LANSA Likes Its Chances as GS1 Item Alignment, GDSN Initiatives Advance
January 29, 2010 Alex Woodie
By the end of March, most Wal-Mart suppliers will be required to start participating in GS1-based item alignment, sending Wal-Mart product information via the Global Data Synchronization Network (GDSN). This initiative to improve supply chain efficiency, along with the significant advances for GS1-based Item alignment in the healthcare and food service industries, is good news for LANSA, which has established a comfortable niche in the market for GS1-1SYNC-GDSN item alignment software, with more than 300 installations of its LANSA Data Sync Direct product, according to company officials. But for LANSA, the retail supply chain is just the beginning of its GDSN goals.
Wal-Mart, which has been working on its GS1 Item Alignment via GDSN initiative for years, issued a letter in December 2009, requiring suppliers to pick a GDSN data pool by the end of January 2010, and to start sending them accurate product data via a GDSN-certified data pool by March 1, 2010. All new product data–which describes everything from the size and weight of a specific product or pallet of products, to its country of origin and expiration date, among other pieces of information–must be sent to Wal-Mart via the GDSN starting immediately.
The letter, which you can read here, was signed by Wal-Mart’s vice president of replenishment.
The opportunities are clear to Jeff Holzman, LANSA’s director of solution product sales, who has helped many companies adopt data synchronization. “It’s now moved beyond the IT department,” Holzman says. “It used to be IT driving GDSN, but now it’s business executives.
Poor Data Costs Billions
The push to a product data standard started nearly a decade ago, when researchers found billions of dollars per year were being wasted in various supply chains as the result of poor product data quality. The bad data materializes in the form of empty shelves at supermarkets and fights between retailers and suppliers over the inevitable charge-backs that happen when invoice line items don’t match the actual items in a pallet of goods.
What’s more, the famous A.T. Kearney study focused on improving profitability through expanding trading partner electronic collaboration found that without a solid core of good product data to build on, it’s nearly impossible to successfully implement more advanced supply chain techniques and technologies, such as collaborative planning, forecasting, and replenishment (CPFR) and radio frequency identification (RFID).
The solution to bad product data is the implementation of GS1 standards for defining trade items and participants in the supply chain, the data that represent these, and the processes and messages that communicate them via GDSN certified data pools. With GS1-based item alignment good product data can be quickly shared through the process of exchanging details about products represented by global trade item numbers (GTINs) by organizations, which are represented in the system by global location numbers (GLNs) via GDSN certified data pools which use GS1 standardized processes and messages.
Each industry, including consumer packaged goods, grocery, hardlines, entertainment, healthcare, foodservice and alcohol beverages, has unique business and data attribute requirements. These requirements are created in a standardized way for each industry segment via the Global Standards Management Process. Requirements from the GSMP are worked into the standardized GTIN definition and messaging that is communicated via the GDSN. The GSMP and GDSN are controlled by GS1 standards organization that was formed in 2005 by the combination of the North American UCC group and its European equivalent, the EAN.
LANSA recognized the opportunity with GDSN at an early stage, quickly jumped on the bandwagon, and hasn’t let up since, Holzman says. The result is that LANSA has more than 300 installations of LANSA Data Sync Direct, the piece of software that sits between the product data master in an ERP system and the GDSN, since the i/OS- or Windows-based product debuted about six years ago.
Good Times at the GDSN
“We continue to be the leading GDSN solution in the world,” Holzman says. “LANSA always strives to be the first one certified for new releases and to include new GDSN capabilities. We have the best functionally. We have the most references. We believe we have three to four times as many ERP integrated installs as anybody else. We are the only 1SYNC, GDSN price-sync certified solution.”
While vendors are typically inclined to speak highly of their own products, evidence of LANSA’s domination of the GDSN marketplace can be found in the fact that Oracle chose to partner with LANSA as the GDSN extension to the ORACLE PIM. ERP vendor QAD has a similar deal with LANSA, and there are other major ERP vendor deals in the works, Holzman says.
“I don’t believe any of the ERP vendors have found GDSN solutions to be a very profitable business” Holzman says. “It’s a difficult and expensive task to stay certified. Due to changing business requirements, the messaging and the attributes change quite often. It can cost millions of dollars to keep them in sync, and they don’t have enough customers to make it worth their while. They’re starting to say, ‘This is just a burden to us.'”
It’s not a burden to LANSA, which has 20 to 30 employees working in the GDSN business, dedicated to maintaining full GDSN compliance with the Data Sync Direct product, and selling and installing the software at customer sites. And the potential market continues to expand, not only with Wal-Mart ratcheting up its compliance program, but through entirely new industries.
So far, most of the GDSN activity has concentrated on four industries: food, consumer packaged goods, including fast moving consumer goods, hardlines and alcohol beverages. There is still a long way to go before all product data is standardized. Wal-Mart, for example, went from 50 percent of its items being registered in the GDSN in 2008 to 68 percent last year. Holzman says efforts are well under way at GS1 to drive product data standardization into two additional industries: healthcare products and food service.
Getting the healthcare products industry onto GS1-based item alignment via GDSN will be a challenge due to the complex nature of the industry, many participants, multiple product numbering schemes, and a four tier supply chain. But the potential benefits to all participants are huge, Holzman says. The GDSN effort here will seek to standardize product data for most non-prescription items flowing through hospitals, clinics, and doctor’s offices.
The pain in the healthcare products industry is immense, Holzman says. “In the healthcare industry, many of the end consumers (hospitals, etc.) belong to a group purchasing organization, which sets contract pricing. They’ll have many different numbers for the same product, so it is difficult for them to figure out what they need to buy to best serve their business and customer needs. When you’re talking about the items needed to properly care for patients, and do it in a cost efficient manner, this is a problem that is in everyone’s best interest to solve.”
There are both business process and technical complexities to getting started with GS1 GDSN-based Item Alignment. But for LANSA, simplifying these complexities and helping companies realize the benefits of GDSN translate into an excellent business opportunity.
Note: This article has been revised from its original content based on elaboration provided by LANSA.