In this Issue:
Manufacturers and consumer packaged goods (CPG) firms no longer have a choice: Item data must conform to mandates from large retailers such as Wal-Mart, Lowe's, and Home Depot. IT executives in the supply chain will have to face some tough decisions on data synchronization.
Typically item data resides in ERP systems, so one option is to synchronize all this ERP data with the new, required standards. By far the most important standard is the Uniform Commercial Code (UCC), which allows suppliers and retailers to use the UCCnet data pool. So tuning your ERP to UCCnet might sound like a good idea.
But George Lawrie, analyst with Forrester Research, says ERP just isn't up to the task. "ERP data tells me how to build an item and how to bill for it. A typical ERP item might have about 10 to 15 attributes. But retailers require at least 151 core UCC standard attributes per item."
In addition UCC standards tend to be more dynamic, and they are still evolving. "Do you want to update all your ERP systems every time there is a change to the UCC specifications?" Lawrie asks. "I don't think so. ERP data should be viewed as a subset of UCC."
Instead of trying to adapt ERP to the brave new world of global item data repositories, CPG firms and manufacturers should think in terms of isolating and abstracting all this new data. Some vendors are already pushing a new category of product to do just this, product information management (PIM) software. PIM products vary, but most are designed to consolidate item data in one place.
AMR Research analyst Kara Romanow warns, however, against letting vendors dictate your strategy. An important question to ask, she says, is "Do you need a single, new data repository inside the firewall?" If so, PIM vendors such as Trigo, recently acquired by IBM, and Haht Commerce, recently acquired by Global eXchange Services, can help you build it.
However, a new piece of packaged software may not be necessary. Take Q.E.P. Company, for example. "About a year ago the letters started to come in from our major retail customers such as Home Depot and Lowe's that we needed to get compliant with UCCnet," says Ron Stich, UCCnet coordinator for Q.E.P., a manufacturer of flooring tools.
Already a customer of Sterling Commerce, Q.E.P. used Sterling's connectivity and integration expertise to plug into UCCnet. Q.E.P. essentially built a PIM tool in-house. "We knew we needed a superstructure, a kind of gatekeeper for our item data," says Stich. "We were fortunate enough to have a brilliant RPG [Report Program Generator] programmer who said, 'I can build this.'"
Q.E.P. retains multiple ERP systems, but now any new item data must go through the new catalog, enforcing consistency and compliance with UCCnet and mandates from the firm's big retail customers. Stich says it was largely a matter of discipline, something Michael Dominy, analyst with the Yankee Group, emphasizes. "Data synchronization does not have to be a huge investment like ERP," says Dominy. It really is more about discipline than technology.
Stephen Levandowski, CTO of Central Garden and Pet Co. recognizes this. Central is essentially a holding company, consisting of more than 20 different lawn, garden, and pet supply firms. "We chose Haht Commerce to create a central platform to ensure compliance with Wal-Mart UCCnet mandates," says Levandowski.
The discipline comes in requiring all the business units to feed item data into the Haht repository. But the architecture leaves existing ERP systems intact. "We use a subset of the Haht PIM features," says Levandowski.
In a recent Forrester report, Lawrie refers to the "data synchronization journey," and advises manufacturers and CPG firms to look beyond current mandates. Levandowski certainly is. "RFID [radio frequency identification] is coming," he says, "We are already thinking about how to leverage our PIM work for that."
Mark Leon is a freelance business and technology reporter.