This article looks at how one distribution sector is tackling the data standardization challenge in collaboration with manufacturers and end-users through the Foodservice GS1 US Standards Initiative.
National foodservice redistributor Dot Foods has used EDI to automate transactions with suppliers for many years. But when product data between manufacturers and distributors doesn’t match, “all that efficiency goes out the window,” says Debbie Bower, e-commerce manager for Dot Foods, Mt. Sterling, IL. When corrections need to be made, a manual process is added back to the equation.
About five years ago, the company, which has seven distribution centers across the U.S., built a cross-functional team to examine the impact of inaccurate data. For example, bad case dimensions could result in wasted warehouse or trailer space, or incorrect weights could result in underweight or overweight trucks.
After trying to fix the problem by synchronizing data with suppliers directly, Dot Foods was only able to match 6 percent to 8 percent of items. So when the International Foodservice Distributors Association, the International Foodservice Manufacturers Association and the National Restaurant Association initiated a pilot program to determine the benefits of implementing data standards throughout the channel, Dot Foods joined as a founding member.
In the pilot, Dot found that 62 percent of the items it had across four major suppliers had at least one difference in item information. The company also found that 7 percent of its SKUs had been discontinued in the manufacturer’s system but were still active in Dot’s.
“We were surprised,” Bower says. “We thought we had pretty good data, though we knew it wasn’t perfect.”
In 2009, the Foodservice GS1 US Standards Initiative was launched with the goal of driving the voluntary adoption and implementation of GS1 Standards throughout the foodservice industry. Through synchronized product data up and down the supply chain, participants hope to address inefficiencies in the channel, respond more effectively to recalls and provide better information to consumers on nutrition and allergens.
The group set a goal of having 75 percent of the foodservice industry (as measured by revenue) voluntarily using GS1 Standards by 2015. The initiative is more than halfway to its goal.
As distributors across sectors have found, better data can lead to reduced waste and more efficient processes in their companies and throughout the channel. But foodservice distributors have some unique challenges they hope standardized and synchronized data can help them mitigate:
Recalls due to food safety issues;
Increased consumer demand for nutritional information; and
More demand for allergen information.
“There’s a huge interest in understanding the food that we eat,” says Dennis Harrison, senior vice president of GS1. Harrison is overseeing the Foodservice GS1 US Standards Initiative.
These days, the demand for information on nutrition and allergens is rapidly changing, leading to supplier uncertainty about what they may need next. What’s more, government requirements for food safety are also constantly shifting. This has helped to drive buying cooperative UniPro Foodservice’s members to support the initiative, according to Van Perry, vice president of business analysis for the 650-distributor group. “Moving forward in a strategic way will ease that apprehension,” he says. UniPro was a founding member of the initiative.
Perry says that building out a solution now is better than having one dictated by the government down the road.
Many of the foodservice initiative’s founding members have seen similar efforts to standardize data come and go. But three years into this initiative, participants are optimistic the effort will succeed thanks to its highly collaborative approach and the choice of GS1, a global data standards organization that is already used by more than 2 million companies across industries.
More than 180,000 foodservice items are now listed. “That’s what happens when you bring the community together,” Harrison says.
The initiative is focused on three GS1 Standards to accomplish its goals.
GS1, whose databases and identifiers are already used on the retail side of the food industry, assigns a GTIN, or a Global Trade Item Number, to each product. This provides a common name across the industry for given products from a given supplier. Assigned by the product’s owner, the number points to a global database that includes all the information a company needs to know without manual intervention.
GLN, or global location numbers, are used to identify distributors and operators so that the names for these companies are consistent in a supplier’s database. Used by all trading partners, this approach improves processes such as contract management, product deliveries, rebate programs, procure-to-pay and recalls.
The GDSN, or Global Data Synchronization Network, connects distributors, operators and manufacturers through a GDSN-certified data pool to a GS1 Global Registry. Data pools are electronic catalogues of standardized item data. The GDSN allows foodservice trading partners to have consistent item data in their systems and available to their trading partners.
In 2009, 191 companies in foodservice subscribed to the Global Data Synchronization Network. Now, there are more than 2,100 – a more than 10-fold increase in participation, according to Harrison.
Many consumer-facing industries have been using this system for a long time, but there has been increased interest in the B-to-B space, including the apparel and health care industries, according to Harrison.
The foodservice sector took a two-phase approach to standards implementation: Phase I includes data such as brand name, country of origin, individual unit measures, case weight, availability date and other standard information.
Phase II includes marketing attributes, such as ingredients, allergens, images, links to websites, expanded product descriptions, cooking instructions and other information frequently requested by customers.
Dot Foods knows firsthand the importance of Phase II data. For one quarter, Dot tracked the number of requests it received for marketing or nutritional data; it received more than 1,000. As a result of the foodservice industry initiative, Dot has added more of this information to its Dot Expressway, a Web portal where customers place orders, track purchase history and search the product catalog.
US Foods has also seen growing demand for this type of data. “The No. 1 demand that we receive from customers is to provide nutritional information, and they want it at their fingertips,” says Jason Gunn, supplier development specialist for national foodservice distributor US Foods, Rosemont, IL.
“Sales are also a huge driving force. The No. 1 request we hear from sales reps in the field is for images. Technology allows us to provide these types of information on a whim through websites or mobile apps, but that obviously requires quality product information to be made available to us.”
As with any industry-wide effort, challenges remain. While the Foodservice GS1 US Standards Initiative has seen growing adoption among distributors and manufacturers, those on the receiving end – operators such as foodservice providers or restaurants – have been slower to adopt the technology needed to take advantage of this data.
Another challenge is getting smaller regional vendors to adopt the standards. Perry says that smaller manufacturers are often more reluctant to invest in the systems needed because of their small SKU counts. But he believes that eventually companies will be driven to do so because their competitors will be doing it. “You could lose some sales opportunities,” he says.
But manufacturers don’t want to invest if they aren’t sure the customer is going to use the information. “When the rubber hits the road, it costs money to make it happen,” he says.
This is why collaboration is so critical in moving the initiative forward, he says. The Foodservice GS1 Standards Initiative has several committees with members from companies throughout the supply chain. Regular meetings with the different stakeholders have uncovered issues slowing adoption, such as the need to provide guidelines for images that distributors and operators were demanding. “A manufacturer can take one GS1-compliant image, rather than a different image for each customer who has different standards,” Gunn says.
Data accuracy is also a top concern. As a result, the initiative has convened a committee to identify where there’s potential for inaccurate data and to put together recommendations for best practices to ensure accurate data is exchanged, Bower says.
Individual companies have helped address some of these challenges. US Foods has a Product Information Management team that works with suppliers on why and how to get started on publishing their data. “Once a supplier engages with us to synchronize product information through the GDSN, we assign a PIM Coordinator to them,” Gunn says. Coordinators help suppliers publish their data and maintain an accurate catalog.
UniPro is working with its approved suppliers to engage them in Foodservice GS1 US Standards. The cooperative has also developed a Web-based system that helps members adopt and use the standardized data in their organizations.
Dot Foods has gone from having about 8 percent of items synchronized to 50 percent of total active items and 60 percent of all stocked items as a result of its participation in this initiative. That number continues to climb.
The success companies have seen is due in large part to the channel’s choice of global standard product identification through GS1, participants say.
In the past, the foodservice industry has tried one-off solutions, but they were often driven by just one part of the supply chain. It’s important to get buy-in from all participants, Bower says – manufacturers, distributors, brokers and operators. “There needs to be a compelling case for each group to move forward, or we’ll have a lopsided approach,” she says.
Perry agrees. “I think this one actually has wings. It’s moving along. But I think the historical doubt of longevity is keeping some people sitting on the sidelines,” he says. Perry believes that in the end the end-user will drive widespread adoption by demanding the type of standardization and information that this initiative is focused on.
US Foods’ Gunn is hopeful. “While conversations about the Global Data Synchronization Network or Global Trade Item Numbers are not always glamorous and the implementation of these standards continues to challenge us, consistent and updated product information is critical to survival in this industry.”
Learn more about the Foodservice GS1 US Standards Initiative at www.gs1us.org/industries/foodservice.
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