December 3, 2008

Y it Matters if Your Products are P, O or D

Don’t let the name “industry data warehouse” fool you, IDEA’s Industry Data Warehouse (IDW) is the only platform which acts as a product life-cycle updating service to provide critical information to trading partners. It is critical that the manufacturer data in IDW (i.e. Item Status code field) is current and frequently reviewed by the manufacturer.

Synchronizing manufacturer Item Status codes via IDW is one of the keys to data synchronization, growing profits and cutting hidden costs. Item Status codes represent short-hand notes that can be interpreted by a computer to indicate when active production items will be discontinued. There are several Item Status codes available to pinpoint the different product life-cycles stages. These codes should be used to notify a distributor of a product phase-out in time to successfully retire an item. The most significant codes manufacturers need to utilize include:

“P” Planned obsolescence – the item will be phased out of production

Message to distributors – you may want to remove this product from your buy list and take steps to sell off remaining inventory.

“O” Obsolete – the item can no longer be purchased

Message to distributors – check with local rep on replacement products.

“D” Delete – the item can no longer be purchased and it will be removed from IDW in 30 days

Message to distributors: there will be no more updates on this item in IDW.

Popular distributor enterprise resource planning (ERP) software incorporates built-in reporting designed to react to the different Item Status codes. This helps save distributors and manufacturers time and money and prevents unnecessary returns. When a distributor does not receive Item Status code updates via the manufacturer’s IDW changes, the distributor could make an incorrect or poor purchase decision. For example, if a manufacturer does not flag an “A” – Active item as “P” – Planned obsolescence, the distributor will not be warned of depleted supplies. The distributor could reorder an obsolete item in large quantities for inventory if they are unaware that there is a new and improved replacement product available.

One way a manufacturer can keep Item Status codes updated is to review their IDW data against their back-end system data before and after every major price change to ensure that all items have current pricing. The items without current pricing should have a change in the Item Status code to indicate whether the current product life-cycle status is active or inactive.

Item Status codes were created and are periodically reviewed by the IDEA Standards Committee. The IDEA Standards white paper entitled “Product Change Management” is available for download on the IDEA Customer Portal under >My Training and Support>Standards>IDW. This document defines each Item Status code and how they should be properly utilized in the electrical industry.

Manufacturers can contact Beth Badrakhan or (703) 562-4602 to find out how well they are keeping up with their product life-cycle updates.