September 14, 2018 Opinion piece
Gary Lynch, CEO at GS1 UK, looks at the pressures the retail industry faces today – and explains why industry collaboration is the way forward
At GS1 UK, successful industry collaboration has always underpinned the development and implementation of our standards. Collaboration enables industry to benefit from a single global system of standards. Back in the ‘70s, when the first barcodes were introduced, retailers and suppliers worked together – so they could all reap the rewards. These original pioneers had the foresight to understand that a single way of doing things would not only mean barcodes would be implemented throughout the retail sector quickly, but the financial benefits would be shared by everyone. Today, the same unique GS1 numbers and barcodes are still used – and we couldn’t imagine a world without them.
Over the years we’ve helped industry to develop and implement more standards – different barcodes for different applications within the supply chain, Electronic Data Interchange (EDI) for sharing business messages and now RFID (Radio Frequency Identification), which, after many years of hype, is increasingly being used widely in the apparel sector. None of these developments would have happened if companies had worked in isolation. Industry collaboration was vital to their success.
Today the UK grocery sector is under more pressure than ever. Increased competition from discounters and of course online retailers are driving down costs – but also making customers less loyal. And food shopping habits are changing too – as we increasingly buy less, but more frequently.
Because of this there is a pressing need for the industry to increase efficiency and remove avoidable costs, particularly from the supply chain. But many retailers and manufacturers are often hindered by older legacy systems that lack flexibility – so the problems are difficult to resolve.
This is why we’ve recently bought together a number of leading retailers and brands, to form our new Retail Grocery Advisory Board. The Advisory Board members represent almost 80% of the UK retail grocery market, and includes ASDA, Boots, Coca Cola Enterprises, Co-op Group, Dairy Crest, Kellogg’s, Mondelēz International, Morrison’s, Müller UK & Ireland, Nestlé, Ocado, PepsiCo, P&G, Sainsbury's, Tesco, Unilever and Waitrose.
Together, through collaboration, they will help us develop industry-wide solutions that will help everyone provide a better customer experience – while delivering the all-important efficiencies and cost savings throughout the supply chain. One of the first programmes the Advisory Board is working on is called the Perfect Order. This is focusing on the order-to-cash process, establishing industry-wide harmonised processes for inbound logistics to drive efficiencies and remove avoidable costs. Only by collaborating and driving the consistent use of GS1 standards will these companies achieve the cost savings they need.
Of course, collaboration can only go so far. We understand that there are many areas where retailers and suppliers will and must always compete: the products they sell, the price they charge, and the experience they provide to us, their customers. But our history shows the importance of collaboration – and I’m pleased that today we’re still finding new ways to work with industry.
Personally, I’m never happier than when I see competing companies – from both the demand and supply-sides of the industry – meeting in our offices, openly discussing how they can work together for the benefit of the whole industry. It’s what we’ve been doing for over 40 years – and what we’ll continue to do.
More about our industry Advisory Boards
How GS1 UK provides the foundation for effective retail operations