Category Archives: Manufacturing
“Raw materials costs are the company’s single largest expense category,” said Steve Jenkins, Global IT Director at Valspar, at MDM Day in London. “Data management technology can help us improve business process efficiency, manage sourcing risk and reduce RFQ cycle times.”
Valspar is a $4 billion global manufacturing company, which produces a portfolio of leading paint and coating brands. At the end of 2013, the 200 year old company celebrated record sales and earnings. They also completed two acquisitions. Valspar now has 10,000 employees operating in 25 countries.
As is the case for many global companies, growth creates complexity. “Valspar has multiple business units with varying purchasing practices. We source raw materials from 1,000s of vendors around the globe,” shared Steve.
“We want to achieve economies of scale in purchasing to control spending,” Steve said as he shared Valspar’s improvement objectives. “We want to build stronger relationships with our preferred vendors. Also, we want to develop internal process efficiencies to realize additional savings.”
Poorly managed vendor and raw materials data was impacting Valspar’s buying power
The Valspar team, who sharply focuses on productivity, had an “Aha” moment. “We realized our buying power was limited by the age and quality of available vendor data and raw materials data,” revealed Steve.
The core vendor data and raw materials data that should have been the same across multiple systems wasn’t. Data was often missing or wrong. This made it difficult to calculate the total spend on raw materials. It was also hard to calculate the total cost of expedited freight of raw materials. So, employees used a manual, time-consuming and error-prone process to consolidate vendor data and raw materials data for reporting.
These data issues were getting in the way of achieving their improvement objectives. Valspar needed a data management solution.
Valspar needed a single trusted source of vendor and raw materials data
The team chose Informatica MDM, master data management (MDM) technology. It will be their enterprise hub for vendors and raw materials. It will manage this data centrally on an ongoing basis. With Informatica MDM, Valspar will have a single trusted source of vendor and raw materials data.
Informatica PowerCenter will access data from multiple source systems. Informatica Data Quality will profile the data before it goes into the hub. Then, after Informatica MDM does it’s magic, PowerCenter will deliver clean, consistent, connected and enriched data to target systems.
Better vendor and raw materials data management results in cost savings
Valspar expects to gain the following business benefits:
- Streamline the RFQ process to accelerate raw materials cost savings
- Reduce the total number of raw materials SKUs and vendors
- Increase productivity of staff focused on pulling and maintaining data
- Leverage consistent global data visibly to:
- increase leverage during contract negotiations
- improve acquisition due diligence reviews
- facilitate process standardization and reporting
Valspar’s vision is to tranform data and information into a trusted organizational assets
“Mastering vendor and raw materials data is Phase 1 of our vision to transform data and information into trusted organizational assets,” shared Steve. In Phase 2 the Valspar team will master customer data so they have immediate access to the total purchases of key global customers. In Phase 3, Valspar’s team will turn their attention to product or finished goods data.
Steve ended his presentation with some advice. “First, include your business counterparts in the process as early as possible. They need to own and drive the business case as well as the approval process. Also, master only the vendor and raw materials attributes required to realize the business benefit.”
Want more? Download the Total Supplier Information Management eBook. It covers:
- Why your fragmented supplier data is holding you back
- The cost of supplier data chaos
- The warning signs you need to be looking for
- How you can achieve Total Supplier Information Management
The Catalog is Dead.
According to the Multi Channel Merchant Outlook 2014 survey, the eCommerce website (not a surprise ) is the top channel through which merchants market (90%). The social media (87.2%) and email (83%) channels follow close behind. Although catalogs may have dropped as a marketing tool, 51.7% of retailers said they still use the catalog to market their brands.
Source: MCM Outlook 2014
The Changing Role of the Catalog
Merchants are still using catalogs to sell products. However, their role has changed from transactional to sales tool. On a scale of 1 to 10, with 10 being the most important, merchant respondents said that using catalogs as mobile traffic drivers and custom retention tools were the most important activities (both scored an 8.25). At 7.85, web traffic driver was a close third.
Source: MCM Outlook 2014
Long Live the Catalog: Prospecting
More than three-quarters of merchant respondents said catalogs were the top choice for the method of prospecting they will use in the next 12 months (77.7%). Catalog was the most popular answer, followed by Facebook (68%), email (66%), Twitter (42.7%) and Pinterest (40.8%).
What is your point of view?
How have catalogs changed in your business? What are your plans and outlook for 2015? It would be very interesting to hear points of views from different industries and countries… I’d be happy to discuss here or on Twitter @benrund. My favorite fashion retailer keeps sending me a stylish catalog, which makes me order online. Brands, retailer, consumer – how do you act, what do you expect?
The Informed Purchase Journey
The way we shop has changed. It’s hard to keep up with customer demands in a single channel, much less many. Selling products today has changed and always will. The video below shows how today’s customer takes The Informed Purchase Journey:
“Customers expect a seamless experience that makes it easy for them to engage at every touchpoint on their “decision journey. Informatica PIM is key component on transformation from a product centric view to a consumer experience driven marketing with more efficiency.” – Heather Hanson – Global Head of Marketing Technology at Electrolux
Selling products today is:
- Shopper-controlled. It’s never been easier for consumers to compare products and prices. This has eroded old customer loyalty and means you have to earn every sale.
- Global. If you’re selling your products in different regions, you’re facing complex localization and supply chain coordination.
- Fast. Product lifecycles are short. Time-to-market is critical (and gets tougher the more channels you’re selling through).
- SKU-heavy. Endless-aisle assortments are great for margins. That’s a huge opportunity, but product data overload due to the large number of SKUs and their attributes adds up to a huge admin burden.
- Data driven. Product data alone is more than a handful to deal with. But you also need to know as much about your customers as you know about your products. And the explosion of channels and touch points doesn’t make it any easier to connect the dots.
Conversion Power – From Deal Breaker To Deal Maker
For years, a customer’s purchase journey was something of “An Unexpected Journey.” Lack of insight into the journey was a struggle for retailers and brands. The journey is fraught with more questions about product than ever before, even for fast moving consumer goods.
Today, the consumer behaviors and the role of product information have changed since the advent of substantial bandwidths and social buying. To do so, lets examine the way shoppers buy today.
- Due to Google shoppers use 10.4 sources in average (zero moment of truth ZMOT google research)
- 133% higher conversion rate shown by mobile shoppers who view customer content like reviews.
- Digital devices’ influence 50% of in-store purchase behavior by end of 2014 (Deloitte’s Digital Divide)
How Informatica PIM 7.1 turns information from deal breaker to deal maker
PIM 7.1 comes with new data quality dashboards, helping users like category managers, marketing texters, managers or ecommerce specialists to do the right things. The quality dashboards point users to the things they have to do next in order to get the data right, out and ready for sales.
Eliminate Shelf Lag: The Early Product Closes the Sale
For vendors, this effectively means time-to-market: the availability of a product plus the time it takes to collect all relevant product information so you can display it to the customer (product introduction time).
The biggest threat is not the competition – it’s your own time-consuming, internal processes. We call this Shelf Lag, and it’s a big inhibitor of retailer profits. Here’s why:
- You can’t sell what you can’t display.
- Be ready to spin up new channels
- Watch your margins.
How Informatica PIM 7.1 speeds up product introduction and customer experience
“By 2017… customer experience is what buyers are going to use to make purchase decisions.” (Source: Gartner’s Hype Cycle for E-Commerce, 2013) PIM 7.1 comes with new editable channel previews. This helps business users like marketing, translators, merchandisers or product managers to envistion how the product looks at the cutomer facing webshop, catalog or other touchpoint. Getting products live online within seconds, we is key because the customer always wants it now. For eCommerce product data Informatica PIM is certified for IBM WebSphere Commerce to get products ready for ecommerce within seconds.
The editable channel previews helps professionals in product management, merchandizing, marketing and ecommerce to envision their products as customers are facing it. The way of “what you see is what you get (WYSIWYG)” product data management improves customer shopping experience with best and authentic information. With the new eCommerce integration, Informatica speeds up the time to market in eBusiness. The new standard (certified by IBM WebSphere Commerce enables a live update of eShops with real time integration.
The growing need for fast and s ecure collaboration across globally acting enterprises is addressed by the Business Process Management tool of Informatica, which can now be used for PIM customers.
Intelligent insights: How relevant is our offering to your customers?
This is the age of annoyance and information overload. Each day, the average person has to handle more than 7,000 pieces of information. Only 25% of Americans say there are brand loyal. That means brands and retailers have to earn every new sale in a transparent world. In this context information needs to be relevant to the recipient.
- Where do the data come from? How can product information auto-cleansed and characterizing into a taxonomy?
- Is the supplier performance hitting our standards?
- How can we mitigate risks like hidden costs and work with trusted suppliers only?
- How can we and build customer segmentations for marketing?
- How to build product personalization and predict the next logical buy of the customer?
It is all about The Right product. To the Right Person. In the Right Way. Learn more about the vision of the Intelligent Data Plaform.
Informatica PIM Builds the Basis of Real Time Commerce Information
All these innovations speed up the new product introduction and collaboration massively. As buyers today are always online and connected, PIM helps our customer to serve the informed purchase journey, with the right information in at the right touch point and in real time.
- Real-time commerce (certification with IBM WebSphere Commerce), which eliminates shelf lag
- Editable channel preview which help to envision how customers view the product
- Data quality dashboards for improved conversion power, which means selling more with better information
- Business Process Management for better collaboration throughout the enterprise
- Accelerator for global data synchronization (GDSN like GS1 for food and CPG) – which helps to improve quality of data and fulfill legal requirements
All this makes merchandizers more productive and increases average spend per customer.
One Search Procurement – for purchasing of indirect goods and services
Informatica Procurement is the internal Amazon for purchasing of MRO, C-goods, indirect materials and services. Informatica Procurement supports enterprise companies in catalog procurement with an industry-independent catalog procurement solution that enables fast and cost-efficient procurement of products and services and supplier integration in an easy to use self-service concept.
Information Procurement at a glance
Informatica recently announced the availability of Informatica Procurement 7.3, the catalog procurement solution. I meet with Melanie Kunz our product manager to learn from here what’s new.
Melanie, for our readers and followers, who is using Informatica Procurement, for which purposes?
Melanie Kunz: Informatica Procurement is industry-independent. Our customers are based in different industries – from engineering and the automotive to companies in the public sector (e.g. Cities). The responsibilities of people who work with Informatica Procurement differ depending on the company. For some customers, only employees from the purchasing department order items in Informatica Procurement. For other customers, all employees are allowed to order their needs themselves. Examples are employees who need screws for the completion of their product or office staff who ordered the business cards for the manager.
What is the most important thing to know about Informatica Procurement 7.3?
Melanie Kunz: In companies where a lot of IT equipment is ordered, it is important to always see the current prices. With each price changes, the catalog would have to be imported into Informatica Procurement. With a punch out to the online shop of IT equipment manufacturer, this is much easier and more efficient. The data from these catalogs are all available in Informatica Procurement, but the price can always be called on a daily basis from the online shop.
Users no longer need to leave Informatica Procurement to order items from external online shops. Informatica Procurement now enables the user to locate internal and indexed external items in just one search. That means you do not have to use different eShops for when you order new office stationary, IT equipment or services.
Great, what is the value for enterprise users and purchasing departments?
Melanie Kunz: All items in Informatica Procurement have the negotiated prices. Informatica Procurement is simple and intuitive that each employee can use the system without training. The view concept allows the restriction on products. For each employee (each department), the administrator can define a view. This view contains only the products that can be seen and ordered.
When you open the detail view for an indexed external item, the current price is determined from the external online shop. This price is saved in item detail view for a defined period. In this way, the user always gets the current price for the item.
The newly designed detail view has an elegant and clear layout. Thus, a high level of user experience is safe. This also applies to the possibility of image enlargement in the search result list.
What if I order same products frequently, like my business cards?
Melanie Kunz: The overview of recent shopping carts help users to reorder the same items on an easy and fast way. A shopping cart from a previous order can use as basis for this new order.
Large organizations with 1000s of employees are even more might have totally different needs what they need for the daily business and maybe dedicated to their career level. How do you address this?
Melanie Kunz: The standard assortment feature has been enhanced in Informatica Procurement 7.3. Administrators can define the assortment per user. Furthermore, it is possible to specify whether users have to search the standard assortment first and only search in the entire assortment if they do not find the relevant item in the standard assortment.
All of these features and many more minor features not only enhance the user experience, but also reduce the processing time of an order drastically.
Informatica Procurement 7.3 “One Search” at a glance
Learn more on Informatica Procurement 7.3 with the latest webinar.
“Inaccurate, inconsistent and disconnected supplier information prohibits us from doing accurate supplier spend analysis, leveraging discounts, comparing and choosing the best prices, and enforcing corporate standards.”
This is quotation from a manufacturing company executive. It illustrates the negative impact that poorly managed supplier information can have on a company’s ability to cut costs and achieve revenue targets.
Many supply chain and procurement teams at large companies struggle to see the total relationship they have with suppliers across product lines, business units and regions. Why? Supplier information is scattered across dozens or hundreds of Enterprise Resource Planning (ERP) and Accounts Payable (AP) applications. Too much valuable time is spent manually reconciling inaccurate, inconsistent and disconnected supplier information in an effort to see the big picture. All this manual effort results in back office administrative costs that are higher than they should be.
Do these quotations from supply chain leaders and their teams sound familiar?
“We have 500,000 suppliers. 15-20% of our supplier records are duplicates. 5% are inaccurate.”
“I get 100 e-mails a day questioning which supplier to use.”
“To consolidate vendor reporting for a single supplier between divisions is really just a guess.”
“Every year 1099 tax mailings get returned to us because of invalid addresses, and we play a lot of Schedule B fines to the IRS.”
“Two years ago we spent a significant amount of time and money cleansing supplier data. Now we are back where we started.”
Please join me and Naveen Sharma, Director of the Master Data Management (MDM) Practice at Cognizant for a Webinar, Supercharge Your Supply Chain Applications with Better Supplier Information, on Tuesday, July 29th at 11 am PT.
During the Webinar, we’ll explain how better managing supplier information can help you achieve the following goals:
- Accelerate supplier onboarding
- Mitiate the risk of supply disruption
- Better manage supplier performance
- Streamline billing and payment processes
- Improve supplier relationship management and collaboration
- Make it easier to evaluate non-compliance with Service Level Agreements (SLAs)
- Decrease costs by negotiating favorable payment terms and SLAs
I hope you can join us for this upcoming Webinar!
Recently, I ordered a pair of athletic pants from a high-fashion, online retailer. The pants were a well-known brand and cost $96.00. The package arrived within a few days. However, when I opened the box, I found it did not contain the product I expected. The brand and color were correct, but it was not the style I’d chosen. Disappointed, I wrote the retailer, explaining the issue and requesting the correct product. Then, I returned the incorrect product.
According to recent research, the average vendor’s “cost per return” is $20.00. That means that my return was a Margin Killer for the retailer.
Three days later, the replacement delivery arrived. Whoop there it is… Disappointment number two. It was the exact same incorrect product. Yet another Margin Killer, Return Number 2. Another $20.00 in costs for the retailer. What would it take for this retailer’s logistic team to avoid repeating their error? Could they scan the product? Could they use a QR code, a bar-code or some sort of picture?
I returned the incorrect product for the second time. Eventually, shipment number three reached my home. Can you guess what was in the box? Yes, the same incorrect product, again, for the third time. The Margin Killer: Return Number 3. For this retailer, the math is simple:
Return 1: $20.00
Return 2: $20.00
Return 3: $20.00
Total return cost: $60.00
Revenue = Possibly zero?
Funky side note: When browsing stores downtown on Saturday, I found the correct pants in a SportScheck store, and for ten dollars less! So remember, the modern customer is demanding, always-connected and shopping on an “Informed Purchase Journey”.
So how can I learn more?
If you work in retail technology, you will find rich information about this purchase journey at the Informatica World 2014 conference. The Retail Path track will feature insights from companies like Nike, Avent, Discount Tire, Nordstrom, Geiger, Intricity and Deloitte. Experts will share ways to leverage your data to boost your sales and heighten customer experience. The conference even has a dedicated MDM Day on Monday May 12 with workshops and sessions showing how vendors, distributors, retailers and individuals interact in the “always-on” connected world. Make sure you have a spot by signing up HERE.
Maybe the word “death” is a bit strong, so let’s say “demise” instead. Recently I read an article in the Harvard Business Review around how Big Data and Data Scientists will rule the world of the 21st century corporation and how they have to operate for maximum value. The thing I found rather disturbing was that it takes a PhD – probably a few of them – in a variety of math areas to give executives the necessary insight to make better decisions ranging from what product to develop next to who to sell it to and where.
Don’t get me wrong – this is mixed news for any enterprise software firm helping businesses locate, acquire, contextually link, understand and distribute high-quality data. The existence of such a high-value role validates product development but it also limits adoption. It is also great news that data has finally gathered the attention it deserves. But I am starting to ask myself why it always takes individuals with a “one-in-a-million” skill set to add value. What happened to the democratization of software? Why is the design starting point for enterprise software not always similar to B2C applications, like an iPhone app, i.e. simpler is better? Why is it always such a gradual “Cold War” evolution instead of a near-instant French Revolution?
Why do development environments for Big Data not accommodate limited or existing skills but always accommodate the most complex scenarios? Well, the answer could be that the first customers will be very large, very complex organizations with super complex problems, which they were unable to solve so far. If analytical apps have become a self-service proposition for business users, data integration should be as well. So why does access to a lot of fast moving and diverse data require scarce PIG or Cassandra developers to get the data into an analyzable shape and a PhD to query and interpret patterns?
I realize new technologies start with a foundation and as they spread supply will attempt to catch up to create an equilibrium. However, this is about a problem, which has existed for decades in many industries, such as the oil & gas, telecommunication, public and retail sector. Whenever I talk to architects and business leaders in these industries, they chuckle at “Big Data” and tell me “yes, we got that – and by the way, we have been dealing with this reality for a long time”. By now I would have expected that the skill (cost) side of turning data into a meaningful insight would have been driven down more significantly.
Informatica has made a tremendous push in this regard with its “Map Once, Deploy Anywhere” paradigm. I cannot wait to see what’s next – and I just saw something recently that got me very excited. Why you ask? Because at some point I would like to have at least a business-super user pummel terabytes of transaction and interaction data into an environment (Hadoop cluster, in memory DB…) and massage it so that his self-created dashboard gets him/her where (s)he needs to go. This should include concepts like; “where is the data I need for this insight?’, “what is missing and how do I get to that piece in the best way?”, “how do I want it to look to share it?” All that is required should be a semi-experienced knowledge of Excel and PowerPoint to get your hands on advanced Big Data analytics. Don’t you think? Do you believe that this role will disappear as quickly as it has surfaced?
I was recently boarding a flight in New York and started reading the New York Times. One article jumped out: “User reviews make it harder for marketers to manipulate.” A Stanford University research report proves a wealth of product information and user reviews is causing a fundamental shift in how consumers make decisions.
Consumers rely more on one another
The latest research from Dr. Simonson and Emanual Rosen is based on an experiment performed decades ago at Duke University. In the experiment participants had to choose from a group of either two or three cameras. The research found that consumers chose the cheaper product when being offered two options, but when given three choices, most went with the middle one. It was called the “compromise effect,” which has been used by marketers to impact buying decisions.
But an updated version of the experiment allowed participants to read product ratings and reviews before choosing one of the three cameras. While a portion of the participants always choose the lowest-priced product, in this new scenario more participants are selecting the most expensive product over the middle-priced product based on customer reviews.
“The compromise effect is gone,” says Dr. Simonson in this New York Times article. The Book “Absolute Value” comes with a more in depth explanation: (http://www.absolutevaluebook.com/).
Imagine if you could own and control both customer opinion and product information? The next wave taking omnichannel commerce to the next level will address information relevancy at every channel and all customer interactions – called Commerce Relevancy.