Supply Chain Frontiers Issue #26. Read all articles in this issue
The benefits of supply chain collaboration are being captured in Latin America with an electronic catalog called CABASnet. A four-month case study of the service was presented by Bogota, Colombia-based logistics company LOGyCA at the MIT-CTL Crossroads 2008 conference, March 28, 2008, on the MIT campus,.
Crossroads is the MIT Center for Transportation & Logistics’ (MIT-CTL) annual conference that makes the connection between supply chain management and corporate strategy. Raphael Florez, CEO of GS1 Colombia and LOGyCA, and Isabel Agudelo, LOGyCA Consulting Services Director, described how CABASnet is improving supply chain efficiency for the region’s leading retailers and their trading partners.
As Florez explained, the growth of CABASnet underlines how technology can enable supply chain collaboration and create trading networks where companies gather data from diverse sources across the value chain. By reducing waste such collaborative networks also meet a goal that is of increasing importance to companies - making supply chains more environmentally efficient.
CABASnet is an electronic catalog that synchronizes the exchange of point of sale (POS) and inventory information between trading partners on a daily basis. It is being used in seven Latin American countries. In Colombia the catalogue is used by eight of the country's biggest retailers and more than 4000 suppliers with information on 750,000 products. CABASnet is one of 26 global certified data protocols and one of the seven certified on Price Synchronization by Global Data Synchronization Network (GDSN).
The motivation for trading partners to synchronize data is to remove data inaccuracies in transactions and to improve supply chain efficiencies through better control, smoother flows of goods, and reduced costs. Before CABASnet, each supplier visited each retailer to manually explain new products and codify the information. The electronic catalog renders these physical visits unnecessary, thereby reducing new product introduction time from 4-6 weeks down to 2-5 days.
What’s more, trading partners now have access to POS and inventory data on a weekly or daily basis, and large retailers are using it to analyze buying patterns and improve forecasting. LOGyCA is working on refinements to the catalog that will enable small to medium-sized companies to use the data for forecasting purposes as well.
LOGyCA’s four-month case study revealed the following benefits for CABASnet users:
- 9.5% increase on “in-full” deliveries
- 52.2% decrease on CPG product stock-outs.
- 45.3% decrease on apparel stock-outs.
- 9.8% increase on accuracy of purchase order (active product listed in the order).
LOGyCA found that the most important factor for success was creating a collaborative culture within the companies to promote collaboration, explained Florez. He also emphasized how energy scarcity, efficiency, and waste management issues are driving product flows, and how streamlining the supply chain through collaboration can help companies improve their performance in these areas.
A $19 million agreement between MIT-CTL and LOGyCA announced this February created the Center for Latin America Logistics Innovation (CLI). For more information on CLI and CABASnet contact LOGyCA’s head of public relations Maria del Hermida.