December 3, 2008

A Journey through Data Discovery: Part Two

Two industry experts travel through time to share their personal data adventures

Crescent and Hubbell have experienced significant cost savings through data synchronization made possible by the incorporation of the Internet, electronic automation and standards (see Part One of this article series). These two industry leaders are prepared to increase their savings through synchronization. Phil Barrios, Senior Director eBusiness, Hubbell Incorporated (CT) and Ron Schlader, VP Operations and Quality, Crescent Electric Supply (IL) share their past experiences with the hope to inspire the many companies that want to reach an advanced level of data sophistication.

The Paper Times

In the earlier days of data sharing, Hubbell Incorporated sent their product and pricing data to Crescent Electric Supply via print catalogs and price sheets. Crescent staff and a third party service provider manually keyed the information into their business system and Crescent used that information to place paper purchase orders for end users. These orders were then faxed to Hubbell for order fulfillment. Ron Schlader, VP Operations and Quality, Crescent Electric Supply (IL), shared some set-backs encountered during this time period that resulted in high order errors and unnecessary expenses.

  • Inaccurate data – Everyone makes mistakes and data entry is no exception. Unfortunately, small mistakes can lead to significant monetary repercussions in data entry. Each business process that incorporates human intervention dramatically increases error risk. Some examples include typos and misplaced data (e.g. someone enters the item price of $1.00 when it is actually $10.00 or someone enters a price unit of measure as “per each” instead of “per thousand”).
  • Obsolete data – product and pricing data was typically out-of-date by the time it was mailed, manually entered into our business system and quoted to end users. It was nearly impossible for us to know when a product was no longer in production until it was too late to sell off our inventory. Obsolete product data led to unfulfilled orders and higher inventory expenses.
  • Missing data – We outsourced most of our data collection and entry to a third party service provider during this time because we did not have the in-house resources to manually collect or manage all of our vendor data. The data provided by the third party was not reviewed by the manufacturer before it was entered into our business system, which often resulted in insufficient or inaccurate product and pricing information.

The Electronic Age

Hubbell started sending data to Crescent via CDs and electronic spreadsheets. This method of data sharing helped reduce paper usage while speeding up data processing; however, it introduced an entirely new set of problems for the two companies.

“Crescent received electronic data in different formats from each of our vendors and Hubbell received different data format requests from each of their distributors. Therefore, both of our companies spent valuable time trying to translate or interpret the data from our trading partners into our own internal language,” said Schlader.

The problem – there were no industry standards in place for both Hubbell and Crescent to communicate in one common language or format.

Phil Barrios, Senior Director eBusiness, Hubbell, used a glue stick as an analogy to describe this communication barrier, and impact to data without standards.

“If you place a glue stick vertically on the desk and ask someone for an approximate length, width and height, then place the glue stick horizontally and ask the same question, you get two different interpretations. Similar misinterpretation occurs with electrical product data when there is no industry standard implemented.”

The Standards Era

Electrical manufacturers and distributors collaborated to form IDEA in 1998 to address the industry’s problems with the previous methods of data sharing – something that had never been done before in the electro-industry. Both manufacturers and distributors had a common goal to eliminate costs from the supply chain through standards, data synchronization and eCommerce. Barrios and Schlader were no exception.

“Crescent and Hubbell became Charter IDEA customers when the company was introduced to the industry 10 years ago. Phil and I recognized the need for standardized electronic processes and we knew IDEA was the answer,” said Schlader. “IDEA provides the resources and tools that manufacturers and distributors need to synchronize data… it is our responsibility to utilize those resources effectively.”

Barrios walked through the steps Hubbell took to prepare data for synchronization with Crescent via IDEA’s Industry Data Warehouse (IDW).

  1. Clean up old data – determine current sellable merchandise and purge or archive your old product data.
  2. Separate product data, based on usage – determine which product data will benefit distribution and populate the Industry Data Warehouse (IDW) accordingly.
  3. Export core/transactional data– this includes the data needed to conduct a business transaction (e.g. product, pricing and packaging data). Sort all distribution products by Catalog number and check for problem areas.
  4. Develop internal standards – define acceptable data values for the problem areas identified (e.g. Hubbell discovered that some product descriptions stated “no description available”).
  5. Fix problem areas – apply the internal standards to all your current data and take the opportunity to teach product managers best practices for data quality.
  6. Re-import data into your business system – now that you have cleaned up your data, import it back into your business system to have “one version of truth” – current and accurate data.
  7. Develop a product life-cycle management process – decide how you will keep product data up-to-date (e.g. you can’t launch a product until certain information is available and stored in your business system). This requires the most discipline and is often the hardest step of the change management process.
  8. Sync data with trading partners – now you are ready to convey the updated (clean) data into IDW, to ensure your internal data matches the data your customers use to search for and sell your products.
  9. Keep data updated – send product updates to IDW as it becomes available and give your trading partners advance notice of important changes using IDW features such as product life-cycle or future pricing indicator codes.
  10. Focus on attributed data – once you complete the heavy lifting of basic data synchronization – you are ready to take the next step to develop and synchronize attributed data (e.g. UNSPSC codes, images, spec sheets, marketing materials, etc.).

“Crescent has maintained a strong business relationship with Hubbell because they make business easy and profitable – they continually provide quality and current data to IDW which reflects on our bottom line. Distributors expect manufacturers of all sizes to follow in Hubbell’s footsteps. Suppliers that do not go electronic now won’t survive in tomorrow’s marketplace,” said Schlader.

Make sure your company doesn’t get left behind in the old data era –IDEA can help you begin or advance the data synchronization process with your trading partners. Contact your account manager to find out how your company can reap the benefits of data sync.