Sunrise may catch grocers napping

A survey conducted by EDS and the Grocery Manufacturers of America (GMA) reveals that fewer than 30% of current product inventory systems used by food, beverage and consumer products manufacturers are compliant with the looming Sunrise 2005/Global Trade Item Number (GTIN) requirements. The deadline for global compliance to these retail industry standards is 1 January 2005.

In a recent poll conducted among GMA`s member companies that represent more than $500 billion in annual sales, 75% of respondents indicated that their retail customers were asking them to be GTIN ready. Only 30% of respondents, however, said their applications and data stores had been remediated and were capable of handling new Sunrise 2005/GTIN requirements.

"Clearly there`s much work to be done to bring the US consumer products industry into compliance," said Pam Stegeman, GMA VP of industry affairs. "As an advocate for brand manufacturers` ability to market their products profitably, GMA recognises this as a matter of urgency for our members as they move forward to compete globally."

To be Sunrise 2005/GTIN compliant, retailers must adopt a 14-digit data structure that will support the emerging GTIN protocol, allowing complete item identification of any global data carrier to support cost-efficient and seamless international trade.

"By acting now, retailers and consumer goods manufacturers can drive out lost revenue caused by vendor data misalignment," said Chris Sellers, Global Leader, Consumer Industries and Retail Industry Practice, EDS. "They can also significantly reduce costs associated with goods handling, logistics, inventory control and financial transactions. The challenges of system renovation pale in comparison to the benefits of aligning for seamless global trade."

Other significant findings from the EDS-GMA survey include the following:

* More than 80% of respondents indicated they would move to GTIN compliance to enable a more consistent assignment of product identification indicators.

* 75% of respondents have begun remediation efforts; only 25% indicated they were still using a manual process or had not yet initiated activities related to data synchronisation.

* More than 70% of respondents said that their applications and data stores currently do not accommodate the 14-digit field.

* 55% said their enterprise applications do not differentiate the case UPC from the item UPC, a capability that will be required in 1 January 2005 by North America`s largest retailers.

* 83% indicated that their systems utilise an internal product code, a capability that matches the product code with the UPC code and is necessary for GTIN data synchronisation.

* 58% said they would connect to an external data pool rather than implement their own to cleanse and synchronise data.

According to Stegeman, CPG manufacturers should ask five key questions to learn more about the Sunrise 2005/GTIN issue, and how they compare to others in the industry:

1. Are your retail customers asking for your support in helping them prepare for data synchronisation?

2. Does your organisation still operate manually on the global data synchronisation continuum?

3. Do your current applications accommodate the 14-digit field length?

4. Do your enterprise applications differentiate the case UPC from the item UPC?

5. Do you have an enterprise-wide integration strategy?

The Sunrise 2005 initiative was brought about by the lack of common identifiers between various global trading countries, creating inefficiencies and expenses related to how products and services are referenced and traded around the world. As a way of bringing consistency and generating sufficient quantities of unique item and service identifiers globally, the Uniform Code Council (UCC) and the European Article Numbers (EAN) International have come together to create an all-encompassing product identifying data structure, known as the GTIN, that can incorporate all the UPCs around the world.

Christine Spivey Overby, senior analyst at Forrester who analyses the impact of technology change on CPG manufacturers, distributors and retailers, said: "Bad data costs the CPG industry billions."

Overby added: "Data inconsistencies among trading partners cost the industry between $25 billion and $100 billion annually...and firms that get an early start sharing clean data with their trading partners will use money formerly wasted on inefficient processes to seed investments in new technology innovations. These first movers...will distance themselves from the CPG pack as these new investments further reduce inefficiencies while improving customer service levels."

For complete information on the Sunrise 2005/GTIN initiative, visit http://www.eds.com/services_offerings/so_sunrise05.shtml.