The big five retailers are wasting £1.4bn a year, seven times more than initially feared, because their data is not being recorded properly, according to a new report.
Supermarkets may pride themselves on having efficient supply networks, but the report found that one in 10 pieces of data recorded by the big retailers was wrong, causing significant problems in their supply chains and costing the equivalent of up to 1% of their turnover.
The bad data led to lost sales through a lack of availability, wastage created by over-stocking and the cost of adjusting data entered incorrectly, the report said. The study by supply chain specialists LCP Consulting and Zetes, was based on data originally published by GS1 UK, which found the problem was costing the industry £1bn over five years.
However, the new report examined the data again and found the problems entailed a far greater cost than previously estimated.
"In times when there is not a lot of inflation in the market and retailers are fighting harder than ever for market share, making efficiencies in the supply chain is even more important than ever," said Professor Alan Braithwaite, chairman of LCP and co-author of the paper.
"There is a big financial opportunity hidden behind this problem. Companies need to take a fresh look at their data management."
The report called for retailers and suppliers to invest in their supply chains.
Read more
Sainsbury’s says IT system will help it weather the storms (5 June 2010)
How M&S will bring order to the chaos of its supply system (31 October 2009)
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