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Item Data exchanged between manufacturers and distributors in the electrical industry contain significant errors, according to a report released by the Industry Data Exchange Association. The report was the result of a study conducted to determine the level of synchronization of item data exchanged between manufacturers and distributors in the industry.
The data synchronization study demonstrates that there is a wide degree of variance between the trading partner's item data causing significant financial and supply chain problems in the industry. According to the study, 60% of the items submitted by manufacturers do not accurately match those in their trading partner's files costing companies in the industry hundreds of millions of dollars in increased transaction costs and lost sales.
"The study reveals that the industry faces a significant challenge in achieving and maintaining data synchronization," said Mike Rioux, President of IDEA. "Recognizing the high cost of this critical business issue, the IDEA Board of Directors approved the implementation of an IDW Data Audit and Certification Program. Profile Systems was selected to provide the data audit services for IDEA with the objective of ensuring that accurate, valid data is exchanged between trading partners in the industry."
The study focused on identifying specific data issues between pairs of trading partners consisting of a manufacturer and of one of their distributors. 10 leading Manufacturers and 8 Distributors participated in this study. The trading partners' data was matched on UPC code, part number, order quantity, unit of measure, distributor pricing and trade pricing. The participating manufacturers included; 3M, Cooper Bussmann, Cooper Crouse-Hinds, Cutler Hammer, Erico and Erico Canada, Hoffmann Enclosures, Hubbell, Osram Sylvania, Southwire, and Thomas & Betts. The distributors included; GE Supply, Crescent Electric, Hughes Electric, McNaughton-McKay, Stuart Irby, WESCO Distribution and WESCO Canada.
"We are glad that we participated in the pilot program because the results have enabled us to take immediate action and create a program to clean up our business data errors," said Ron Schlader, Vice President ﾖ Operations and Quality for Crescent Electric Supply. "We are creating processes to ensure that we continuously exchange good quality data with our trading partners thus saving costs for our whole supply chain."
Results from data synchronization studies in multiple industries support the electrical industry findings. A recent study by the Automotive Aftermarket Industry Association concluded that the industry was losing $1.7 billion due to item data errors. An earlier report by the IDEA and the National Electrical Manufacturers Association (NEMA) revealed that product and pricing inaccuracies are costing manufacturers and distributors 1% and ﾾ% of sales respectively. In a study for the Grocery industry released late last year, AT Kearney announced that 30% of items in retailer item files were in error and that the Consumer Packaged Goods industry alone is losing $40 billion in sales every year due to poor product information.
Profile Systems, an IDEA technology partner, was authorized to perform the data synchronization analysis to help illustrate the extent and impact of data synchronization on the Industry. Profile has been involved in conducting similar product data pilot programs in other industries and has assisted hundreds of companies in managing their product data more efficiently.
"The results of this Electrical report are consistent with what we see everyday in our work in other industries," said Ed Heon, CTO and Founder of Profile Systems. "Data errors are very costly and we are pleased that the study findings have encouraged IDEA to embrace Data Certification to help the industry save costs and increase sales by exchanging quality item data between manufactures and distributors."
The full Product Information Case Study is available for download at http://www.idea-inc.org/files/IDEA_Data_Synch_report%208-13-03b.pdf.