Mastering Data Makes the Difference in Consumer Goods

Every product that is created, shipped and sold carries with it a host of data points. As partners in more and more countries join to collaborate in a multi-polar world, the amount of data increases and the chances for error balloon. A commitment to master data management (MDM) helps bring continued high performance in the demanding consumer-goods market.

The competitive map for consumer packaged goods (CPG) companies is rapidly being redrawn:

• Globalization has evolved. In the new "multi-polar world", fresh sources of capital and labor are drawing in consumer goods players looking to achieve high performance.
  
  
• Value chains are expanding, with more and more globally dispersed companies needing to exchange data seamlessly in real time.
  
  
• The world market is bringing increased customer demand from a more diverse consumer group.
  
  
• Competitive pressures demand that CPG companies master the process of launching and distributing new products quickly and continuously, while sustaining profitability on existing product lines.
  
  
• Today's decisions rely on comprehensive, accurate data that is integrated across the entire enterprise including sales, marketing, finance and supply chain.

In this world, master data management moves from "nice to have" to "mission critical." To build a high-performance business, global consumer packaged goods companies need to establish a solid foundation for data management through efforts that go beyond data cleansing or governance programs.

Though consistent data is more critical than ever for global consumer packaged goods companies, it is also more difficult to manage, distribute and control. Incorrect prices and item numbers exchanged by trading partners cause numerous sales losses every year. Worse yet, bad data delays time-to-shelf—dulling the competitive edge and resulting in lost revenue and margin.

For one manufacturer, the problem was a manual process for transferring product information between its distributor representatives and retailers. Inaccurate UPC codes and information riddled with errors caused US$300,000 to US$500,000 in annual fines from its most valued customers. By harmonizing data, the manufacturer ended the fines and improved retailer relations.

According to an Accenture study, both CPG companies and retailers reported benefits from improved data management beyond the obvious value chain and administrative targets. Companies saw significant benefits in new product introduction, logistics, customer service and sales. Even greater benefits were reported in value-added collaborative processes like RFID and price synchronization.

CPG companies are bringing together internal and external data across all dimensions of their marketing and sales functions, in strategic and operational planning, execution and evaluation. Creating a 360-degree view of customers helps improve marketing and sales planning, increase trade marketing effectiveness, optimize marketing and assortment mixes, and ultimately drive a higher return on investment.

How big an impact does MDM really have? Consider this: By making just one correction to the weight of a product SKU, one consumer packaged goods client was able to add an additional pallet to every truckload of the SKU that it shipped.

Master data management requires an ongoing process of integrating technology, people and processes. Addressing only a single step in the process—data cleansing as an example—does not ensure that the issue will be fully resolved and the data will be kept clean. Accenture works with consumer packaged goods companies to assess the root of data problems and address the process and people issues that are typically at the heart of the issue.

Our overall approach can be broken into three phases:

1. Understand. A series of workshops establishes specific business goals and the value companies hope to achieve through master data management. Typical goals involve improving collaborative processes like product innovation, RFID and global data synchronization.
   
   
2. Define. From the business goals we work with our client to develop an MDM strategy that incorporates both the company's vision and any requirements from trading partners. This defines specific organizational areas to be addressed, creates an enterprise design for MDM and includes a road map for people, processes and technology.
   
   
3. Implement. The MDM strategy becomes a reality through data management process transformation, including automation where appropriate, integrating business rules, cleansing existing data and implementing measurements for compliance. Most important is to synchronize people and business processes to ensure high-quality information on an ongoing basis.

Although this approach is flexible enough to meet a company anywhere along their MDM journey, we recommend that consumer packaged goods companies travel through each phase to address their data challenges most effectively. The end result is measurable improvement in customer loyalty, customer service, channel relationship management, product and brand management, collaboration with partners and suppliers and employee productivity.

Learn about Accenture's master data management services.