There is a £1 billion prize to be had by retailers if they can improve data practices in the supply chain.
The figure is highlighted in a new report from GS1 UK, “The Data Crunch Report”, which calculates that the savings of £700m are available now with a further £300m coming from new sales.
Savings are available in two main areas, it says: avoiding shrinkage and eliminating workaround processes. The total savings from eliminating workarounds and corrections was estimated at £135 million for retailers and £100 million for suppliers. Additionally, the total savings from avoiding shrinkage were placed at £250 million and £225 million for retailers and suppliers respectively.
And these appear to be fairly robust figures – coming as they do from the four largest supermarkets and their four largest suppliers.
It has long been recognised that data quality is an issue in supply chain, but even so it is slightly shocking to see just how big the issue is.
And, given that the retailers are generally considered to be pretty good at managing this kind of information, it seems likely that there are industries where the opportunities could be even bigger.
However, to be fair, it is only through the development of more sophisticated systems that it is becoming possible to address some of these issues at all.
What is clear from the GS1 report is that improved collaboration between retailers and suppliers is key to realising the savings in the retail supply chain. In fact Sainsbury’s trading director Mike Coupe says: “We must all work with our suppliers to ensure a reliable flow of information and product data to make this happen.”
Collaboration is a familiar theme for supply chain professionals, but it’s not every day that you come across such a compelling call to action.