Data inconsistency between the UK’s top five retailers and their suppliers is costing as much as one per cent of revenue or £1.4 billion per year, according to a whitepaper released this week by LCP Consulting. This clashes with a recent report from GS1 UK and Cranfield School of Management, which placed an estimate for a narrower scope at £200 million per year.

The whitepaper has been prepared by LCP Consulting for joint publication with Zetes. It was co-authored by Professor Alan Braithwaite, chairman of LCP Consulting and visiting professor at Cranfield School of Management and Professor Richard Wilding from the Centre for Logistics and Supply Chain Management at Cranfield School of Management. It applied six sigma statistics to the results from GS1 and found that the retailer data showed a high level of inaccuracy - 29,000 times worse than six sigma and suggesting that one in every 10 data elements were incorrect.

Braithwaite comments: “From our experience of working with many companies, data accuracy is poor with errors in physical dimensions, pricings and operational parameters such as shelf fill, replenishment quantities and order quantities. As this report shows there is a big opportunity cost hidden behind this problem. Companies need to take a fresh look at their master data management processes alongside their data identification and capture methods; the business cases from investing in both identification and processes may be bigger than they expect. This backroom stuff is crucial.”

Wilding adds: “The reported levels of inaccuracy and their associated costs are worrying. This is especially the case in the context of the enormous investments that all the big retailers have made in product identification, data capture and supply chain integration, and the focus that many companies have put into lean and six sigma methods.”

To view a copy of the whitepaper, Understanding the true costs and benefits of data accuracy, visit: www.lcpconsulting.com

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