When it comes to aftermarket systems, it’s still all about the data

I was recently reminded by some customers that what’s old is new again. What’s troubling is that what’s new again is often the same old stuff. It’s still all about the data. And, it’s really bumming me out to think about the lost productivity and squandered IT investments that result from some in the supply chain ignoring data best practices for years.

That’s not to say that we haven’t made progress. Many business leaders have embraced the notion that data is the fuel that powers their business systems. And, as with any fuel, as the quality goes up so does the performance of those business systems.

Reports and analytics become more reliable and useful when data is more complete, consistent and robust. Processing transactions such as purchase orders and invoices can be fully automated when data exceptions no longer require manual intervention and remediation.

The return-on-investment analysis and cost justification for any big IT investment is based on the technology performing to its fullest potential. There is no mention in the proposal about 20 percent or more of the purchase orders failing to process due to data errors, and requiring manual reconciliation. Nor does the sales representative address the cost of shipping errors and lost sales attributed to product data that was out of synch between trading partners.

Before any executive takes the time to read a proposal for a major investment that relies on perfect data, they should ask their chief data officer (if they have one), “what’s the quality of our data?” If they’re not satisfied with the answer, that IT proposal should be filed in the bottom drawer.

It was almost 15 years ago that Jerry McCabe, then head of marketing for Dana Aftermarket, addressed the Aftermarket eForum with a most thoughtful discussion of the effect and impact of sub-par product and transaction content. Jerry itemized the effects he had observed from part numbers that didn’t match and basic commerce values that were at odds with those of their customers. He concluded that “it’s all about the data” and advised his peers that there was no greater return on investment a business could make than one in perfecting product and transaction data, and the systems and processes required to keep that data in synch with your trading partners.

While many have heeded that message, I was shocked to speak with two automotive executives recently, who opened our conversation with, “the largest challenge we face lies in the data.” Specifically, they were both referring to the difficulty of reconciling brands and part numbers between trading partners. Nothing else really matters if a buyer and seller can’t agree on the brand and part number. Purchase orders, sales analysis, forecasts, category management, inventory automation and so on – these systems won’t perform up to their full potential as long as customer service has to intervene or vast mapping and interchange tables need to be developed and maintained.

The specific difficulty my executives explained was that distributors had created different part numbers for an item from what the supplier used. Across multiple distributors the problem just multiplied. Full order processing automation was being largely blocked by a failure to have a single version of the truth.

The choice being contemplated was whether a master mapping table should be managed by the group headquarters or the burden should be pushed over to the suppliers to resolve the differences. In either case, needless expense and lost efficiency are imposed on the supply chain.

Distributors may have perfectly legitimate reasons for keeping a suppliers’ item under different or even multiple stocking part numbers. Sourcing items from more than one supplier is the most common explanation. Keeping the supplier’s original part number on the stocking item, and sending both the stocking part number as well as the supplier’s part number, is the best practice for ensuring that the supplier can easily recognize the part number when they get a replenishment order.

Brand identification shouldn’t be a guessing game either. The industry maintains a standard reference table for brand identification at the Auto Care Association (www.autocare.org). Buyers and sellers will refer to, and consolidate brands in whatever fashion they decide. But, for purchase orders and other data exchange, a neutral reference code serves to bridge the gap without interfering with anyone’s business systems.

Many distributors, retailers and suppliers have made significant progress in reducing errors and waste associated with poor data quality. But, it remains important for all executives to remember the role of data governance and quality in the business results they get out of their IT investments. Jerry was right 15 years ago – it’s still “all about the data.” Trading partners have got to stop putting up data barriers in their trading relationships and invest in the systems and methods that perfect their product and commerce data, and keep it in synch.

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