A recent article in The Wall Street Journal (subscription required) describes challenges being faced by some mail-order catalog providers.  While the focus of the article primarily revolves around the housing downturn and the rising costs associated with paper and postage, I read between the lines to draw my own takeaways.

• The evolution internet ordering for everything from household goods to apparel and accessories has certainly had its own impact on the mail-order market.
• Consumers’ need for rich content – both structured and unstructured – continues to increase.  For many purchases, consumers want incredible detail about the products they are evaluating.  From 360-degree views of clothing, shoes, and cars to detailed specifications for digital and video cameras, the process of making a purchasing decision can be highly sophisticated.
• Catalogs are one way of delivering detailed product information to consumers, but the Internet has the same capabilities, at a lower total cost over time.  In fact, many companies replicate their print catalog online, page-by-page in most cases.
• Many mail-order catalogs have actually stopped including order forms.  Instructions direct you to their web site or their toll-free number.  So, while they are reaching out to you via mail, they are typically not expecting you to return the favor!

Personally, I still like receiving catalogs in the mail.  It makes me feel like someone cares!  No one else sends me anything but credit card offers, anyway.  The pages of a Williams-Sonoma catalog are laid out in such a way that I believe I need everything they’re selling.  Plus, the mouth-watering recipes are wonderful and I believe that I will try to make every one (though I rarely seem to find the time – I’m spending too much of it reading their catalog)!  But truthfully, I rarely make a purchase through the catalog.  I will either go to their web site or actually head to the store for the first-person experience (yes, some of us still do venture out to brick-and-mortar every once in a while)!

Perhaps we will see a move towards mail-order postcards – just so the companies can remind you they exist and are interested in your business.  The postcard will direct you to their web site, where you can find out everything from the material specifications of the product to all of the other wonderful items the product is best paired with.

Because of this, the need for trading partners to collaborate on rich, web-ready content is only going to grow.  Retailers need a way to compel consumers to purchase, and who better to rely on then their supplier community – the resident experts on all the features and benefits of the widgets, gadgets, and must-have items they are churning out.  Be prepared – I know we have been talking about this for a long time, but image exchange, information sharing of extended product characteristics, and supplier created advertising copy are going to be required by retailers and consumers soon – if not already!

I have been working in our Bangalore office this week.  It has been an exciting week so far – my first trip to India, and what more could I ask for than to be spending time in their own “silicon valley”?  I must say that the employees here have been so hospitable, the hotel we are staying in is amazing, and there is no shortage of foods to fit all tastes!

Bangalore is certainly the epitome of growth.  Just next door to where I sit, a large building is under construction, complete with jackhammers, cement mixers, and a large staff of workers hauling dirt and breaking down old tree stumps!  It is the same up and down the main streets here.  Construction of the metro transit system is underway, and though still probably a couple of years from completion, it is desperately needed.  Traffic is intense, and drivers use their horns far more than in the U.S. – yet with no road rage!  Unfortunately, people also pretty much drive anywhere they’d like on the road, and lane lines are merely a recommendation, it seems.

Coincidentally, The Washington Post published an article yesterday on India’s Young Spenders.  Based on the relevance given my location this week, I had to take a peek.  What I read simply reminds me that consumers are everywhere, and the demand for “stuff” – things like flat screen TV’s, washing machines, iPods, sunglasses, and cell phones – continues to increase.

Two weeks ago, a colleague and I had the good fortune to meet with the CEO of GS1 Pakistan.  We learned that the organization was formed about a year ago at the request of global retailer Metro, who recently entered the Pakistani marketplace.  Metro requires that their suppliers use the GTIN system for product identification and barcode all products.  They would also like to see data synchronization and electronic data interchange implemented in order to achieve the supply chain efficiencies such technologies have netted elsewhere.  Since Pakistan didn’t have a GS1 member organization, one was formed in order to manage GTIN prefix assignment and to assist in moving e-commerce adoption forward.  They are now in the throes of educating themselves on the world of B2B integration and bringing the Pakistani consumer goods industry into the future.  All this because consumers are looking for the most modern, the most diverse, and the most readily available products to buy.

Global reach is truly achievable.  Consumers throughout the world are ready for the latest gadgets that manufacturers have to offer.  The young generation is clamoring for “toys” and “stuff”.  And the need for B2B solutions to help trading partners collaborate and continue to tap into the eager consumer market has never been greater.

Well-known research firm AMR released their Supply Chain Top 25 last month.  While many household names appear on the list, particularly in the personal technology and consumer goods sectors, the absence of companies in the department store and fashion categories is powerfully felt by loyal followers like me.

Kudos to Nike for making it three years in a row, but the air up there must be lonely!  I wonder if the reason that more apparel companies don’t appear on the list is due to the high product turnover they experience?  Many fashion designers produce 4 to 5 seasons of product each year, resulting in the one‑time production of many goods.  Perhaps it’s difficult to achieve supply chain efficiency when you are constantly changing your product mix.  Alternatively, it could possibly be that supply chains in clothing and accessories are highly inefficient, maybe because fall fashions are shown in spring, then marketed to buyers, then produced and shipped, then made available on the sales floor, creating an extremely loooong time from concept to consumer.

While I don’t claim to be an expert on why the list is highly tipped in favor of fast moving consumer goods, I do know that I still enjoy walking into a Dillard’s or Kohl’s store and finding a broad variety of clothes and footwear to choose from, and the fact that there are always such good discounts on the markdown racks.  (So maybe the real reason department store supply chains don’t qualify is due to inventory planning issues?)  Top 25 aside, I love a good bargain!

For companies who have synchronized their data with a couple of trading partners and consider themselves “done with data sync” – it’s time to think again!  Most of us realize that any global topic that receives ongoing media attention will impact us, at least in some small way, and green initiatives are no different.

You have probably heard about many companies, and even people, discussing their efforts to reduce their carbon footprints through things such as utilizing renewable energy sources, reducing waste, and living in ways that help to sustain, rather than erode, our environment.

Certainly data synchronization is not impacted by such a conversation, you suggest!  But I beg to differ.  ADWEEK recently published an article entitled “One to Grow On,” that highlights Wal-Mart’s aggressive efforts to push sustainability forward, primarily in the area of reducing product packaging.  This likely means that suppliers will need to revisit their entire approach to packaging – from materials to processes.  And resulting changes in packaging will need to be communicated to trading partners, as the logistics implications – case and pallet structure changes, differing order quantity multiples, and truck volume calculation updates – will be significant.

We often comment in our blogs about the growing demand for more product information, but we should not neglect that existing product data changes, as well.  And the rate of change on particular attributes may increase as the public eye shifts its attention from one area of the manufacturing sector to another.

The fact that Wal-Mart will be scorecarding suppliers in the area of sustainable packaging deserves mention, as we all know that if something is important to a large retailer, then it becomes important to the executives of the suppliers to that trading partner!  So, be sure to keep pace with the opinions and direction of your trading partners as sustainability takes center stage in the global trade arena – and keep your item attributes up to date!  Don’t approach data synchronization as “one and done”.  For better or worse, it’s more like a merry-go-round that pauses along the way, but never truly stops.

At 29,028 feet and situated between Tibet and Nepal, Mount Everest today became a metaphor for data synchronization – in my mind, anyway.

Consumer Goods Technology magazine recently published part 2 of the results of research they performed in conjunction with GS1 US regarding adoption of global e-commerce standards.  While somewhat disappointing, I was not surprised to learn that over half of the respondents reported that less than 50% of their orders are based on synchronized data.

The article also indicated that there is a significant disparity between adoption within large, multinational organizations and smaller companies:  “The bigger firms account for the higher adoption levels while smaller companies still don’t embrace standards at all, resulting in an “all-or-nothing” scenario.”  I am not sure I agree with the statement, though I didn’t participate in the research and can’t say where this conclusion originated. What I do know, from the many small- to medium-size businesses (SMBs) I work with on a daily basis, is that they have a few distinct challenges that may or may not be shared by their larger competitors: 

·         They have extremely limited budgets and resources (many SMBs have a “one-person” IT department)

·         They are generally driven by hard mandates with monetary penalties  and tend to ignore “soft” requests for compliance

·         They do not have good return-on-investment (ROI) tools that are believable on a smaller scale.  For example, a large manufacturer recently presented that they had reduced freight costs by over $1 million dollars for one product they sell and had taken 90 trucks off the road by implementing rigorous data quality and data synchronization.  A small company may not even ship 90 truckloads of all of their products through the course of a year!

·         Many data synchronization initiatives focus on the “big fish” – large successes produce publicity buzz, and the smaller players are left to swim aimlessly with little education or implementation support  

In other words, they are facing their own Mount Everest and don’t have all the tools they need to successfully complete the climb.  What this means to me is that our mandate as standards organizations, technology providers, solution partners, and data synchronization fanatics is that we need to give some love to the thousands of SMBs out there waiting for a champion to bring their cause to the forefront.  We need to become sherpas and lead the charge up the mountain! 

I am making it my personal goal to push the SMB agenda this year – even if it only results in calling attention to their plight in every tradeshow, conference call, and global standards meeting I attend – I intend to be known as “that wacky SMB data sync activist”.  Well, something less colorful might be better, but increased public awareness is my objective, and I’ll take it any way I can get it.  Due to its proximity to China, Mount Everest has found itself featured in the political firestorm surrounding the Olympics.  I hope to take the cause of the SMB and shine the spotlight on it in a similar, if less sensational manner. 

Only 660 people have successfully climbed Mount Everest.  So, with over 15,000 participants, the Global Data Synchronization Network (GDSN) has already well surpassed the lofty dream of those who wish to scale the world’s tallest mountain.  However, with tens of thousands of additional companies around the globe still to make the climb, and the fact that the standards will continue to evolve, potentially making it more difficult as time passes (Mount Everest is also rumored to be growing a few millimeters a year due to geological factors), we can’t sit at base camp and watch the opportunity pass us by.  We need to pack on our gear – cleansed data, trading partner requirements, and strong enthusiasm – and head for the summit – a successful global data synchronization implementation!

For as much as the word collaborate elicits sighs and thoughts of “not that cliché word again!”, outside of the B2B integration space, most people don’t even know what it means.  Most of my family and friends tell people that I work in Accounting.  I guess the explanation that I help gather customer requirements for developing on demand software applications that allow trading partners to collaborate effectively and realize increased supply chain efficiency doesn’t really go down like a spoonful of sugar!

The power of collaboration within a trading partner community should not be underestimated.  Global Commerce Initiative (GCI) recently published a newsletter  updating the user community on the results of their first year’s work toward their 2016 value chain vision.  Two of the three key challenges they are attempting to address don’t surprise me, but maybe if you fall into the camp of covering your ears every time someone starts to say “collab…,” you might be somewhat shocked to know what they are:

1.       The industry should develop new ways of working together (emphasis THEIRS)
2.       The industry should more readily and freely share information (ditto)

The newsletter definitely warrants reading, as it touches on all the key buzz words and hot topics being bandied about in the B2B space today.  Many companies are concerned with social responsibility, sustainability, and bridging the cultural divide as well as cutting cost, increasing revenue, and improving time to market for new products and services.  GCI has done a great job of folding all of these disparate objectives into a unified vision.  And GCI set such a great example in the past several years of living the “working together” mantra, as they brought end user companies together to build input into the GS1 system of supply chain standards.

It’s not so much that they are giving us a new revelation – for example, they state that “information is the life blood of the value chain.”  I have always believed this to be true (anyone who’s read my past blog entries know this is an understatement).  However, when a group of companies meet together to talk about achieving a long-term value chain vision, and still arrive at this critical statement, it serves as a reminder that we often forget the basics as we try to blaze new frontiers in our B2B programs.  If we have fooled ourselves into thinking that we have already gotten it right – that information is always accurate across all of our internal systems, synchronized with all of our trading partners, and proliferating throughout all of our downstream supply chain transactions, we need to pinch ourselves a step back into reality.  We have a long way to go.  Just review the “current practices” bullets provided by GCI and you will see that a lot hasn’t yet changed in how we manage data.

What I take comfort in is that GCI and other groups have just as much passion about improving the foundations of supply chain collaboration as I do.  And they have participation from many multinational suppliers and retailers who join in their vision.  I look forward to 2016, when we have hopefully achieved the lofty goals they have set – and then perhaps I can retire early with a smile on my face!

2008 will be the year when companies finally understand that the real challenge holding their companies back in the automated supply chain is lack of data quality.  Information integrity issues associated with products and transactions reduce the ability of an organization to make appropriate short and long term decisions.  Corporations have been hording data for years while analysts and consultants told them to do something with it.  Now that business intelligence solutions are taking a primary place in the spotlight, companies are realizing that the data they’ve been hording is flawed.  And so is the data they are using to run their business on a day to day basis.

For years the retail and CPG space have struggled with new ways to share product data, only to be dismayed by the exorbitant costs and miniscule returns.  High-tech manufacturers scoff at the idea of trying to adopt the Global Data Synchronization Network because they see it for what it is: just another way, using another technology, to share data.  Sharing data isn’t the issue.  Making sure companies have complete and accurate data, and then keeping it that way, is the real challenge.

Leading companies will step up to the plate in 2008 and address the data quality issues by taking the first steps towards implementing solid B2B Data Management programs.  They will follow in the steps of a few groundbreakers that have already paved the way.  These data governance initiatives will need to address cultural, process and technical roadblocks that keep companies from successful supply chain execution.   Most important will be changing the cultural aspect, as data accuracy will need to become part of the fabric of the business.  The processes can be defined and supported by technology, but adherence and commitment will be the key to eliminating data quality problems.

While numerous tools have been introduced to address information management over the past several years, the focus of the tools themselves, those selling the tools, and the analysts covering them have been primarily on utilizing the tools to provide workflow for managing the flow of a subset of data within an enterprise (think Product Information Management in the B2B Data Management space).  Now we are starting to see (Gartner 30 November 2007 - Methodologies: Blueprints for Success With Data Quality Improvement) the focus of analysts shift to actually addressing data quality.  Smart executives will listen because this is something they can get their hands around.  If the decisions they are making are based on flawed data, if the financial statements they are signing are based on inaccurate numbers, if the deals they are agreeing too might not be what they think they are, then they and their companies are in trouble.

I was recently in a fast-food drive through – a rare indulgence I would have avoided altogether were it not for ravenous hunger and a late hour.  I won’t say which restaurant it was, protecting the McInnocent and all – but the driver of the car in front of me ordered a combo meal and said, “super size, please.”  Having watched the movie Super Size Me and hearing about the fallout, I knew this offering no longer appeared on the menu, but I guess, not unlike everyone’s favorite corner coffee monopoly, experienced users know they can ask for things not on the menu.

This episode got me thinking about product information – please remember it’s a lifelong obsession with me.  Two key things came to mind: 1) both retail trading partners and consumers are asking suppliers to “super size” their product records, and 2) many of them also want things not on the menu.

Elaborate, you say?  Thank you for asking, I will!  One of the key challenges I have seen over the last several years with data synchronization is that suppliers are being asked for more, and more, and MORE information.  Their customers and end consumers want so much data – logistics information , installation information, usage information , features and benefits, regulatory compliance information, etc., etc., etc. (be sure to read this last line with your Yul Brynner The King and I voice).  Really, the list does go on, I’ve just begun to scratch the surface.  I was recently at a conference where a very large retailer gave a presentation on their efforts to begin gathering data about sustainability (the new buzzword for environmental friendliness).  It was fascinating actually, but made me wonder how suppliers will collect such information, let alone communicate it to their trading partners.  Just add it to the ever-growing – SUPER SIZE – list, I suppose.

The other thing that seems to be daunting is that every trading partner is asking for something different.  Retailers need to maintain differentiation, so they don’t always put all of their requirements out in the public domain.  They choose to use proprietary portals or closed community concepts to gather data that only they are interested in, and of course they don’t want their competitors to know what they’re asking for, so suppliers are plugging in to multiple locations to satisfy each important customer.  The irony is, that when a group sits down together across an industry and starts honestly assessing these “individual needs,” they discover that 90%+ of the requested attributes are the same across different partners – the names may be a little different, and the formats – one uses a code list and one uses a free text attribute, etc., etc., etc.  But the end goal is the same – give me everything I need to know (and the consumer needs to know as well) so I can setup this item, purchase it, and market it.

It’s not that these new requests and requirements are unrealistic – there are business purposes for the information and as I have highlighted in the past, consumers are hungry for it as well – the Internet is, after all, the greatest place to comparison shop.  The quandary is how a supplier can meet and exceed the expectations of everyone downstream in the supply chain and still remain profitable and productive.  The good news is that there are a lot of people (besides me) that are constantly working on ways to provide answers to the tough questions about B2B data aggregation, management and dissemination.  And it’s a good thing, because suppliers need a break today!

Efforts to further the practices of data quality and data synchronization have received worldwide attention.  Groups of people gather on weekly conference calls and attend physical meetings to talk about global standards for exchanging accurate product information.  I’m sure by now you have a mental image of thousands of people wandering around in Star Trek-like uniforms looking for members of like-kind, anxious to share stories.  “Did you hear the one about what happens when you try to stack bags of semi-sweet chocolate chips on store shelf with the package front facing the aisle instead of the ceiling?  Those package dimensions really sent me for a loop on that one!”  Another groupie chimes in with, “oh yea, that’s nothing!  Have you ever taken a soda out of the six pack ring and seen the confusion that ensues when a grocery store cashier tries to scan it for a single purchase?”

It really isn’t like that at all.  We are a group of extremely normal (and intelligent) people who are on a mission to see that businesses can achieve the ever-elusive goal of maximum supply chain efficiency.  We believe that if you can exchange product information accurately and quickly and keep that information up to date over time, you can ensure that all of your downstream supply chain transactions will also be correct.  This leads to faster purchase order processing, swift shipping and transit, speedy movement of product from truck to store to selling floor, prompt remittance from retailer to supplier (with less chargebacks deducted from the payment, by the way), and rapid receipt of the latest must-have products by the consumer.  When put that way, don’t you want to sign up to be part of furthering this utopia, also?

Okay, perhaps it’s a little dry arguing whether a particular product attribute should be free text or be restricted by a code list of acceptable values.  And sometimes I’ve seen conversations where word-smithing three sentences took two hours.  Global standards rely on consensus and voluntary participation.  Since the participants volunteer, each is entitled to his or her opinion and the right to share it, and consensus sometimes takes a while.

One organization with which GXS participates extensively is GS1.  GS1 manages the GS1 system, a set of standards to improve supply chain management employed by companies in over 20 different industry sectors worldwide.  GS1’s global office operates out of the U.S. and
Europe, with over 104 participating countries known as membership organizations (MOs).  GXS has partnered with over 25% of these MOs, 27 countries, to provide the underlying data pool technology for their data synchronization solutions.  While countries like the United Kingdom, Spain and Australia are well down the path of rolling out data synchronization initiatives, it is our hope that one day others like Zimbabwe and Myanmar will be able to follow in their footsteps due to the extensive groundwork being laid by today’s standards working groups.

One ambitious participant in the global data quality arena decided that a music video would be a great medium to promote our cause.  Thanks to the fact that YouTube is now basically ubiquitous, you can escape from my long‑winded ramblings and take a peek for yourself at his data quality rap.  I hope you will find it entertaining and thought-provoking, as well as remember that data quality supporters know how to have fun, too!

The interesting thing about a root canal is that while everyone approaches the procedure with trepidation, it’s actually not that bad.  And once the process is over with, you feel so much better.  What tends to be overlooked is that the pain associated with a root canal is really about the bad tooth that hurts so much before you go in to get it fixed.

The same can be said for bad data.  It’s like an abscess that radiates throughout the organization, leading to lost orders, missed shipments, irreversible deductions, and grouchy executives – tell me those things aren’t painful!  Yet many companies are horrified by the idea that they should engage in a data clean up effort.  If you compare it to a root canal, first of all you’ll get a few chuckles from the cross-functional team, and then you can point out my astute observation that all the pain is actually already going on.  That if you engage in a data quality initiative, it would actually be a lot less painful, and in the end, when the data is clean and continues to be monitored, corporate life can become a state of near-bliss (okay, well that’s probably stretching it a bit).

The GXS community relies upon data to transact business all over the world.  Supply chain processes, the order to cash lifecycle, financial services transactions – they all share and consume large amounts of data.  Without the tools to ensure the integrity of the data, companies who implement electronic methods of communication are just subscribing to the now oft-spoken adage of “garbage in, garbage out FASTER.”  I am certainly not an advocate of this, but I will tell you that it takes partnering by all of the parties involved in efforts to improve supply chain efficiency – the manufacturers, suppliers, software providers, and retailers.  The attempt to achieve the exchange of accurate and up to date information does not happen passively.  It requires digging to the “root” of the problem, rather than just putting band-aids on the symptoms.  Similarly, motrin is a wonderful pain reliever for a toothache, but the pain comes shooting back 4 to 6 hours later – hence the reason the root canal is the only viable long-term solution.

I recently read an article about one apparel manufacturer that saw a drastic reduction in their compliance charges.  By creating a team of people to manage issues internally, to assess inter-organization challenges, and to partner with key customers, they achieved incredible gains.  The clip doesn’t reference any trips to the dentist, but I am pretty sure the participants could at least concede I might be partially right in comparing their efforts to that dreaded trip to the dental chair!