Feb 19, 2004
WASHINGTON, DC - February 19, 2004 – Retail and consumer products companies must continue to drive implementation of data standards, item registry, and data synchronization if they are to take full advantage of advanced collaborative technologies such as the Electronic Product Code (EPC) and Radio Frequency Identification (RFID), according to a new action plan for electronic collaboration in the industry.

The plan, “Connect the Dots: Harnessing Collaborative Technologies to Deliver Better Value to Consumers,” was commissioned by Grocery Manufacturers of America (GMA), the Food Marketing Institute (FMI), and the National Association of Chain Drug stores (NACDS) and developed by consulting firms A.T. Kearney and Kurt Salmon Associates (KSA). It is based on interviews with more than 100 executives at 80 retail and consumer packaged goods (CPG) companies.

Recent analysis confirms that industry executives view global data synchronization ¯ in the form of common data standards, a single item registry (Global Registry) and party/item synchronization ¯ as the foundation for electronic collaboration. There is broad consensus that global data synchronization is the first step toward maximizing the cost, efficiency, and productivity benefits of EPC and RFID.

“While RFID and EPC can provide more detailed, accurate, and frequent data messages, these messages are not useful unless the data they transmit is correct,” said Pamela Stegeman, vice president, supply chain and technology, for GMA. “Without clean, synchronized data, RFID and EPC technology will just enable faster transactions of the wrong information.”

Broad trading partner implementation of data synchronization is another critical factor in realizing benefits, according to the action plan. Savings by any one company will depend on its ability to encourage its trading partners to be part of the collaborative solution. This underscores the urgency for retail and CPG companies to get involved in the adoption of EPC and RFID technology.

“With a few major retailers and CPG companies involved in the EPC and RFID standards debate, it’s tempting for smaller and mid-sized companies to sit back and await formal standards,” said Patrick Walsh, director, industry relations, for FMI. “Instead, companies should begin preparing now to adopt that technology. The benefits to the industry are contingent upon the participation of all in global data synchronization (GDS), the EPC and RFID. It is about building an integrated system.”

The action plan outlines a series of immediate actions companies should take to achieve the promise of electronic collaboration, including:

  • Commit to the GDS vision and define a systems plan for implementation
  • Cleanse product data and secure trading partner agreements
  • Adopt enhanced metrics for measuring GDS and include these on the corporate scorecard
  • Form a cross-functional EPC/RFID team to assess the impact to all aspects of operations
  • Develop the EPC business case and pilot programs
  • Create an inventory of existing wireless systems and evaluate for potential interference problems

The full report is available at http://www.gmabrands.com/news/docs/connectthedots.pdf, www.kurtsalmon.com, or www.fmi.org. For more information about “Connect the Dots: Harnessing Collaborative Technologies to Deliver Better Value to Consumers,” contact A.T. Kearney at insight@atkearney.com or KSA at connectthedots@kurtsalmon.com.
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Food Marketing Institute (FMI) conducts programs in research, education, industry relations and public affairs on behalf of its 2,300 member companies — food retailers and wholesalers — in the United States and around the world. FMI’s U.S. members operate approximately 26,000 retail food stores with a combined annual sales volume of $340 billion — three-quarters of all food retail store sales in the United States. FMI’s retail membership is composed of large multi-store chains, regional firms and independent supermarkets. Its international membership includes 200 companies from 60 countries.

Grocery Manufacturers of America (GMA) is the world’s largest association of food, beverage and consumer product companies. Led by a board of 42 Chief Executive Officers, GMA applies legal, scientific and political expertise from its more than 140 member companies to vital public policy issues affecting its membership. The association also leads efforts to increase productivity, efficiency and growth in the food, beverage and consumer products industry. With U.S. sales of more than $500 billion, GMA members employ more than 2.5 million workers in all 50 states.

The National Association of Chain Drug Stores (NACDS) represents the nation's leading retail chain pharmacies and suppliers, helping them better meet the changing needs of their patients and customers. Chain pharmacy operates more than 35,000 pharmacies, employs 120,000 pharmacists, fills more than 2.1 billion prescriptions yearly, and has annual sales of over $500 billion. Other members include more than 1000 suppliers of products and services to the chain drug industry. For more information about NACDS, visit www.nacds.org.

A.T. Kearney (www.atkearney.com) is one of the world's largest management consulting firms. With a global presence that includes more than 60 offices in 37 countries, spanning major and emerging markets, A.T. Kearney provides strategic, operational, organizational and technology consulting and executive search services to the world's leading companies. A.T. Kearney is the high-value management consulting subsidiary of EDS, the premier global outsourcing services company.

Kurt Salmon Associates (KSA) is the premier management consulting firm specializing in retailing, consumer products, and health care. KSA’s portfolio of services helps clients achieve significant gains in the areas of strategy, merchandising, information technology, and logistics. From concept to consumer, KSA achieves lasting improvements for clients in the Americas, Europe, and Asia-Pacific.