Report reveals significant data exchange errors

It is a fact of business in the 21st century that we are all pushed to provide and share data in more places across our internal and external networks. In our rush to be more communicative, however, some of the finer details necessary for the proper transfer of business data are being overlooked.

12/11/2003


It is a fact of business in the 21st century that we are all pushed to provide and share data in more places across our internal and external networks. In our rush to be more communicative, however, some of the finer details necessary for the proper transfer of business data are being overlooked.

According to a report released by the Industry Data Exchange Association , item data exchanged between manufacturers and distributors in the electrical industry contain significant errors. 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 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 electrical industry study focused on identifying specific data issues between pairs of trading partners consisting of a manufacturer and of one of their distributors. Ten manufacturers and eight distributors participated in the 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.

The circumstances highlighted in the report are not isolated to the electrical industry. 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 3/4% 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.

The full study is available for download by clicking here .

—David Greenfield, Editorial Director, Control Engineering, dgreenfield@reedbusiness.com





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