FMCG industry benefits from electronic commerce

Lynne Stewart, Manager of GS1 South Africa, part of a global body which promotes a worldwide multi-sector system for identifying goods, services and locations, comments on how advances in technology are introducing new standards of efficiency, productivity, accuracy and improved consumer service into the Fast Moving Consumer Goods Industry (FMCG).

"A number of initiatives are being implemented in an increasingly integrated fashion to speed up the supply chain, automate identification of products according to global standards, ensure complete accuracy and visibility of such items at any point in the supply chain itself, and provide data which is vital to all stakeholders along that chain to ensure that the goods they supply meet consumer requirements at any point in time."

GS1 is promoting implementation of the EPCglobal network, a set of technologies which allows immediate and automatic identification and sharing of information on items in the supply chain.

The EPC (Electronic Product Code) itself is a unique number which identifies specific items using radio identification technology (RFID). The RFID tag communicates this number to a reader which passes it on to a computer: "There are countless advantages to this system. First it enables companies to see how, when and where their products move within the supply chain, enabling them to improve efficiencies. It will help speed up product recalls, lower product costs and significantly reduce theft as well as decrease opportunities for counterfeit items to be introduced."

Technologies such as bar coding and RFID also enable wholesalers and retailers to keep accurate records of goods and products sold at point-of-sale stations. This data is stored in data warehouses and analysed to provide a precise understanding of consumer needs: "Clearly this has a positive impact on the quantities, numbers and type of goods which need to be stored, helping to reduce the costs of storage too."

A concomitant development is the creation of the Product Data Catalogue (PDC.za), an initiative managed by the Consumer Goods Council of South Africa (CGCSA)

Chris Havenga, PDC & IT manager of the CGCSA explains that the PDC.za enables brand owners, manufacturers, suppliers, agents, wholesalers and importers to publish and update their product data to the retail trade on a central master database: "The information is used as master data which suppliers and retailers can use for their own internal systems."

Among benefits for suppliers are reduction in costs and cycle times, with orders and invoices containing valid data. Retailers benefit from accurate industry standard dimensions and measurements, and can rely on a single set of clean data for e-commerce.