Data Roadblocks

The common theme of almost all of the presentations at recent CGT events involved leveraging data to derive insights about products, customers and consumers. This shouldn't be a surprise to anyone in the consumer goods (CG) industry. It's all about the data, right? Companies today are focused on better decision making as well as investing in analytical tools and processes to incorporate more data from more sources.

The data that retailers share with suppliers -- from daily, store-level point-of-sale (POS) data to loyalty card data -- is sending shockwaves through the industry as we all salivate over what is possible . We could reduce stock outs, ensure successful new product launches, streamline supply chains and even gain a better understanding of consumer actions.

Yet, success requires accurate and timely data and, fortunately, new technology is enabling access to such information to a much wider audience. Still, roadblocks remain.

One of the benefits of being the Executive Editor for CGT is that, once in a while, I get a platform to preach from. As many of you know, I have been involved with helping CG companies leverage downstream data, particularly POS data, since I first coined the term "demand signal repository" in 2003.

So bring out the soapbox, and I'll explain why we are in danger of never fully realizing the benefits of the data to which we have access today and tomorrow.

Learning from the Past

Let me bring you back to 2000 when a consortium named Transora was launched with $250 million committed from 49 CG companies. Data synchronization was expected to deliver countless benefits as the item information we shared with trading partners was harmonized and flowed through our systems without as much as a hiccup. Invoices were matched flawlessly, e-commerce would flourish with electronic product information, and it would save the industry an estimated $40 billion. 

In reality, data elements were manually entered and sent to trading pools. The original data sources often remained untouched, or if they were cleansed, they soon reverted to their old inaccurate status because there weren't any master data processes in place to keep them clean. Even worse, the data that did reach the retailers remained in a silo and never permeated the rest of their applications. As a result, the data that retailers did share, either through VMI or CPFR relationships or early POS initiatives, didn't match. 

Sound familiar? Soon after data synchronization hit the airwaves, we were consumed by RFID-fever, which promised insightful data that would transform our supply chains. It was all about new information that would enable us to track shipments in near real time, from production to store shelves and even to trash compactors.

While the reasons RFID wasn't widely adopted were different, this is another example where the lure of the data and the potential benefits it could deliver were almost irresistible. 

MDM Isn't Optional Anymore

I dredge up the past because of the déjà vu that is occurring when I talk to CG manufacturers that are trying to leverage downstream data. The ghosts of GDSN and RFID threaten to doom POS initiatives if the industry doesn't take master data management (MDM) to heart. And by industry, I mean not just manufacturers, but retailers too.

All trading partners will benefit from the free exchange of downstream data, whether it is POS, shipment, loyalty, VMI and CPFR transactions, or even RFID data, and the technology is available to turn the terabytes of data into valuable insights.

Going back through old ERP data isn't sexy and it won't show up on a press release, but if we don't clean our data to ensure it is accurate and implement processes to keep it clean, then we will never realize the true potential of collaborative data sharing.