Data Intelligence: 2005: Lessons Learned, Forgotten and Resurrected

Dec. 1, 2005
"The state of communications between customers and suppliers in the retail sector remains abysmal."

When the editor told me I'd have the opportunity for this column to be the "last word" in 2005, dozens of possible topics immediately came to mind. Then I saw the news release from Target and Wal-Mart announcing that they would begin sharing radio frequency identification (RFID) data with 13 suppliers.

It became immediately clear what this column should address, "What have we learned?" The answer? "Apparently nothing."

The announcement that these two major retailers would begin sharing RFID data with selected suppliers has been heralded as a major step in advancing the cause of EPC and RFID in the supply chain. Stop and think about this for a moment. The idea is that retailers could share sales and inventory data with their upstream trading partners to streamline the supply chain. There's something familiar about that.

Weren't we supposed to be doing that with bar code data? Wasn't the great promise of using bar codes on pallets, shipping containers and point-of-sale items to gather and share data more efficiently, quickly and even automatically?

Way back in the 20th century—in the 1980s—the Voluntary Interindustry Communications Standards (VICS) group was formed in order to provide accurate and timely collection and sharing of data in the retail/textile/apparel sector. This was particularly critical because a fashion-selling season lasts only eight weeks. Typically, a retailer could hope for only one reorder of clothing each "season." That meant a lot of unsold (i.e., not popular) items at the retail level and possibly a large inventory of unordered textiles that had been produced on speculation in an attempt to judge consumers' fashion preferences.

The idea behind the VICS standard was for retailers to send sales and inventory data upstream to the apparel manufacturers that would, in turn, share it with textile and other suppliers to provide an immediate window into the popularity of a particular style of clothing. This information would allow upstream partners to reduce their speculative inventories while ensuring downstream partners adequate supplies of hot items. The VICS bar code standard, which eventually included manufacturers of notions and findings (threads, fasteners, trim, etc.) was developed to permit two or even three reorders and to reduce the amount of unordered or unsold goods in the supply chain.

Does this sound familiar? Isn't that what we want RFID to do at some point in the future?

So, the nagging question about 2005 is this, "Are we reinventing the wheel here or are we just putting the same old flat tire on a shiny new wheel?" The point to be taken from the Wal-Mart and Target announcement is that the state of communications between customers and suppliers in the retail sector remains abysmal. At least, it seems to be that way.

To be fair, some industry sectors have implemented successful data exchange and established effective just-in-time manufacturing and fulfillment. It hasn't been easy and it hasn't been painless. But it has paid significant dividends to those sectors that have implemented "modern" data collection and exchange programs.

Admittedly, in the 1980s when VICS and other industry standards were created, electronic data interchange (EDI) was a complex and cumbersome process. Data synchronization among trading partners was only beginning and IT systems were typically stovepipe applications that could not easily share data.

However, with the advent of the Internet and web-based tools such as XML in the 90s, the process should have been greatly simplified. Perhaps companies did not take advantage of these tools because of Y2K issues. Nonetheless, it has been a quarter of a century since the effective rollout of the original U.P.C. symbol and retail data collection.

Something else we learned back in the 20th century was that those companies that used bar codes internally not only gained production and economic benefits, they also produced the most readable symbols for their customers. Those that only printed bar codes at the shipping dock often produced a bunch of lines that only kind of looked like bar codes. The same is true with RFID.

If we have learned anything from the experiences of some major companies in 2005, it is that we have learned virtually nothing in the past 25 years. Let's hope that 2006 will be the year we fix the flat tire and actually begin to really use the data collection and data exchange technologies we already have and not just focus on the shiny new ones.

Best wishes for a Joyous Holiday Season and a prosperous and communications-filled New Year.

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