{mosimage}ID: IFDA’s Supplier Advisory Council and the IFDA IT Committee are currently involved in collaborative project involving complete and accurate data between trading partners. Could you tell our readers more about what this group is doing, and why?
Steve Potter: These are challenging times for our industry. Record-level fuel and energy costs, steady increases in operating expenses and cost of goods, and slowdowns in consumer spending are all having a big impact on our members and on our supply chain. Distributors are closely reviewing their processes to identify inefficiencies and unnecessary costs. For many, this exercise has confirmed the fact that the foodservice supply chain is multidimensional – the action of one trading partner has a direct impact on other trading partners within that supply chain. In other words, trading partners cannot function in a vacuum; they need to work together to address problems that impact each other.
IFDA’s combined membership purchases and sells billions of cases of product annually. In order for this to be done efficiently, those cases have to be received accurately, placed into inventory accurately, put into correctly sized slots in the warehouse, located accurately, selected accurately, loaded onto appropriately sized delivery trucks, and delivered to the right customers, at the right time, at the right price. This necessary level of efficiency and transactional control cannot be attained without complete and accurate data; any slip-up in the process creates issues for other parties within the supply chain.
Using the previous example, it is not just the distributor that incurs additional costs. If a manufacturer does not ship the correct product or the correct amount of a product to a distributor, that manufacturer incurs unnecessary expense – the transportation cost to bring the product back to the plant, warehousing costs to receive and put that product back into inventory, administrative costs to adjust inventory and create a credit, regeneration of an order, reshipment costs, re-invoicing costs, and lost sales. Manufacturers realize that these inefficiencies are costing them hundreds of millions of dollars a year and they recognize that particularly in these economic times, something needs to be done to remove impediments that affect the accurate flow of products and transactions through the supply chain. These impediments are negatively impacting trading partners and the only way the situation will be improved is by working together.
ID: Who is involved in this project?
Potter: The group is comprised of executives from our tiered partner companies, from the IFDA Board, and from member companies. We will have 27 participants at our April 23 meeting – representatives from Kraft Foodservice, Campbell Soup Co., Rich Products, Ventura Foods, Ecolab, Inc., General Mills Bakeries and Foodservice, Hormel Foods Corporation, Kellogg’s Food-Away-From-Home, Land O’Lakes, the P&G Distributing Co., Ben E. Keith, Dot Foods, Food Services of America, Martin Bros. Distributing Co., Monarch Foods, Pate Dawson Co., Performance Food Group, Sysco Corp., Nicholas & Co., UniPro Foodservice, Inc., and U.S. Foodservice. Representatives from GS1 US and International Foodservice Manufacturers Association will also be participating.
ID: How are IFDA and IFMA working together to move this initiative forward?
Potter: The initiative is aimed at driving broad adoption of a single standard and a common format between trading partners within the foodservice supply chain. The information flow starts with the manufacturer. If that information is incomplete or inaccurate, if the bar codes on the cases are not readable, if the data encoded in the bar codes does not match the information in the master data file, inefficiencies and errors are created.
IFDA and IFMA will be working together to create awareness that today’s business environment is not the same as it was a few years ago: consumers are demanding more information, such as nutritional contents and allergens; trade has become more global, with products coming into the country from all over the world; recalls are highly publicized and becoming far more frequent; traceability is taking on a new meaning; contract business has grown, increasing the complexity of business transactions; and food safety is on everyone’s mind. The volume of data has grown and will continue to grow as consumers demand more information. The industry needs to be prepared to handle these demands and in order to do so it must have product and transactional information that is complete or accurate.
We’re serious about collaboration. A representative from IFMA attended and provided a manufacturer overview at the last IFDA Supplier Advisory Council and IT Committee meeting. A representative from IFMA will be attending our next meeting in Orlando. I have spoken at a couple of industry events recently with Doug Smith and Chris Fabbri from IFMA on the importance of working together to solve common problems. Doug and I will be speaking at the upcoming UC Connect Conference, and we have invited Doug to attend the IFDA Sales & Marketing Conference in July to discuss clean and accurate data between trading partners and the importance of utilizing a single data standard to remove complexities and unnecessary costs from the supply chain. IFDA and IFMA are also participating in the GS1 US Foodservice Committee which is focusing on the use of GTINs, GLNs throughout the industry; this group is using the Supplier Advisory Council’s findings for guidance
ID: What will the focus be at the April 23 Supplier Advisory Council meeting?
Potter: When the group began discussing “pain points” it became clear that there were serious inconsistencies related to the use of the data elements in Standard Product Identification. Based on distributor testimonials, 85-90% of inbound loads currently have errors:
Product descriptions on invoices do not match descriptions on the cases;
Product descriptions on the case do not match descriptions on the product inside the case;
Cube information is either missing or inaccurate;
Only 85% of products received (excluding produce) have bar codes; and of these, only 75% are readable;
Price maintenance is a constant problem;
Pack sizes are changed without notification;
Character fields and number fields are often mixed; and more
It was recognized very early that if there are inaccuracies in bar codes and/or their related information in master data files, it has a trickle effect throughout the supply chain.
The group decided that the first step should start with product data elements. Copies of the IFDA Standard Data Format and the GDSN Food and Beverage Extension have been reviewed by manufacturers and distributors to identify which data elements each group believes should be mandatory and optional. The results of this exercise will be reviewed at the April 23 meeting to develop agreed-upon core data elements that must be complete and accurate when transferred to trading partners.
As the group moves through the process, business cases will need to be developed to create industry awareness as to why change is necessary, and a roadmap will need to be developed to identify implementation steps. A key word in this is “industry” because it needs to be industry-driven, not company-driven, and that is why collaboration between trading partners is so important.
For more information on the foodservice distribution industry’s usage of GS 1 standards contact Steve Potter at IFDA.
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