“Data Synchronization” has received a lot of play lately, both for its own merits and (as many have argued) as a prerequisite for RFID to drive real value in the consumer goods – retail supply chain.

Authors Gurram Gopal and Eric McMIllan, in a recent issue of “Supply Chain Management Review” provided at the link above, layout the basics of the scope, business case and keys to success for a data synchronization project that should be useful for anyone considering such an initiative.

The reality is there are really two problems, as the authors note: bad product related data within companies (focused in this case mostly on consumer products manufacturers) and then a lack of synchronization of even good data with customers and their buying organizations. “Pieces of information related to the same product or service differ between supply chain partners or between systems in the same company”, Gopal and McMillan note in defining a lack of data synchronization.

The problems and costs from poor data synchronization are many. The authors cite the following statistics:

• On average, 3.5% of sales are lost each year due to faulty supply chain / product information.
• 30% of consumer goods / retail item catalog information is incorrect.
• 60% of invoices to retail are incorrect, often due to data synch-related issues.
• 43% of all invoices become subject to some form of deduction.

All this is costly to both manufacturers and retailers. Data sync related issues are also a major factor in elongated cycle times to roll out new products.

Global data synchronization is the answer, the authors contend. GDS means “achieving consistent information values for items…. within and between organizations”. It is implemented in two steps:

• Internal: ensuring data values for items are consistent across the enterprise, a challenge; given that multiple application systems are often involved.
  
• External: creating links on integration between trading partners so that this information can be exchanged.

While there are many approaches to creating these linkages, in consumer goods-retail supply chains many are using UCCnet as the exchange service.

The article concludes with a short case study on a tools manufacturer that successfully executed a data synch project. Measurable benefits were achieved in the following areas:

• Sales force time dealing with information issues
• Customer Service time reconciling data discrepancies when a customer places an order
• Ability of the customer to process advance ship notices in receiving
• Out of stocks
• Time-to-market for new products
• Inventory levels
• Invoice reconciliation effort and deductions

Is data synchronization the panacea many claim? Why are so many companies slow to embark on data synch initiatives? Let us know your thoughts.