retail industry expertise of potential partners. Malcolm Bowden, GS1 UK Business Development Director, explains: “IBM was a clear leader in both areas. It has an excellent track record working with major global retailers, a dedicated team of retail industry consultants and a suite of leading data analytical tools. We have formed a close partnership during this project and have been very impressed with the retail knowledge and commitment of IBM’s consultants.”
The first stage demonstrated the enormity of the data challenge. Product files at GTIN (Global Trade Item Number) level were sourced from four of the UK’s leading supermarket chains. These contained some 24 attributes – including physical dimensions, weights and unit capacities – for each product, case and pallet.
Each retailer had created its own systems for storing product data. The large and disparate files containing over a million records were extracted, transformed and loaded automatically using the IBM InfoSphere DataStage® ETL tool. Once imported, a sophisticated data-profiling tool, IBM InfoSphere Information Analyzer, was used to evaluate the structure, content and quality of the data sources.
IBM specialists worked alongside GS1 UK staff providing guidance and knowledge transfer in the use of these automated tools. In a short period of time, GS1 UK became self-sufficient in running the data analyses and looked to IBM for only light touch technical support.
Initial results revealed more than 60% duplicate GTIN entries were being created by manual workarounds in stores, warehouses and other islands of information in the supply chain to address local needs. The IBM software used in the study had been designed to quickly identify and isolate these duplicate entries.
The resultant data files from the four retailers were transformed automatically into a consistent format and validated. Information Analyzer’s rules-based engine was used to eliminate ‘dummy’ entries (e.g. fictitious 1x1x1 size dimensions entered to satisfy system requirements at data entry stage), and normalize data held in alternative dimension scaling (e.g. case weights in grams and kilograms were normalized to allow direct comparison).
“Once IBM had helped us achieve consistent data, we worked together to set up and complete the initial models within just 10 days. The data volumes were huge, complex and from incompatible sources. It would have been inconceivable to have undertaken such detailed cleansing, profiling and normalizing of data without the IBM InfoSphere tools,” explains Harshal Gore, Professional Services Manager at GS1 UK.
The speed and power of Information Analyzer helped GS1 UK to run a series of complex assessments, contrasting similar data from any two, three or four retailers. Master product files from four leading consumer products companies were also fed into the analysis and compared, individually and severally, with product data held by the grocery retailers.
In addition to discrepancies between the retailers’ data, the analysis revealed less than 25% of product data matched with the suppliers’ master data files.
Cost impact on retailers and suppliers
To help interpret the impact on customers, retailers and suppliers of this high incidence of inconsistent data in the grocery supply chain, GS1 UK called on retail industry consultants from IBM. IBM consultants partnered with GS1 UK to review the findings with the participating retailers and suppliers. They also supported GS1 UK with the production of the Data Crunch report and actively engaged in the presentation of findings to management of each of the grocery industry participants.
“IBM added experience working with retail and supplier customers worldwide to our own knowledge from GS1 UK members, and together we pulled in research from a number of previous studies and independent industry bodies,” says Malcolm Bowden. “The breadth of knowledge of IBM retail consultants, and their objective interpretation of the study results, helped us develop an incisive report detailing the high cost impact areas of inconsistent data for our member retailers and suppliers.”
A significant proportion of ‘shrinkage’, usually associated with theft or loss of product once it has been received into inventory, was considered to relate to failures in supply chain processes. The GS1 UK research project calculated that retailers and suppliers are experiencing shrinkage of up to £95 million per annum which could be attributed to inaccurate product data.
With a distrust of central data, staff in buying, stores, warehouses, logistics and finance have created and maintain their own local repositories of product data. Inaccurate data on product units, cases and pallets was revealed as a significant reason for the mismatching of invoices. The cost of creating this multiplicity of duplicate product data, investigating discrepancies and handling workarounds was calculated to be £45 million per annum.
Data integrity issues can also contribute towards errors in re-supply by manufacturers, poor product display, inefficient product storage, shelf stock-outs, incorrect shelf-edge labelling and checkout delays. In addition to the cost of rectification, poor data could also result in product unavailability, poor service to the consumer and customer dissatisfaction. The Data Crunch report calculated that poor data quality is responsible for £60 million per annum in lost sales.
Future escalation of product data
Drawing on extensive industry expertise, IBM retail consultants worked with GS1 UK to evaluate the potential impact of emerging legislation, evolving consumer demands and commercial developments on the likely future demand for product data.
There is a rising demand for information on nutrition, allergies, carbon footprint, packaging, and global and local supply chains. The report identified that this escalation in demand for product information is likely to increase the volume of product data retailers need to hold by at least 400% – a further clear imperative for creating smarter and more efficient procedures for generating, disseminating and managing product data.
Following the study, GS1 UK is working with the UK retail industry to standardize on Global Data Synchronization to allow product data to be entered once and maintained centrally by the supplier, and accessed directly by all parties in the supply chain.
“IBM consultants added substance and professionalism to the workshops that presented the study findings to the major retailers and suppliers,” concludes Lynch. “In every case, the retailers and suppliers were impressed with the depth and scale of the analysis and very interested in the impact assessment on their businesses. IBM contributed significantly to the success of the project and its ‘partnership’ approach in the way it worked with us was fundamental to this success."
Products and services used
IBM, the IBM logo, ibm.com, Smarter Planet and the planet icon, InfoSphere and DataStage are trademarks or registered trademarks of International Business Machines Corporation in the United States, other countries, or both. If these and other IBM trademarked terms are marked on their first occurrence in this information with a trademark symbol (® or ™), these symbols indicate U.S. registered or common law trademarks owned by IBM at the time this information was published. Such trademarks may also be registered or common law trademarks in other countries. A current list of IBM trademarks is available on the Web at “Copyright and trademark information” at ibm.com/legal/copytrade.shtml.Other company, product and service names may be trademarks, or service marks of others.References in this publication to IBM products, programs or services do not imply that IBM intends to make these available in all countries in which IBM operates. Any reference to an IBM product, program or service is not intended to imply that only IBM products, programs or services may be used. Any functionally equivalent product, program or service may be used instead.This case study illustrates how one IBM customer uses IBM and/or Business Partner technologies/services. Many factors have contributed to the results and benefits described. IBM does not guarantee comparable results. All information contained herein was provided by the featured customer and/or Business Partner. IBM does not attest to its accuracy.IBM does not provide legal, accounting or audit advice or represent or warrant that its products or services ensure compliance with laws. Clients are responsible for compliance with applicable securities laws and regulations, including national laws and regulations.This publication is for general guidance only. Information is subject to change without notice. Please contact your local IBM sales office or reseller for latest information on IBM products and services.© Copyright IBM Corporation 2010. All Rights Reserved.