Up and coming industry-wide initiative: LOCATION, LOCATION, LOCATION

All roads lead to Rome, as the expression goes, but for consumer goods companies all roads lead to the retailer -- the consumer goods company's customer. Nothing happens without the right product, getting to the right place, at the right time. However, managing the place -- the customer data -- is a daunting task and that resource has largely been a vastly underestimated asset. This month, Consumer Goods Technology caught up with Scott Taylor, Executive Vice President & General Manager of TDLinx. Taylor lends his insight into what is quickly becoming an industry-wide initiative around Location Information Management (LIM).

Over the past few years, the retail landscape has drastically changed. how do you Expect the market to shift in the coming years? Last year, across all retail channels we track at TDLinx, over 47,000 stores opened, 36,000 closed and 74,000 changed owners, suppliers or their banner name on the front of their store -- that's 431 stores that open, close or change reporting relationship every day. This is a 17 percent increase over 2003 and indicates clearly that the challenge will continue to grow for manufacturers as they try keep track of their customers. The on-premise channels -- places where you can consume alcohol -- are just as volatile. And I can't imagine it won't continue to change into the foreseeable future.

what are some strategic initiatives That cG companies have taken to manage this shift?

Consumer goods manufacturers and alcohol beverage suppliers are quickly realizing the value of their customer master file as a strategic information asset. Every consumer goods manufacturer has to keep up with the pace of retail change. It's a daunting task -- they have to reflect those changes internally in many places and in different functional customer information silos. They have ship-to records from Logistics, bill-to records from Finance and sell-to-plan-to records from Sales. Each record could have a different number or internal code. All of these numbers are embedded in the manufacturer's legacy systems and in the way the product is produced, shipped and invoiced. These numbers are strictly internal. They don't mean anything to anyone except the manufacturer -- and specifically only to the functional areas that own them. Add external data scan from ACNielsen and IRI, POS data directly form from retailers and consumer insight data like Spectra, and you have an insurmountable job keeping everything aligned. Besides all of the disparate data silos, there are also issues with data integrity and maintenance. Companies are spending more and more resources on customer data cleanliness, maintenance and consistency, without gaining efficiency or accuracy in return.

CG companies are challenged with data from a multitude of touch points. explain the concept of Location Information Management (LIM)? Data synchronization, and the industry forces that drive it, have brought all of this to a head. Manufacturers now realize that the old way of knitting separate data together for ad hoc reports and using clerical maintenance methods won't work in data sync. It just doesn't scale. So, companies are realizing the need for a systematic and repeatable way to maintain, integrate and raise this issue up to the strategic level with Location Information Management.

This new industry initiative, known as LIM, is a systematic and repeatable way to maintain, integrate and leverage rich customer location information. It's all the ship-tos, bill-tos, plan-tos, sell-tos and account hierarchies combined with other key intelligence about customers to create a sustainable competitive advantage. Companies are enhancing their system infrastructures, critical business applications and processes to more successfully aggregate, integrate, communicate and evaluate location data across internal touch points -- including direct sales, indirect sales, call centers, brokers, and can do so in a standards-compliant manner.

how does LIM build upon what has traditionally been a focus on product or item information?

Product Information Management, or PIM, alone is too narrow of a focus. Customer activity is both product and place. When evaluating your business by key accounts or customers, by trade channel or integrating other internal and external data -- you need to know location.

Over the past few years, a convergence of several factors has created an imperative to focus on Location now as never before:

4Focus on item information or Product Information Management (PIM)
4Rapidly growing numbers of customer locations and need to use them in Global Data Synchronization (GDS)
4Continuously changing landscape of the marketplace (Channel/Market Churn)
4Increasing demand for accurate, complete customer location information at any time
4Expanding numbers of systems and files that contain critical customer location information
4Need for a methodology to integrate customer location information data across an enterprise
4Evolution of GDS and (Electronic Product Code) EPC driving the need for LIM as a core component

How Do companies use this knowledge to optimize sales opportunities and improve retail customer service?

Companies start internally with simply having one version of the truth when talking about their customer. Their customer master file is structured using standardized naming conventions and standardized channel definitions. It is de-duped, cleansed and validated. From there, they have better key account reporting the way customers see themselves. Then this customer data needs to be coded so it can easily align with other internal and external data sources as well as being compliant with industry standards.

What tangible return can cG executives expect to see from combining customer location content with business process? First, it is reducing manual effort to maintain location information within the content team and across the enterprise. Costs of maintaining redundant systems are also reduced through the centralization of location information. It relieves Sales of the clerical mundane burden of tracking stores and accounts.

Second is the ability to systematically integrate disparate internal and external data sources. Consumer goods firms would have the ability to internally integrate the customer dimension of billing, shipments and sales. They'd be able to match scanner data with sales, shipments, financial information and seamlessly apply consumer insights, plus they can turn external promotional, marketing, sales and merchandising activity into data. Additionally, they'd be able to communicate seamlessly with service providers, internal web-based systems, field sales and brokers.

They are also enabled to succinctly evaluate through their enterprise-wide customer management system. It is an account and market-level customer organization. Trade spend management becomes easier, co-marketing becomes more effective, account profitability becomes clearer. Finally, once all of the location information is standardized, cleaned, coded and integrated, they can gain the true value of external data synchronization.