Wednesday 30th Sep 2020 - Logistics & Supply Chain

Reality check

Writing about IT as I do, it is easy to assume that what one writes about is normal – that some new implementation is simply the tip of an iceberg and every other company in that line of business has installed something similar or is about to.

It”s a perception reinforced by numerous analysts” reports. For example, the latest copy of Martec International”s IT in Retail tells us that 100 per cent of leading retailers have merchandise systems, 98 per cent have EPoS and 94 per cent some sort of logistics management technology. EDI, we are led to believe, has been ubiquitous for years while everyone has a clean and consistent master data file.

Technology is mature and rapidly becoming a commodity. Or is it?

Two comments from IT vendors in the run-up to Christmas reminded me that perhaps good IT is not quite as widespread as we believe.

The first was a senior retail store systems executive who had been surprised to discover, when buying three shirts for the price of two from a national high street chain, that the only way the sales assistant could record the sale was to ring in all three items and then give a 100 per cent discount for the value of one.

Managing BOGOF (buy one get one free) and similar deal offers was something that he (and I) thought all EPoS systems had been able to do for years. Apparently not.

The second, pointed to the inadequacy of most forecasting and planning systems, admitting that his own company”s planning product had only just been integrated with its other supply chain tools.

According to the Martec study, merchandise planning tools in retail are equally thin on the ground, used by only 57 per cent of the leading retailers it questioned. On closer inspection of the raw data it would seem that in many of these cases, planning tool equals Excel so goodness knows what the other 43 per cent use.

Poor IT systems and information quality do not seem to surprise Sean Wilkins, director of product data quality solutions at GXS.

A year ago, in an examination of some 14,000 product lines for retailer Nisa Today, GXS found that the information files for every single line contained one or more errors. Now, by using a rules-based product information system based on Udex technology which GXS acquired last year, these errors have almost been eliminated.

”There are around 200 product attributes covered by GS1 standards,” says Wilkins, ”But individual retailers use many more than that to define different items, packaging, pricing, waste management, or whatever, and not all suppliers handle the attributes in the same way so inevitably you get errors and mismatches.”

Wilkins talks of some 1,500 various attributes being added pre-standardisation. And as everyone knows, agreeing changes to standards can take a very long time.

As the old computing adage has it, garbage in, garbage out, and with many businesses admitting to at least 35 per cent data inaccuracy in their product files, errors are hardly unusual.

Add to this shortfall in data quality inadequate systems integration or patched-up legacy applications and it is hardly surprising that retailers end up with little idea of what is in store, Poor information was something that retailers could keep discreetly to themselves but no longer in transit, on order or at the warehouse.

At one time, poor information was something that retailers and suppliers could keep discreetly to themselves but no longer. A lot of us are using the internet to research the products we buy and errors and omissions very quickly become public.

According to a pre-Christmas study on expected shopping activity by Deloitte, two-thirds of UK consumers expected to research or purchase goods online for Christmas 2007 compared with just over half who used the internet for their Christmas shopping in 2006. Make a mistake in product descriptors on the web and not only do you have unhappy shoppers and loss of goodwill but an awful lot of returns to contend with too.

Today”s IT may be clever but theoretical expectation and practical performance are too often still poles apart.

Penelope Ody is a regular columnist with SCS and is a retail market specialist

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