Commerce - Other
GS1 and the GDSN continue to enhance consumers' ability to feel confident about supplier-provided product data.
Consumers today rely on the Internet and mobile applications to shop, research products, find new recipes, plan meals, and more. An estimated 25% of consumer packaged goods (CPG) purchases are influenced by the Internet and mobile devices.1 And according to Google, smartphone owners reported researching products on their smartphone while at home (58%), on the go (43%), or in the store (31%).2
The risk is that 35% of consumers say they would never use a mobile shopping app again if it contained incorrect product data, and 38% would not purchase the product if they did not trust the product information displayed about it on their smartphone.3 Consumers want reliable, personable, and secure access to information on the products they're purchasing for themselves and their families. It's imperative for a parent whose child has a peanut allergy to read the ingredient lists and descriptions of every product purchased, and the young adult living with diabetes must feel confident that the back-of-pack information found online is the same as the information found on the store shelf.
Oftentimes manufacturers and retailers are forced to rely on data that lies within existing Enterprise Resource Planning (ERP) systems to populate their Websites, mobile apps, and weekly circulars. This information is typically stored in multiple business systems across many lines of business, is difficult to access, and is known to be incomplete and outdated. On the other hand, third-party coupon and shopping websites and mobile app developers are notorious for scraping product information off the Web or using a piecemeal approach to support their applications. The danger in both scenarios rests in the accuracy of the product information, or lack thereof, that is being published daily to millions of consumers.
The Influence of Global Standards
The financial impact of publishing bad data is nearly immeasurable due to the many areas of business the problem affects—product development, marketing, warehousing, plannogramming, transportation, and logistics. Not to mention the devastating impact poor-quality data has on product performance and profit margins.
Throughout the CPG, fresh food, healthcare, apparel, general merchandise, and many other industries, damaging inconsistencies exist in how products are priced, displayed online, and described. Unlike a box of cereal, no two heads of cauliflower weigh or measure the same. Some retailers sell cauliflower at a unit price while others sell the product at a price based on weight. Although this pricing model doesn't impact consumers' purchases, it wreaks havoc for the manufacturer responsible for keeping record of the cauliflower and communicating those product details to its global trading partners. For example, the manufacturer's retail partner will want to know how many boxes of cauliflower will be delivered because this impacts the warehouse space required and must-sell-by dates. Their wholesale partner must know how much each box of cauliflower and pallet will weigh so they can accurately pack their trucks and calculate transportation expenses. This is why standards bodies like GS1 are dedicated to the development and implementation of standards that improve the efficiency and visibility of information across supply and demand chains.
GS1 standards provide a framework that allows products, services, and information about them to move efficiently and securely for the benefit of businesses and the improvement of people's lives.4 To achieve this, GS1 established the Global Data Synchronization Network (GDSN) to enable supply chain partners to send and received synchronized product information via GS1-certified data pools at any time from anywhere in the world.
GS1 is a global entity comprised of member organizations in over 100 countries that work collaboratively across supply chains and sectors (manufacturers, distributors, retailers, hospitals, transporters, logistics, technology providers, etc.). In North America, GS1 US uses the framework provided by GS1 to create standards that make the supply chain faster, more efficient, and less complex and costly.
The Attribute Explosion
Today, supply chain partners that choose to publish their product information to GS1's GDSN are required to submit a core set of standard attributes per product based on their industry. However, with consumers' increasing demand for more product information, companies are being required by their trading partners to submit additional product attributes, including digital assets, above and beyond those necessary to participate in the GDSN. Thus, the concept of the "attribute explosion" was born.
In an effort to provide consumers with accurate, trustworthy digital product information and to protect brand owners from others publishing questionable data about their products online, GS1 US developed the Business-to-Business-to-Consumer (B2B2C) Initiative. The B2B2C was established to address the "attribute explosion" and both supply chain (B2B) and consumer needs (B2B). This Initiative continues to be refined.
Pending Healthcare Mandates
In parallel to the global standardization of product attributes, the U.S. Food and Drug Administration (FDA) has proposed a rule requiring healthcare manufacturers to label their products with unique device identifiers (UDIs). The UDI system aims to help the FDA identify problems with medical devices much earlier, track recalls more efficiently, and improve patient safety. The UDI proposal is projected to be finalized sometime this year.
Components of the FDA UDI System5
- The UDI is a unique numeric or alphanumeric code that includes a device identifier (DI), which is specific to a device model, and a production identifier (PI), which includes the current production information for that specific device, such as the lot or batch number, the serial number, and/or expiration date.
- The UDI must appear on the label in a human-readable format, as well as in a manner that can be read by automatic identification and data capture (AIDC) technology, such as a linear or 2D DataMatrix barcode. A unique UDI must be applied to the "base package" and higher levels of packaging.
- The UDI will be submitted to the FDA Global UDI Database (GUDID) and include a standard set of basic identifying data attributes for each UDI.
Some medical device manufacturers are taking the "wait and see" approach because the guidelines have yet to be announced. Others are getting in on the ground floor and using GS1 standards to address this mandate via a certified data pool such as 1WorldSync.
Data Synchronization in Real Life
The competitive landscape combined with stringent regulatory changes and increased customer demands for accurate product information are driving companies to evaluate their current master data management processes. Because this data can reside in multiple ERP systems, data warehouses, CRM systems, procurement systems, digital libraries, and spreadsheets—not to mention the challenges of overlapping stock-keeping units (SKUs), multiple languages, and varying measurements (standard vs. metric)—IT executives are being kept wide awake at night attempting to figure out how to aggregate and validate all of this information.
In response, executives are entertaining the idea of implementing a flexible Product Information Management (PIM) solution that integrates with existing business systems and serves as a central conduit to their system of record. A successful PIM implementation approach consists roughly of three major steps:
- Preparation—In this stage, companies analyze the status of current item data, including processes and systems. Questions that are commonly asked in the phase include "Where is my data stored?" "How many different systems will I need to access?" "Who is ultimately responsible for a particular attribute?"
- Analysis—The analysis stage determines a company's state of attribute completeness per category/product and line/item and then validating whether the data is current. If participating in the GDSN, a company must audit whether all GDSN-required attributes are populated. If incomplete, the company must decide what tool or third-party service they will use to get the remaining product data. Furthermore, a company must define its processes, e.g. what needs to happen and by whom if items in existing systems are reworked.
- Implementation and Execution—The process of implementation can be quite challenging as a company struggles with disparate business systems, data discrepancies, and new product attributes required by the trading partner. It's extremely important not to harm existing procedures and systems while architecting the PIM to properly support GDSN and non-GDSN capabilities. A preliminary step is to validate all existing item attributes against current GDSN rules to ensure it meets the required standards. The execution phase involves installing a configurable and flexible solution that allows multiple users and groups to access controlled and personalized views of products, brands, and attributes. In addition to user-level security and access, there also needs to be an internal workflow chain to approve and validate any attribute modifications. For example, if an item changes from 6oz to 4oz in the ERP, who needs to sign off on this before passing the information to your trading partners via the GDSN? In many situations, the product manager, warehouse manager, logistics staff, sales team, and marketing all need to approve and modify attribute changes. "Is a new product photo required?" "Does this change shipping fees?" "Can pallets hold additional cases with the new smaller size?" And so on. My point is that one small modification can have a significant impact on the company.
Many companies feel that they're forced into data synchronization and primarily see it as an extra cost. While data synchronization initiatives vary drastically per company, one aspect remains consistent: it's not a matter of if, but when, trading partners will require a comprehensive set of product data and images. Data synchronization and the process of improving data quality can instill confidence in shoppers that the information they consume is accurate and trustworthy. In addition, high-quality data can lead to favorable returns on investment and support many applications and lines of business, such as eCommerce, product catalogs, data publishing, Electronic Data Interchange (EDI), and mobile apps.
1 Source: eMarketer: U.S. Digital Grocery Shopping, May 2012
2 Source: Google: Our Mobile Planet, May 2012—http://www.google.com/think/research-studies/our-mobile-planet-united-states.html
3 Source: GS1 and Capgemini, 2011—http://www.gs1.org/docs/b2c/Beyond_the_Label.pdf
4 Source: The Value and Benefits of the GS1 Systems of Standards—http://www.gs1.org/docs/GS1_System_of_Standards.pdf
5 Source: How Can GS1 Standards Help Your Company Meet FDA UDI Requirements—http://www.gs1us.org/industries/healthcare/gs1-healthcare-us/fda-udi