Most manufacturers and retailers participate in a tangled web that supports the flow of data. There is no one database for all product information within a single company—let alone across a supply chain. And there are few controls in place within most companies concerning who can create and/or modify product data.
As a result, manufacturers may have different descriptions and pricing information about the same product, accessed by both internal departments and external suppliers and customers.
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Many manufacturers are working on product information management (PIM) and global data synchronization (GDS), to ensure that product data shared within an enterprise and with supply chain partners is accurate and up-to-date. But GDS and PIM are often done in isolation from one another and are therefore ineffective. Thus, billions of dollars in sales are lost every year due to incorrect prices or erroneous item numbers exchanged by trading partners.
The inaccurate exchange of data also delays time-to-market, and slows new product introductions and product changes. And multiple versions of product data can lead to inaccurate orders, which can compromise customer service levels and lead to costly remittance processing.
The problem of bad data will become larger and more evident as EPC RFID adoption becomes more widespread and companies automate more processes. A single EPC could be associated with different product information in different databases, and automated processes will mean companies will be sharing more bad data more quickly. That will result in higher transaction costs because companies will need to increase manual efforts to correct orders and invoices, and to return products shipped erroneously.
Companies need to view these three technologies as interrelated: EPC RFID for timely, accurate information gathering; GDS for reliable and timely sharing of product attributes with trading partners; and PIM as the foundation for master data synchronization to set up and change product attributes behind a company’s firewall.
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The first step to see if convergence of EPC, GDS and PIM will create gains is to understand how data is represented in existing processes and systems. Companies need to examine the processes and tools that manage product data stored behind their firewall and exchanged with trading partners.
Once PIM systems and procedures are created, product data recorded in the PIM database is linked to EPCs via Global Trade Identification Numbers. Then companies need to develop pilots to build an efficient product information capability that enables them to feed clean data to GDS data pools for trading-partner synchronization.
Introducing proper PIM and GDS systems is a prerequisite to achieving the benefits that come with sharing EPC data across the value chain. Global corporations with multiple product databases and high volumes of promotions and price changes should see a significant return on investment. But even smaller companies can benefit from improving their operations today while preparing for the highly automated world of tomorrow.
Marco Ziegler is a partner at Accenture, a global management consulting and technology services company.