Spotlight Article: Manufacturer/Distributor Study Reveals Distributor Data Requirements and Manufact

By: Denise Keating, President, DATAgility and Angela Baraks, Director Data Sync Services, DATAgility

Poor Quality Data is often a silent gas guzzler, leaking precious profits and reducing operating efficiencies. But because no one complains too much about it, it is often ignored. Distributors have demanded high quality data in the past, but no one really understood the data requirements. Shortly after the 2008 IDEA E-Biz Forum, IDEA commissioned DATAgility to conduct a study to clarify the data requirements of distributors and gather information on what is important to them collectively. The study also assessed manufacturers to find out exactly what data they can provide distributors today and what is on the horizon for the future.

Background of the Study

Eighteen distributors and sixteen manufacturers participated in the study. The sample represented IDEA customers from various company sizes, structures and geographic regions. The manufacturers also represented the key business segments of the electrical industry including: electrical systems, lighting & lamps tools, and power generation.

Each distributor participant filled out a questionnaire about the data requirements they need to run their various business systems including procurement and web selling environments. Distributors could select from the following criteria: Mandatory, Helpful, Future or Do Not Need.

Manufacturer participants were given a similar questionnaire with the data fields listed and could select from the following criteria: Available, Not Available or Future Enhancement. “Available” is defined as data that is readily accessible within their current system to retrieve and send to Industry Data Warehouse (IDW).

Distributors and manufacturers were interviewed to elaborate on the questionnaire and shared further details about requirements and capabilities.

Key Findings from the Study

What distributors need:

The distributors said it’s time for manufacturers to expand their data beyond transactional fields and begin providing marketing data to drive web selling and counters sales. All distributor participants strongly stated the following data is required to drive sales growth in 2010 and beyond:

1. The United Nations Standard Products and Services Code® (UNSPSC) is more granular than the traditional legacy codes, and distributors will use it as their primary taxonomy
2. Product Descriptions must be meaningful and fit into the distributor’s purchasing and selling systems
3. Uniform attributes need to be applied to each product category (UNSPSC)
4. Images need to be supplied for all web oriented products

The study revealed that the top 75% of fields required by distributors are transactional data fields needed to run their business systems. In a cross analysis between the distributor requirements and the manufacturer fulfillment, it was evident that the majority of manufacturers are providing the required transactional data, but the perception of the distributors is that the quality of the data does not meet their needs. Quality data consists of measurable factors including: accurate, consistent, timely, complete, easy-to-use, standardized and synchronized. One distributor mentioned that having 900 images for a 10,000 item product line is just not enough.

What manufacturers can provide:

UNSPSC

The industry identified the UNSPSC taxonomy for use in the electrical channel and is now mandating that every product in IDW must have a valid code assigned by December 31, 2009. The manufacturers were supportive of the initiative to move towards fully adopting the UNSPSC to be used by the distributors for their taxonomy. UNSPSC allows the channel to move towards an open standard available worldwide.

IDEA plays a unique role in the development of the electrical portion of the UNSPSC table which allows them to be responsive to the marketplace. IDEA is currently offering an assistance program powered by DATAgility, to help manufacturers assign the codes to meet the rapidly approaching deadline. The Electrical Industry Attribute Schema can be fully utilized once the manufacturers have their UNSPSC codes assigned. The attribute schema was published in October and is the first of its kind in any industry. The schema was a collaborative effort by the IDEA Standards Committee, DATAgility and Unilog. It provides the framework for the key product data attributes that should be populated by the manufacturers. The lowest level category of the UNSPSC is the basis for the schema.

Product Descriptions

One area that was brought up by many of the distributors was the consistency and reliability of the data populated in certain fields. For example, the industry data standard “Invoice Description” has a standard character maximum of 80 characters; however, distributor systems have a range of 24 to 40 characters available for their Invoice Product Descriptions. The manufacturers don’t have the same character limitations and most surveyed were not aware of the distributor system limitations that require shorter descriptions.

Placeholders in the industry product data standard currently allow for a 24, 35 and 250 character description which covers all the various distributor description requirements.

One manufacturer brought up a very interesting point about sending data via EDI. They mentioned that there is a kilocharacter cost and although small, it can really add up if you are sending more data than is needed. Cleaning up the descriptions may reduce characters across several transactions (Purchase Order, PO Acknowledgement, Invoice, etc.) which would reflect in an immediate and repeated cost savings.

Marketing Material & Catalog Data

Virtually all of the distributors in the study have immediate needs for marketing product data to support their web selling and advanced eCommerce programs. Many currently get this data directly from their suppliers or from other data services. Several distributors stated that other data sources would not be needed if they could acquire all the marketing data through IDW.

A review of all the manufacturer participant websites showed rich, robust data including: specification sheets, images, MSDS sheets, instruction manuals, catalog sheets, product selection guides, etc. Product images, standardized attributes (as found in the Electrical Industry Attribute Schema) and a number of other digital assets were identified as critically important to the distributor’s business systems. Manufacturers surveyed at the time were not able to supply marketing data to their distributors to the level of population demanded. Only 31% of the manufacturer participants had the MSDS, image, and specification URLs available in their system.

IDEA is working to bridge the gap between manufacturers and distributors by offering an assistance program to populate the supplier data with URL information that is currently on their website or within other sources.

Looking Ahead

The 2009 IDEA E-Biz Forum continued the efforts set forth in the previous year with the theme “Guide Change by Leading Change”. IDEA will continue to offer solutions to fit the growing needs of their customers and the electrical marketplace. Studying the current landscape of the technological needs of distributors will lead to enhancements in IDW and programs that offer assistance to manufacturers, so they can offer the valuable data needed to sell their products today. In a down economy, IDEA customers can look for ways to expand their eCommerce capabilities and increase operating efficiencies. We believe the quality data delivered will drive sales upward and keep you one step ahead of your competition. They say “time is money”, so what are you waiting for?

About DATAgility:

DATAgility, IDEA’s strategic partner for data management services, offers cost effective solutions that improve data quality which increases sales and reduces operating inefficiencies. Our suite of services include: DATAlignment, Data Governance Development, Data Quality Score Carding, UNSPSC Code Assignment, Attribute Building, Searchable Description Enhancement and Normalization & PIM Implementation Consulting. Managing and delivering the high quality data that your customer needs to run their business is more important than ever in this real time buying environment.

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