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IBM Confidential © Copyright IBM Corporation 2009 IBM Global Business Services and IBM Software Group The Data Crunch Report The Data Crunch Report The impact of bad data on the Retail and Consumer Products Industry ECR Asia-Pacific Conference Kuala Lumpur, October 2010 Chris Cave Jones. IBM Page 2 IBM Global Business Services and IBM Software Group © Copyright IBM Corporation 2009 CIES Top of Mind No surprise, it’s the economy & consumer demand that is #1 Food Safety is still very high priority Drive for Efficiency and data quality continues to underpin all TOM issues 600 decision makers in food and consumer goods across 54 countries Background to UK data crunch study

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Page 1: Chris data crunch

IBM Confidential

© Copyright IBM Corporation 2009

IBM Global Business Services and IBM Software Group

The Data Crunch ReportThe Data Crunch Report

The impact of bad data on the Retail and Consumer Products Industry

ECR Asia-Pacific Conference

Kuala Lumpur, October 2010

Chris Cave Jones. IBM

Page 2

IBM Global Business Services and IBM Software Group

© Copyright IBM Corporation 2009

CIES Top of Mind

• No surprise, it’s the economy & consumer demandthat is #1

• Food Safety is still very high priority

• Drive for Efficiencyand data qualitycontinues to underpin all TOM

issues

600 decision makers in food and consumer goods across 54 countries

Background to UK data crunch study

Page 2: Chris data crunch

IBM Confidential

Page 3

IBM Global Business Services and IBM Software Group

© Copyright IBM Corporation 2009

The evolving value chain of 2016

Background

Page 4

IBM Global Business Services and IBM Software Group

© Copyright IBM Corporation 2009

Background

� In tough economic

conditions the industry needs to maximise

efficiency

� Increasing demand for data from consumers –

nutrition, safety, lifestyle, environment, ethical

� Increasing regulation around food and product

safety and impact on the environment

� The UK retail industry is behind the curve in addressing poor supply chain data

� But “stars are aligning” - now is the time for the UK industry to address this issue

DATA CRUNCH PROJECT OBJECTIVES:

1. Understand the impact of inconsistent data on the UK supply chain (now and future)

2. Identify opportunities to increase efficiency and reduce costs

3. Collaborate with the stakeholders to agree and develop an industry action plan and solution

Page 3: Chris data crunch

IBM Confidential

Page 5

IBM Global Business Services and IBM Software Group

© Copyright IBM Corporation 2009

IBM’s Involvement

Following a tendering process, IBM were selected as GS1 UK’s partners for both software

and consulting services.

“This is the first time that such an exercise has been carried out on this scale. We are delighted to

work with IBM to analyse the data records we are being provided with. The combination of their leading data analysis software and their unrivalled industry experience made the choice of IBM an

easy one,” commented Malcolm Bowden, Business Development Director, GS1UK.

Page 6

IBM Global Business Services and IBM Software Group

© Copyright IBM Corporation 2009

Why IBM?

� Requirements:

� 1. Analytics tools:

� Analytics functionality

� Scalable

� Adaptable

� Flexible

� 2. Industry Knowledge

� Retail experience

� Supply Chain expertise

� Real world insights

� IBM’s Capabilities:

� 1. Business Analytics & Optimisation:

� Advanced analytics software

� Over 1 million records!

� Intuitive

� Structured

� 2. GBS Consulting Services:

� Worked with all major players

� Leaders in SCM

� Industry experienced

IBM’s Involvement

Page 4: Chris data crunch

IBM Confidential

Page 7

IBM Global Business Services and IBM Software Group

© Copyright IBM Corporation 2009

What we did

� Obtained data files from retail partners

� Reviewed each file for completeness using

� IBM Information Analyser software

� Matching of consumer unit and traded unit data between

� retailer files

� Requested supplier data

� Reviewed supplier files for completeness using IBM

� Information Analyser software

� Matching of consumer unit and traded unit data

� between suppliers and retailers

Step 1

Step 2

Step 3

Step 4

Step 5

Step 6

Step 1

Step 2

Step 3

Step 4

Step 5

Step 6

IBM’s Involvement

Page 8

IBM Global Business Services and IBM Software Group

© Copyright IBM Corporation 2009

Report Findings

� UK grocery sector identifies opportunity to better serve 21st century consumers

� GS1 UK report highlights golden opportunity

to enhance consumer experience through

improved product information

� Industry data standards to help manage the

demand for 4 fold increase in retail product

information

� Opportunity to realise savings of £1 billion

over the next five years

Page 5: Chris data crunch

IBM Confidential

Page 9

IBM Global Business Services and IBM Software Group

© Copyright IBM Corporation 2009

Results 80% - average level of retailer and supplier product data inconsistency

Report Findings

Page 10

IBM Global Business Services and IBM Software Group

© Copyright IBM Corporation 2009

�Over time, retailers have found ways of minimising, avoiding and managing these issues…

�…it may not be efficient, but it isn’t really broken, so why fix it?

SUPPLIERHEAD OFFICE

RETAILERHEAD OFFICE

FACTORY WAREHOUSE CONSOLIDATIONRETAILER RDC

STORE

PRODUCT FLOW

DATA/INFORMATION FLOW

Price file inconsistencies resulting in high invoice

matching workload

Incorrect item dimensions causing errors in space

planning systems

Ti-Hi data wrong or missing, causing receiving problems at RDCs and consolidation

points

Case dimensions wrong, causing cage and pallet fill problems & inefficiencies

Case weights inaccurate, resulting in cage and trailer

fill problems

Product descriptions differences, causing pricing

and replenishment confusion in stores

Invoice matching errors resulting in late payment of

invoices

Product coding and different hierarchies across retailers,

making data analysis challenging

Incorrect product life data generates RDC rejections

and waste

Bar code errors causing “no scans” and impacting

customer serviceDevelop workflow

systems to make invoice

matching as efficient as

possible

Check Ti-Hi on receipt

and maintain on local

system

Get samples from suppliers,

measure products again,

maintain in local space system

97.3%ECR On-ShelfAvailability Survey Aug 09

Report Findings

Page 6: Chris data crunch

IBM Confidential

Page 11

IBM Global Business Services and IBM Software Group

© Copyright IBM Corporation 2009

So what for Industry?

� Retailers not using supplier data

� Re-measuring within merchandising and depots

� Duplication of effort

� Suppliers sending sample products to different retailers

� Suppliers’ effort to complete numerous different New Line Forms

� Trading teams completing New Line Forms when data is fixed later in the

process

• Significant opportunities to better serve 21st century customer by managing the 4 fold increase in retail product information

• Opportunity to realise huge savings over the next five years

Report Findings

Page 12

IBM Global Business Services and IBM Software Group

© Copyright IBM Corporation 2009

CONSOLIDATION

SUPPLIERHEAD OFFICE

RETAILERHEAD OFFICE

FACTORY WAREHOUSE

RETAILER RDCSTORE

PRODUCT FLOW

DATA/INFORMATION FLOW

WEB

MOBILE

CALL CENTRECATALOGUE

GLOBALSUPPLY

TRACEABILITY

CARBON DATA

PACKAGINGINFORMATIONCOMPLIANCE

LOCALSOURCING

MULTI-CHANNEL

CONSUMERDATA

NUTRITIONALINFO

Growing Data Requirements

Report Findings

Page 7: Chris data crunch

IBM Confidential

Page 13

IBM Global Business Services and IBM Software Group

© Copyright IBM Corporation 2009

40% of shoppers have specific dietary needs & need more

product info

Coke Retailing

Research Council

66

250400%

increase in

data

required to

be held by

retailers

The future data needs

Report Findings

Page 14

IBM Global Business Services and IBM Software Group

© Copyright IBM Corporation 2009

GS1 India – IBM Data crunch study

Retailers

� Spensers

� Reliance

� Aditya Birla

� Shoppers Stop

Manufacturers

� Hindustan Unilever

� Johnson & Johnson

� India Tobacco

� Dabur

Page 8: Chris data crunch

IBM Confidential

Page 15

IBM Global Business Services and IBM Software Group

© Copyright IBM Corporation 2009

Initial data quality observations

100%100%100%29%case Weight Missing

100%100%100%29%case L,W,H dimensions missing

100%99%5%9%Each weight missing

100%100%1%38%Each L,W,H dimensions missing/incorrect

0%0%1%5%Case configuration/ eaches in a case missing

31%24%18%51%Shelf life blank or zero

100%100%100%65%Vendor, Supplier product code missing

0%0%4%9%MRP Missing

1%0%0%3%Missing/Incorrect EAN Codes

0.7%0.0%0.0%0.4%One EAN number attached to multiple item codes

0%43%18%60%Under the same retailer item code there are many EAN codes

attached

1313173532651014Available EAN codes for Analysis

Retailer 4Retailer 3Retailer 2Retailer 1Initial Observations

100%100%100%29%case Weight Missing

100%100%100%29%case L,W,H dimensions missing

100%99%5%9%Each weight missing

100%100%1%38%Each L,W,H dimensions missing/incorrect

0%0%1%5%Case configuration/ eaches in a case missing

31%24%18%51%Shelf life blank or zero

100%100%100%65%Vendor, Supplier product code missing

0%0%4%9%MRP Missing

1%0%0%3%Missing/Incorrect EAN Codes

0.7%0.0%0.0%0.4%One EAN number attached to multiple item codes

0%43%18%60%Under the same retailer item code there are many EAN codes

attached

1313173532651014Available EAN codes for Analysis

Retailer 4Retailer 3Retailer 2Retailer 1Initial Observations

Under 40%40% - 70%70% - 100%

Page 16

IBM Global Business Services and IBM Software Group

© Copyright IBM Corporation 2009

Consumer Unit match across retailers

66 %22 %1 %E ac h es Pe r C ase

65 %29 %7 %She lf L ife

91 %82 %4 2%M R P

Att r ibu tes

m a tc h ed

ac ros s a n y 2 re ta ile rs

A ttr ibu tes

m a tc h ed

a cro s s a n y 3 reta ile r s

A tt ri bu te s

m a tc h ed

ac ros s a ll 4 re ta ile r s

E xa ct M a tch

Attribu te

66 %22 %1 %E ac h es Pe r C ase

65 %29 %7 %She lf L ife

91 %82 %4 2%M R P

Att r ibu tes

m a tc h ed

ac ros s a n y 2 re ta ile rs

A ttr ibu tes

m a tc h ed

a cro s s a n y 3 reta ile r s

A tt ri bu te s

m a tc h ed

ac ros s a ll 4 re ta ile r s

E xa ct M a tch

Attribu te

Unde r 40 % M a tc h

4 0% - 70 % M a tc h

70 % - 100 % M a tc h

• The sh e l f l i fe d a ta is cr it ic a l f o r en su r ing prod u ct fre shn e ss , D isc re pa ncy

h ere c an h a ve finan cia l im p act a s we l l sa fet y c oncern s

• Ca se con fig ura tion d a ta if in c or re c t c an a lso re su lt in f ina n cia l im pa ct

i f u sed in ca lcu la t in g th e u n it s rece iv ed /inv o ice d

• MRP is t he on ly pa ram e te r wh ich is a t a reaso nab le leve l (D isc rep ancy

a ttrib utab le t o huma n error and a ll sys tems no t up da ted )

Page 9: Chris data crunch

IBM Confidential

Page 17

IBM Global Business Services and IBM Software Group

© Copyright IBM Corporation 2009

Consumer unit attribute match across 2 retailers

61%3%Ea ch D im e ns ion Su m

22%1%E ac h Vo lum e

55%51 %Eac h Ne t W eight

49%7%E ac h H ei gh t

13%2%Eac h W idth

23%1%Eac h L en gt h

A ttr ibutes

m atch ed

ac ro ss an y 2 re tailers

E xact Match

A ttri bu te s

m a tc hed

a cr oss an y 2 r eta ile rs

To lerance 10 % +/-A ttribu te

61%3%Ea ch D im e ns ion Su m

22%1%E ac h Vo lum e

55%51 %Eac h Ne t W eight

49%7%E ac h H ei gh t

13%2%Eac h W idth

23%1%Eac h L en gt h

A ttr ibutes

m atch ed

ac ro ss an y 2 re tailers

E xact Match

A ttri bu te s

m a tc hed

a cr oss an y 2 r eta ile rs

To lerance 10 % +/-A ttribu te

U n d er 40 % M atc h

40 % - 70 % M a tc h

70 % - 10 0 % M atch

• Be sides ne t w eigh t the d imen sion dat a i s in red. Th e d im ensions did n ot ma tch be tween Reta ile rs

•E ven a fte r app lying a tolera nce of + /- 10% none of the parameters were ing reen

Page 18

IBM Global Business Services and IBM Software Group

© Copyright IBM Corporation 2009

Consumer Unite Attribute match with 4 retailers by supplier

33%62%23%42%MRP

8%

0%

Supplier 3

0%0%0%Shelf Life

3%

Supplier 1

3%

Supplier 2

0%

Supplier 4Attribute

Eaches Per Case

33%62%23%42%MRP

8%

0%

Supplier 3

0%0%0%Shelf Life

3%

Supplier 1

3%

Supplier 2

0%

Supplier 4Attribute

Eaches Per Case

Under 40% M atch

40% - 70% M atch

70% - 100% Match

• There is significant discrepancy between Retailer and Supplier data.

• Ideally there should not have been any discrepancy if the data from Suppliers

was used by Retailers without any manual intervention.

• This clearly shows that Retailers are maintaining their own version of data whichis further impacted by manual errors

Page 10: Chris data crunch

IBM Confidential

Page 19

IBM Global Business Services and IBM Software Group

© Copyright IBM Corporation 2009

Consumer unit attribute match across 2 retailers by supplier

0%24%67%32%Each Net Weight

0%

0%

0%

0%

Supplier 3

0%

0%

0%

0%

Supp lier 1

0%

0%

0%

0%

Supplier 2

0%

0%

4%

0%

Supplier 4

Each Length

Each Height

Each W idth

Each Volume

0%24%67%32%Each Net Weight

0%

0%

0%

0%

Supplier 3

0%

0%

0%

0%

Supp lier 1

0%

0%

0%

0%

Supplier 2

0%

0%

4%

0%

Supplier 4

Each Length

Each Height

Each W idth

Each Volume

19%43%70%45%Each Net Weight

8%

18%

24%

22%

Supplier 3

12%

48%

10%

29%

Supplier 1

0%

0%

0%

0%

Supplier 2

23%

48%

42%

38%

Supplier 4

Each Length

Each Height

Each Width

Each Volume

19%43%70%45%Each Net Weight

8%

18%

24%

22%

Supplier 3

12%

48%

10%

29%

Supplier 1

0%

0%

0%

0%

Supplier 2

23%

48%

42%

38%

Supplier 4

Each Length

Each Height

Each Width

Each Volume

EX

AC

T M

AT

CH

WIT

H 1

0%

To

lera

nc

e

Page 20

IBM Global Business Services and IBM Software Group

© Copyright IBM Corporation 2009Page 20

GS1 AUSTRALIA – IBM Organisations Involved - Grocery

Page 11: Chris data crunch

IBM Confidential

Page 21

IBM Global Business Services and IBM Software Group

© Copyright IBM Corporation 2009Page 21

GS1 AUSTRALIA – IBM Organisations Involved - Hardware

Page 22

IBM Global Business Services and IBM Software Group

© Copyright IBM Corporation 2009Page 22

What is being done

� Obtained data files from retail partners

� Reviewed each file for completeness using

IBM Software Tools

� Matching of consumer unit and traded unit data between

retailer files

� Requested supplier data

� Reviewed supplier files for completeness using IBM

software tools

� Matching of consumer unit and traded unit data

between suppliers and retailers

Step 1

Step 2

Step 3

Step 4

Step 5

Step 6

Step 1

Step 2

Step 3

Step 4

Step 5

Step 6

Process followed

Page 12: Chris data crunch

IBM Confidential

Page 23

IBM Global Business Services and IBM Software Group

© Copyright IBM Corporation 2009Page 23

Current Status

� Australian Grocery retailer data analysed for consistency & alignment with Supplier data

� Australian Hardware retailer data analysed for

consistency & alignment with Supplier data

� 2.5 months of data review, clarification, and re-submission in a number of circumstances.

� Propose to lock data down for final report run by

October 8.

� Commence data analysis after October 11.

Page 24

IBM Global Business Services and IBM Software Group

© Copyright IBM Corporation 2009

What does this mean for companies?

RETAILERS:

� Tackling data issues cannot wait

� What does it mean?

� Solution options

� Internal IT impacts

� Process impacts

� Where do I start?

� Drive competitive advantage?

MANUFACTURERS:

� What are the Retailer Agendas?

� Do I become a Leader or Laggard?

� What does it mean?

� Solution options

� Internal IT impacts

� Process impacts

� Where do I start?

Page 13: Chris data crunch

IBM Confidential

Page 25

IBM Global Business Services and IBM Software Group

© Copyright IBM Corporation 2009

Facilitated for Industry

by GS1

GS1’s Solution

200+ Item standard attributes

Global Product Classification

Data Quality Framework

UK New Lines Form Adopted so far by ASDA and JS

GS1 STANDARDS

Understand data

Allowing all GS1 UK supplier members to manage their master

data centrally as part of a membership service

Ensure all data is cleansed to GS1 standards

My PIM

Create, Cleanse and Manage Data

Enter once - publish to manyusing a global standard network of

interoperable data pools

One version of ‘the truth’ globally held and accessible by all

GDSN

Exchange Data

What does this mean for companies?

Page 26

IBM Global Business Services and IBM Software Group

© Copyright IBM Corporation 2009

How can IBM help?

Consulting:

� Thought Leadership

� Solution Design

� Process Change

� Systems Implementation

� Application Integration

Software:

Discuss the Information Agenda

� Infosphere:

� Data Stage

� Information Analyser

� MDM Server for PIM

� Traceability

Page 14: Chris data crunch

IBM Confidential

Page 27

IBM Global Business Services and IBM Software Group

© Copyright IBM Corporation 2009

Contacts

GBS

Chris Cave Jones

Growth Markets Software Lead for Consumer Products and Retail

[email protected]

Tel: +65 9369 2114

© Copyright IBM Corporation 2009

IBM Global Business Services and IBM Software Group

Thank YouThank You