The Hindu Business Line : Retailers plan pilot project for inventory tracking

RETAILERS and FMCG companies, under the aegis of ECR India, are launching a pilot project that will help them implement Global Data Synchronisation Services, an electronic system that collates and pools manufacturing and inventory information which is made available to local players.

According to Mr Ravi Mathur, CEO, EAN India, out-of-stock and excess stock represent two difficult issues for retailers. AC Nielsen has been commissioned by the ECR Committee to assess the occurrence of `out-of-stock' across select participating retailing chains in India. He added that there were more than 30 companies participating in the meet, representing 75-80 per cent of the products being sold in India.

Mr Malcolm Bowden, Sales Director, Global Exchange Services, UK, said that the system's implementation in India could see product prices fall; lower process and delivery time by as much as "10 to 12 weeks" for local players; and, substantially improve service to customers.

According to Mr K. Radhakrishnan, Vice-President, Merchandising, Foodworld Supermarkets, several years ago 40 per cent of the data from manufacturers and retailers were a mismatch, which led to inefficiency in the supply process. This `mismatch' has now been reduced to below 15 per cent in Foodworld. He said that implementing the GDSS system would reduce these inefficiencies and the cost involved.

Mr Narendra Ambwani, Managing Director, Johnson & Johnson, said: "By improving information accuracy, companies will be able to reduce costs and improve the efficiency and performance of their business processes, such as inventory management and replenishment, order reconciliation, and new product introductions. In the US alone, it costs $60-70 as administrative costs for correcting each wrong dispatch or order."

Mr Mathur said that the system is affordable and payback could happen in less than a year. The data will be available to members and the cost spread across companies, depending on the size of the company.

He said that India represented a unique situation because only organised retail represented 2 per cent of the market. However, in terms of compliance, the country was faring well — from less than 10 per cent in 1999, more than 75 per cent of the retail sector now carries EAN barcodes on products.

Come 2006, the retail industry is also hoping to implement EAN coding for all products, which will augur well for the sector's growth.

Globally, retailers such as Wal-Mart, Home Depot and Carrefour have begun asking suppliers to start submitting product data using GDSS specifications and Indian exporters are likely to be asked to abide by these directives.

The ECR (Efficient Consumer Response) India meet had companies such as Johnson & Johnson, Hindustan Lever, Procter & Gamble, Nestle, Pepsi Foods, Canteen Stores, FoodWorld, Big Bazaar, Pantaloon, Nilgiris and Retailers Association of India participating.

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