Beyond the Label: Consumers Want More Product Information
Since the first barcode was scanned in 1974, supply chain standards have led to huge savings for the consumer goods industry, allowing more efficient flows of goods and information. But, today’s consumers, empowered by social and mobile technologies, now want the ability to scan barcodes to obtain “beyond the label” data such as product origin, ingredients and manufacturing working conditions.
Their demands have merit of course. Ever since news broke in Europe about horsemeat showing up in packaged foods labeled as beef supplied by Walmart, Burger King, and even Ikea, even more attention has been drawn to the need for more transparent, accurate product information — requiring corporate processes and industry standards to evolve.
“Standards have a fascinating past and an exciting future. On the one hand, they are foundational to the way we do business, driving down the cost of our operations. On the other hand, they are helping us to get closer to our consumers and meet their ever-changing needs, particularly in the digital world,” says Mike McNamara, chief information officer, Tesco.
A new report from Capgemini Consulting, titled “The Future of Standards in the Consumer Goods & Retail Industry”, explores the implications that wider adoption of standards could have on supply chain efficiency and meeting new consumer needs.
The report is based on in-depth interviews with leaders in supply chain and IT functions of 20 global consumer goods manufacturers and retailers worldwide, across Europe, Asia and North America, including Johnson & Johnson, Nestl, Tesco, Unilever and Walmart. Findings include:
•- 100% of executives who participated in the study indicated that changes in consumer behavior would have the greatest impact on the industry’s supply chain in the coming decade.
•70% called for wider standards adoption across the value chain.?
•50% are calling on GS1 to take a global governance role to support implementation and adoption priorities.
The results of the study also showed that there are numerous challenges regarding standards faced by the industry, including:
1.Underuse of standards, particularly among SMBs: Compared to large companies, small and medium enterprises have significantly lower rates of standards use, with manual processing frequently the norm. Standards need to be extended to new channels such as e-commerce and affiliated transportation and logistics parties.
2.Ensuring Data Quality: Data available through product barcodes is often missing or inaccurate and is not provided in a standardized way across multiple channels.
3.Promotions are Problematic: They are necessary for sales growth but difficult to forecast demand as retailers are often unwilling to share promotional strategies.
4.Big Data is a Bear: With the challenge of Big Data, retailers and manufacturers find it difficult to respect standards that require barcode numbers to change every time a product is slightly altered.
5.Sustainability Soars: There is increasing scarcity of natural resources but also rising consumer interest in sustainable business — creating the demand for more accurate and consistent information on carbon footprint, water usage, recycling and energy consumption.
“The Capgemini research sheds light on an important issue: as an industry we need to put more work into making sure standards are well-adopted throughout our business networks,” explained Jos Lopez, executive vice president, Operations & GLOBE, Nestl.
Click here to download “The Future of Standards in the Consumer Goods & Retail Industry”.
Their demands have merit of course. Ever since news broke in Europe about horsemeat showing up in packaged foods labeled as beef supplied by Walmart, Burger King, and even Ikea, even more attention has been drawn to the need for more transparent, accurate product information — requiring corporate processes and industry standards to evolve.
“Standards have a fascinating past and an exciting future. On the one hand, they are foundational to the way we do business, driving down the cost of our operations. On the other hand, they are helping us to get closer to our consumers and meet their ever-changing needs, particularly in the digital world,” says Mike McNamara, chief information officer, Tesco.
A new report from Capgemini Consulting, titled “The Future of Standards in the Consumer Goods & Retail Industry”, explores the implications that wider adoption of standards could have on supply chain efficiency and meeting new consumer needs.
The report is based on in-depth interviews with leaders in supply chain and IT functions of 20 global consumer goods manufacturers and retailers worldwide, across Europe, Asia and North America, including Johnson & Johnson, Nestl, Tesco, Unilever and Walmart. Findings include:
•- 100% of executives who participated in the study indicated that changes in consumer behavior would have the greatest impact on the industry’s supply chain in the coming decade.
•70% called for wider standards adoption across the value chain.?
•50% are calling on GS1 to take a global governance role to support implementation and adoption priorities.
The results of the study also showed that there are numerous challenges regarding standards faced by the industry, including:
1.Underuse of standards, particularly among SMBs: Compared to large companies, small and medium enterprises have significantly lower rates of standards use, with manual processing frequently the norm. Standards need to be extended to new channels such as e-commerce and affiliated transportation and logistics parties.
2.Ensuring Data Quality: Data available through product barcodes is often missing or inaccurate and is not provided in a standardized way across multiple channels.
3.Promotions are Problematic: They are necessary for sales growth but difficult to forecast demand as retailers are often unwilling to share promotional strategies.
4.Big Data is a Bear: With the challenge of Big Data, retailers and manufacturers find it difficult to respect standards that require barcode numbers to change every time a product is slightly altered.
5.Sustainability Soars: There is increasing scarcity of natural resources but also rising consumer interest in sustainable business — creating the demand for more accurate and consistent information on carbon footprint, water usage, recycling and energy consumption.
“The Capgemini research sheds light on an important issue: as an industry we need to put more work into making sure standards are well-adopted throughout our business networks,” explained Jos Lopez, executive vice president, Operations & GLOBE, Nestl.
Click here to download “The Future of Standards in the Consumer Goods & Retail Industry”.