23 March 2000 | Elizabeth Bellamy
UK retailers with worldwide trading interests must improve the accuracy of the data they exchange with suppliers for e-commerce to succeed, an industry group has claimed.
Peter Jordan, systems director at Kraft European and board member of industry body Global Commerce Initiative (GCI), said that companies should learn from incompatibility problems with electronic data interchange (EDI) before embracing web-based systems.
The GCI, which has a membership of 50 international retailers and manufacturers, was set up last year to examine issues surrounding EDI, product identification and intelligence tagging.
"The problems began when retailers started to source goods globally and manufacturers began producing for the whole world," said Jordan, speaking at the GE Information Services EC Forum 2000 in Orlando, Florida, this month.
This trend, which started four years ago, has seen a rising number of different EDI systems used by retailers and suppliers. They were often incompatible and created excess stock levels of up to 30 per cent. Customer satisfaction had also suffered as product availability was affected, he said.
Jordan explained that companies need to address these issues and not be dazzled by e-commerce's "sexiness". He added: "It's still a problem that, whatever you do in e-commerce, the end product has to be moved."
Colin Billinge, president of the E-Commerce Council in Canada and retail supply chain global leader at GE Information Services, said a "lack of leadership" within the retail sector had left it lagging behind other areas.
Barry Knichel, supply chain development director at Tesco Stores, said that, while the sector had recognised the need to improve, it was doing so for different reasons. "There are those who want to change and there are those who have to, or they will be left behind."
Knichel urged caution to firms introducing web-based systems. Companies felt obliged to implement e-commerce, and weren't "looking at its potential", he said.
He added that, too often, applications were being put on to the market without people checking if they worked.
The situation was similar in the US, said Tom Schaumberg, vice-president of supply chain initiatives at food retailer Ahold North America. He said there were more than 200 versions of XML (a web-based computer language) on the market and, if the retail sector did not establish trading standards, the costs would be passed to suppliers.