Avoiding Another Tower of Babel

Dec. 1, 2002
Developing standards for data communications is good for business. But will your company cooperate?

What do PLCs, software operating systems, communication networks and power plugs have in common? Answer: The official process to develop standards for them has been agonizingly slow and, for the most part, unproductive. It’s taken years for some of these products to be plug-and-play easy to connect to. (In some cases, the effort to achieve this goal continues.)

We all know standards are a good idea. But industry track records don’t offer much hope that future processes will be easier. We will find out if we’ve learned anything from past attempts with the next opportunity — the Global Commerce Initiative (GCI). This advisory group is working on voluntary data standards for business. According to its studies, sharing common data among manufacturers and retailers could positively affect a company’s bottom line by 10 percent to 15 percent. Just by synchronizing basic data, supply chains could save at least 3 percent, says one of the reports.

And the benefits continue. When companies use the same format for basic data like item and party information, then “you can effectively talk about better managing working capital and decreasing time to market,” said Zygmunt Mierdorf, member of the Management Board of Metro and of the GCI Global Steering Group.

The question is, will executives buy into one standard? Or will executives do what they’ve done before, which is to put their company’s interests first and their industry’s interests last?

The results of taking the latter path should be obvious to all in any industry. It leads to the use of a multitude of standards that are not truly interoperable. (How many industrial networks can you name for example? Here are a few: Profibus, Modbus, Interbus, DeviceNet, ASI, Ethernet.)

If executives and decision-makers put their industry’s interests first, we could have interoperable standards in months. For example, according to the business report on the case for global standards (prepared to convince executives of the merits of this idea), implementation of Global Trade Item Number (GTIN), Global Location Number (GLN) and Global Data Synchronization (GDS) standards will reduce inefficiencies in the supply chain. The results will be quantifiable benefits in catalog maintenance, category and promotions management, order management, order fulfillment and corporate management. Implementation of these standards will improve sales performance by decreasing time-to-market and out-of-stocks.

These benefits are just what executives are looking for, so they say. However, cost, market share, competition, ego and just plain resistance to change are the obstacles executives must overcome. Otherwise, the standards task is left to the users of various products and systems to determine, usually through the de facto route.

Just for the record, the editors of Material Handling Management are not advocating a specific standard. We are, however, advocating that some standard be agreed upon and implemented as soon as possible.

Isn’t it time executives and decision-makers re-oriented their perceptions about the bottom line? Standards help individual companies as well as an industry. Lack of standards costs everyone — in time, in productivity and in capital.

Let’s learn from the past, instead of repeating the same old mistakes.

Leslie Langnau, senior technical editor, [email protected]

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