Global Data Synchronisation for Supply Chain - Case Study Example

Global Data Synchronisation for Supply Chain Introduction The process of transferring product or information data from a supplier to either retailer or distributor has often been strenuous and error prone. This is because of the process involved in moving product data to the retailer systems. Further, since the traditional mode of transferring data is slow, there is a possibility of the transferred information being outdated because of the slow process involved. This calls for a frequent update of information. As such, an alternative to deal with the slow process of data transfer is the adoption of the Global Data Synchronisation. This technology is significant in hastening a speedy transfer of information from the manufacturer to the retailer. In addition, this technology is important in terms of improving accuracy and security of data (Gopal & McMillan 2005, p.58). This technology is enhanced by the existence of a global network termed as the Global Data Synchronisation Network which is under the management of GS1. This organisation (GS1) is responsible globally in matters dealing with the design and implementing the global standards and solutions necessary to enhance the efficiency and also visibility with regard to supply and demand chains existing across verticals. On another note, this technology is necessary in the sense that, it enables trading partners to have access to product information in real time. In addition, this technology is necessary in a globalized market where obtaining latest information is critical for businesses. For instance, any change made in a firm’s database automatically reflects on other business partner’s database. This is made possible through the GS1 system that relies on the Global Trade Identification Number (Gopal & McMillan 2005, p.62). 2. Current status and implementing of Global Data Synchronisation 2.1 The industries engaging in retail and consumer products recognizes the urgency to change and adopt a technology that would ensure system-system synchronisation with regard to products, price, the location, services and sharing of other information between business partners. In order to achieve this milestone of data synchronisation that involves many systems, standards, businesses data management and electronic synchronisation have emerged as solutions to problems related to data sharing among business partners. Further, this technology is seen as a means to enhance efficiency and hastening responsiveness within the supply chain. With regard to this technology, trading partners can share two forms of data. The first is neutral data that can be shared among many parties and is considered to be relationship-independent. Further, the neural data can be divided into three groups that include the core product data, category specific data and the target market data (Deek, Tommarello & McHugh 2003, p.357). The core product data entails the features that apply to all products for instance, the brand name or description. On the other hand, category specific data involves the features that apply to a particular product such as the colour. The target market data involves data characteristics of a particular product found in the market for instance, the packaging indicators used by a country. The second form of data known as relationship dependent data denotes the characteristics of the terms bilaterally agreed upon by the trading partners such as the marketing conditions or logistics agreements (Deek, Tommarello & McHugh 2003, p.361). 2.2 At present, various business entities such as the manufacturers, retailers and distributors are now considering the need to update the management of their internal data. This is meant to improve consistency with regard to the internal and external data, and also process integration. For example, most firms are adopting enterprise data management and this advancement is important in making continuous electronic data synchronisation a reality. With a globalised data synchronisation, businesses will be able to gain more benefits related to trading partner collaboration. On another note, since the 1990s, data synchronisation has undergone much improvement and at present, business entities such as retailers, distributors and manufacturers are responding positively with regard to embracing GDS (Deek, Tommarello & McHugh 2003, p. 368). For instance, by 2004, averagely 83% of companies engaged in the packaging of consumer goods had already embraced the GDS. On the other hand, approximately 67% during the same period were contemplating the idea of synchronizing their item data. However, it is noticeable that most firms still need to put more effort in terms of working towards GDS. Conversely, a number of retailers are engaging in advancing the GDS vision in terms of issuing mandates. For instance, Albertsons set January 2004 as the deadline for its suppliers to provide product information using electronic means. Initiatives such as this set by firms’ plays a role in improving standards and expanding GDS respectively (Poirier 2004, p.15). 2.3 In the present global business, business partners are embattling high costs because of problems with master data. This includes information inefficiencies with regard to the supply chain and inaccuracy of data when undertaking transactions. The invoices have errors and this leads to the high costs suffered by businesses. Further, globalisation of business ventures has led to the need for a fast and smooth inter-firm flow of products and an efficient management of supply chain processes. This efficiency can be enhanced by embracing a synchronised communication between trading partners. Businesses today are engaging in a continuous synchronisation of the master data of their systems with the system of their trading partner. This has allowed companies to trade globally and also improve data accuracy between one company and the trading partners (Jilovec 2004, p.54). In addition, synchronisation has enabled firms to eliminate costs that impact negatively on their supply chain. On the other hand, a key benefit of embracing the GDSN today is that business partners have access to a single point of entry to the GDSN through an approved data pool they prefer. As a result, businesses can now avoid the need to subscribe to many data pools within the same locality or across different geographical locations. Today, business partners have the opportunity of accessing the GS1 Global Registry through an approved data pool. However, an important factor to note is that business partners can act as their own certified or approved data pools. With regard to GDSN, Catalogue items can be pinpointed by relying on the GTINs and GLNs of the supplier and the target market. Conversely, locations can be identified by relying on GLN (Johnson & Whang 2002, p.413). 2.4 Global data synchronisation involves standards, systems and a platform that are agreeable to every participant. As such, each participant and their branches, locations or warehouses need to be uniquely identified. In addition, every item and including the transaction also require a unique identification. In this regard, standard-building efforts are currently noticeable and they include GDS, GCI and GS1 who are responsible for defining process and standards needed for information cleansing and synchronisation. This includes protocols and standards necessary for synchronisation messaging. On the other hand, the EAN/UCC has established the GSMP that is responsible for defining item standards as a single set that is used across the industry. Further, the GSMP also defines the GTIN that is responsible for identifying unique products and GLN (Global Location Number) that is responsible for identifying the unique location of companies. On another note, the EAN/UCC and GCI have engaged in an effort to implement the Global Product Classification Schema for purpose of having consistency in classifying products between manufacturers and retailers (Johnson & Whang 2002, p.421). Global Data Dictionary on its part carries the function of specifying the attributes that an item need to have and identifying the features of a party. The GTIN on its part is composed of several significant properties. Despite the company prefix code being given by GS1, each company is required to be responsible for choosing EAN/UCC-14, UCC-12, EAN/UCC-8 or EAN/UCC-13. In addition, each company is required to make adjustments on its own database and files so as to accommodate an item numbering scheme that consist of 14-digits. It is also the company’s mandate to make decision regarding the use of various item numbers that contain similar package indicator. Currently, the Company Prefix is not issued containing a 6-digit number since its length varies. As a result, most business applications may be forced to be modified or adjusted so as to accommodate this practice. Conversely, GTIN is also used in combination with RSS (Reduced Space Symbology. This is a new method that involves tagging small items. For instance, RSS can find its use in pharmacy or medical products. On one hand, Sunrise Compliant entails having the ability required to scan UCC-12, EAN/UCC-13 and EAN/UCC-8. On the other hand, GTIN Compliant entails possessing the ability suitable for scanning the above four numeric schemes. This also involves the ability of scanning EAN/UCC-14 at POS. Standards related to EDI (Emerging Electronic Data Interchange) are considered capable of differentiating and also identifying the structure of the 14-digit GTIN (Extol 2004, p.45). 2.5 Other than the GTIN, the GLN is also considered an important part of collaborative supply chain management and GDS. Similar to GTIN, GLN provide another way of pinpointing the location of a functional, physical and logical or legal entity with regard to a supply chain. In this sense legal entities can be the entire company that include its divisions for instance; customers, manufactures, distributors and retailers. The functional entities can be a department found in a legal entity, and tasked with a particular function. Example in this sense includes the production department. On the part of the physical entities, this includes the structures existing within a premise such as the delivery point or a warehouse. The structure of GLN further consists of EAN/UCC company prefix, check digit and the location reference. The EAN/UCC on its part performs the task of proving the company prefix; however, each company needs to take responsibility in terms of providing the location reference number. In essence, the main purpose of GLN is to act as a reference key used to retrieve an entity’s information from the database. Examples in this sense include contact person, contact phone and postal address (Welty & Becerra-Fernandez 2001, p.67). 2.6 The GDSN has two components that include the global registry and data pools. On the same note, the GDSN has been developed under the auspices of GCI (Global Commerce Initiative). As such, these two components conform to the technical specifications listed by the GS1. There are two primary components in GDSN: data pools and the global registry. With regard to the data pool, trading partners are able to access and exchange information related to items and parties through the use of an electronic means. In particular, a data pool denotes an electronic catalog consisting of item that is standardized and also price data. Additional function of a data pool involves operating as a transport channel for standardized data between business partners. The maintenance of a data pool can be external by a third party or internally as a CPIM (Collaborative Product Information). Examples of a third party maintained data pools include Gecord (France) and SINFOS (Germany). Global Registry on its part denotes a directory that is used for registering items and parties. The Global Registry should be noted to contain data approved to be GCI complaint. In addition, the registry is important in the sense that, it allows single item registry and as such, suppliers can register their trading items using standardized classifications while, retailers can rely on the registry to search and access important item information (Wigand, Markus & Steinfield 2005, p.285). The global registry as detailed by GCI involves the connection of a single logical data pool that consists of the GCI and GDS Network, for purposes of making the master data accessible to users, and in transparent and a standardized manner. However, the global registry is only accessible by relying on a GCI certified data pool. The data that move between the data pools and the registry depends on the GCI certified XML messages. Other than these two components of GDSN, there are also other components involved in the integration and synchronisation work which are also necessary in implementing GDSN. The first component is Publication and synchronisation engine that exist at the supplier’s data pool, is responsible for publishing the data used by the retailer’s data pool. This process conforms to the rules of the EAN/UCC and the engine is responsible for verifying the accurate exchange involving updates related to the item and party records between business partners. The engine further ensures that there is accuracy of syntax in regard to the elements of GCI with the Global Data Dictionary. In essence, the engine performs the function of enhancing external synchronisation. The second component is the CPIM (Collaborative Product Information Manager). Prior to submitting the item data onto a data pool, then the publisher is supposed to provide internal synchronisation. In addition, the data submitted needs to be consistent and accurate in across different systems and departments. An internal synchronisation in this sense can be realized by maintaining an internal integration engine. This engine is responsible for collecting data existing in multiple databases within an organisation and establishes an internal master item data catalog. As such, item information can be cleansed and undergoes standardization for purposes of publication to the data pool. A CPIM system can perform the task of customizing data for identified partners who need additional item information other than that established by the core standards (Garry 2004, p.55). 3. Future directions of Global Data Synchronisation Technology 3.1 The evolution with regard to the GDSN provides some indication on the future direction in regard to the strategies used by providers of data pool, and user’s preference. The mega pools may seem to face a stiffer market consolidation and this suggests the need for positioning themselves as global players in more than one country. This would help in terms of attracting a multinational retail and also companies in need of distributing their master data by embracing an international value chain. Future directions should also venture into product sectors that attract a global reach for instance apparel or electronics. This would enable Mega pools to realize numerous benefits and establish a larger base of multinational customers (Romanow 2006, p.29). 3.2 Conversely, the local specialists should maintain a focus on companies operating locally for instance, SMEs. Compared to the Mega pools, local specialist can improve services within the local markets or industries; for example, developing specific data models. They need to pay attention on specialized markets or industries and play a significant role in terms of onboarding smaller suppliers and also retailers to embrace the GDSN (Romanow 2006, p.29). 4. The benefits of Global Data Synchronisation Technology 4.1 Across the globe, different companies maintain databases that contain a lot of information regarding products they manufacture, sell or purchase. These databases also act as a catalogue where prospective customers can rely on to place their orders. However, companies often face a challenge in terms of updating or changing some of the information in their databases. These often affect a company’s catalogue as a result of lagging behind in terms of information updates. This is where the GDS comes in to provide solution for companies (Larking 2004, p.4). For companies or manufacturers, GDS is beneficial in the sense that, it enhances visibility required for stock level planning. In addition, GDS is responsible for improving retail exposure and the posting of products. It further plays part in the enhancement of category reporting. With GDS, manufacturers can realize easier means of introducing new products and there is lesser lead time in regard to product promotions (Nakatani, Ta-Tao & Duanning 2006, p.32). GDS is also important to manufacturers in the sense that firms can change or add catalogue items or even prices. Handling administrative data within the firm is also made easier by embracing GDS. In essence, GDS eliminates the need for organisations to have a cross reference tables and there is minimal disputes over invoices which can lead to a firm incurring huge costs (Barth 2004, p.38). Companies relying on the GDS can also realize fewer write-offs, accounts receivable and order defects. GDS also provide companies with the benefit of realizing minimal downstream shipping and doing away with billing errors. Having a GDS within a company is also suitable in the sense that it leads to efficient logistics operations. It is also easier to track or trace orders and there is minimal return shipment. GDS on another note benefits firms by ensuring companies engage in processing perfect orders and minimize the emergency orders. The technology further plays a role in improving efficiency among workers of different organisations. Where there is minimal administrative work, this means that various departments such as the sales or purchasing departments can focus their attention on improving the demand for their products or a firm’s performance. As a result, this will also improve the bottom line of companies using the GDS technology (Barth 2004, p.38). 4.2 In addition, GDS technology is responsible in promoting innovative programmes and new ways of undertaking a collaborative action. In essence, GDS technology is a leader in making global outsourcing a reality. It also helps to reduce costly redundancies existing within an IT system used by businesses across the globe. Further GDS can be recognized as the backbone for data sharing and can also assist to expand the supplier base. It is also responsible in regard to minimizing wastage of time while conducting various business processes within an organisation. This technology also has a benefit of enabling the launch of collaborative programmes targeting sales initiatives. Transparency is also assured by relying in the GDS technology and specifically in pricing or sourcing (Garry 2005, p.77). 5. The weaknesses of the Global Data Synchronisation 5.1 The common weakness in terms of implementing GDS emanate from the likelihood that most firms may face several challenges. Such challenges include difficulties in achieving the synchronisation of the internal data considered a pre-requisite to GDS. There is also the challenge of realizing the synchronisation of the external data and obtaining and sustaining support from other trading partners or the management within an organisation (Garry 2005, p.80). 6. Case Studies 6.1 GDS at Clorox Company This company was established in the year 1913 and mainly engaged in the production of liquid bleach. However, since then, the company has expanded into a global manufacturer of various leading brands that include the Clorox laundry additive. The company has also expanded its production to other products such as auto care products. At present, the company has over 7000 employees globally; however, similar to other companies, Clorox is faced with a mirage of challenges that includes maintain pricing information in a manner that synchronizes with their business partners. This problem is further worsened by the Clorox’s involvement in acquisitions which increased the firm’s portfolio. As a result problems evident in the company included high deductions on invoices as a result of pricing discrepancies. In taking a responsive measure, the company decides to address the identified challenges by adopting GDS to improve its data synchronisation. In order to eliminate problems with the rising costs related to pricing deductions, the firm endeavored in scrutinizing its internal pricing information. They also held meetings with business partners to agree in regard to synchronizing the pricing tablets. Once this was over, it was expected that there would be minimal pricing deduction; however, this appeared not to be the problem at Clorox Company (Garry 2005, p.82). This forced the firm to assess its physical product attributes and discovered that significant product attributes for instance, length, height and gross weight were to extent, inconsistent. These attributes as the company realized, play an important role in ensuring accurate pricing. The company considered the inaccuracies to impact negatively on pricing. This discovery provided Clorox with an insight to re-engage with their business partners for purposes of synchronizing the physical product attributes which resulted in significant reduction in pricing deductions. In essence, the steps that the firm took include doing away with the internal product specifications, synchronizing product information with the retailers, creating a management process to check on price variance and maintaining data synchronisation through an automated process. As a result of ensuring that the product attributes are in synchrony with their business partners, Clorox has reduced its price deductions to over 45%. This has seen the company improve with time as a result of adopting the GDS technology; in addition, the firm is in a position to capitalize on other GDS features (Garry 2005, p.84). References Barth, B 2004,’Synchronization Helping Ahold Get a Hold of Global Data’, Executive Technology, Vol. 6, no. 10, p. 38. Deek, F., Tommarello, J & McHugh, J 2003,’A model for collaborative technologies in manufacturing’, Int. J. Computer Integrated Manufacturing, Vol.16, no.4, pp.357-371. 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