According to a major report released by the not-for-profit supply chain standards and solutions organisation, GS1 Australia , the total cost of bad data in the Australian grocery supply chain will be AU$1.035 billion over five years.
The GS1 Australia Data Crunch Report is a report for the retail grocery industry prepared by GS1 Australia in conjunction with IBM to highlight the impact of bad data on profits and consumer service in the Australian grocery industry.
Together with IBM, GS1 Australia compared data on grocery products held by three major supermarket retailers and matched this against product data from four major suppliers. The GS1 Australia Data Crunch Report has revealed that retailers are working with data that is inconsistent more than 80% of the time.
Consequently, Australian grocery retailers and suppliers will experience over AU$350 million in profit erosion and AU$675 million in lost sales as a result of bad data. This is a conservative estimate based on a combination of process inefficiencies, duplications and workarounds across the retailer and supplier’s supply chains, together with administrative shrinkage and shelf stock-outs caused by inaccurate data.
The study also shows that retailers and suppliers using data synchronisation through GS1net show significantly better data quality results than those who did not (fully) adopt data synchronisation.
GS1net is GS1 Australia’s data synchronisation solution for the Australian and New Zealand markets, allowing manufacturers and suppliers to enter, validate, store and maintain product, pricing and other related trade information in a single location for sharing with their trading partners.
The study was supported by Woolworths, Coles, Metcash, Kimberly-Clark, Nestlé, Procter & Gamble and Unilever.
The report was supported by IBM, the Australian Food and Grocery Council (AFGC) and Efficient Consumer Response Australasia (ECRA).
Commenting on the study’s findings, GS1 Australia Chief Executive Maria Palazzolo said that the report highlighted the importance of implementing data synchronisation which, through the elimination of manual processes and data errors, helps businesses reduce costs, speed up the order-to-cash cycle and improve trading relationships.