CPG manufacturers and retailers have reached a crossroads in the way they conduct business. After years of consolidation and market expansion, trading partners are finding that they must increasingly rely on boosting the efficiency and effectiveness of their supply chains to help drive continued growth in earnings and shareholder value. New technologies are making dramatic improvements in these relationships possible through process automation and collaboration. While trading partners recognise the importance of such initiatives, many are uncertain how to proceed to achieve the optimum benefit. Data synchronisation is a critical first step in solving many problems that have long plagued the industry. It can be defined as: The timely and accurate updating of any item (i.e., product) information within and across enterprises to ensure a perfect, consistent match of data between the owner/originator of the product data and all users of the data. Item information includes core product data (e.g., a trade item descriptor) as well as extended attributes such as price, pallet size, ingredients, image, and potentially many others. Today, such data is shared by retailers and suppliers on a daily basis, but through labour-intensive and inconsistent methods. Critical information is often inefficiently managed by suppliers and communicated to retailers using incompatible media or formats. Improved sharing and processing of this data between trading partners would significantly reduce the time and costs associated with new product introductions, item updates, purchase orders and invoice deductions, while also improving collaboration in areas such as forecasting and replenishment. To achieve these ends, the industry must adopt a global, standards-based data synchronisation model, which will best enable the vision of seamless, highly responsive supply chain collaboration. However, establishing the foundation for data synchronisation is proving to be a complicated endeavour, in part because new capabilities must be built both within enterprises and between trading partners. For example, retailers often demand much more information than CPG manufacturers currently have available in their systems. The near-term costs to CPG firms of adding supplemental item attributes to their internal systems may prove to be significant. Moreover, standards have not yet been defined for many of the data attributes that retailers need, which extend beyond core item information to relationship or market-specific data. In order to effectively manage these challenges, companies will need to: - Drive definition of global standards for a comprehensive range of item attributes
- Begin mobilising their organisations today to prepare for future requirements
- Take actions that help drive the industry as a whole toward adoption
- Ensure that their partners' systems are interoperable and can scale effectively
- Maintain the flexibility to evolve their systems and strategies over time
In addition, while the long-term benefits of data synchronisation are significant, executives must recognise that they are largely indirect. Preparing for the initial synchronisation of core item data will take effort, especially on the part of CPG suppliers. Real benefits (e.g., lower invoice deductions and faster time-to-market) arrive when synchronisation encompasses market-, category- and relationship-specific data, such as pricing. Ultimately, the greatest rewards come through the enablement of more advanced supply chain initiatives. Data synchronisation provides a robust foundation upon which the full benefits of trading partner collaboration can be achieved and scaled. Retailers and suppliers need to start building data synchronisation capabilities today. Companies should select a few trusted strategic partners to work with, helping to push the development of standards, while maintaining the flexibility to adjust course as new standards and approaches are defined. Industry leaders are already well underway, and others must take care not to be left behind. To read the full report, download the pdf file at the top of this page. | 
