The Impact of Bad Data on Profits and Consumer Service in the Australian Grocery Industry
In a report for the retail grocery industry prepared by GS1 Australia in conjunction with IBM and supported by AFGC and ECRA the data from three leading Australian retailers and four key suppliers was crunched.
The study suggests retailers are working with data that is inconsistent well over 80% of the time and the estimated cost of bad data is $1.035 billion over the next five years. Bad data has a severe impact on the industry in three main areas:
- Cost of manual workarounds to source missing data and correct errors 4%
- Administrative shrinkage costs in areas such as ordering and invoicing 31%
- Lost consumer sales through shelf stock outs 65%
The report highlights a number of data fields where error rates are problematic; draws conclusions on current industry work around practices; and most importantly delivers a call to action for the industry to adopt the Data Quality Framework (DQF).
The report supports an industry call to action to:
- Review the GS1 Data Quality Framework and employ it throughout your business.
- Develop capabilities to check and publish master data though GS1net and using tolls available from GS1net certified partners.
- Work off a single repository that feeds all sales channels.
- Ensure proper security and governance as set out in the DQF.
The DQF can be downloaded from the GS1 website here.