December 19, 2007

Why is the Item Status Code so Important to my Organization?

The Industry Data Warehouse (IDW) Item Status codes provide a short cut to assist manufacturers in delivering messages about their product changes. These messages are critical to inventory management within the distributors’ business software.


The IDW Item Status codes indicate when items are:

  • active
  • on temporary engineering hold
  • on planned obsolescence
  • obsolete
  • withdrawn
  • effected by GTIN changes


Distributor and Contractor business system software can also take advantage of the process changes these codes initiate to assist in inventory management.


For example, “P” for planned obsolescence, warns the distributor of items the manufacturer plans to delete from their product line. In many cases a report is initiated for the purchasing personnel to ensure these items are not re-ordered. This scenario might be handled by notifying sales management so they can create special sales opportunities to sell off remaining inventory. Notification of the pending obsolescence is important to ensure any “returns for credit” are quickly submitted. All of this activity is generated off of the receipt of a single code changing from “A” to “P” for a single Stock Keeping Unit (SKU). Item Status codes play an important role in distributor business systems while also allowing them to properly manage their inventory.


Replacement Universal Product Code (UPC) and Replacement Catalog number fields also help the distributor with the removal and replacement of new items. These fields tell the distributor exactly which item should be purchased in place of the item being retired. This information is part of the distributors’ download, and can be read by their Enterprise Resource Planning (ERP) software.


The problem is that important messages like stop using part # XYZ, start using part # ABC instead, are not reaching the folks who are crafting the data.


If the distributor still has inventory of the older product, he needs an opportunity to move those products. They may be obsolete to the manufacturer, but to the distributor they remain viable products until they leave his inventory. Writing phrases like, “Obsolete”, “OBS”, “Deleted item”, “Replaced by…”, “Part is old”, or other similar notes in the description field (which is printed on the customers’ invoices) does not help to make the sale. Even if the manufacturer sends out a letter listing items planned for retirement, it may not reach the correct person or may be improperly entered when it is retyped.


The ‘replaced by’ data is extremely valuable. It allows the distributor to retain a sale by automatically moving the customer to a newer product. IDW indefinitely retains the older part numbers so this conversion can occur 20 years after the product is obsolete. Manufacturers should take advantage of the powerful tools that the IDW application and data provides. Utilizing the Item Status codes can save your company and your customers’ bottom lines.



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