Data between trading partners doesnt match up, which creates all sorts of problems – and wastes millions of dollars.
Imagine an upside-down world in which everything you say is misinterpreted or misunderstood by nearly everyone with whom you come in contact.
It wouldn’t be very fun. Imagine ordering a hamburger and getting a hot dog. Or buying a plane ticket to Syracuse and ending up in Singapore. Some days it sure feels that way, but in the automotive aftermarket, its par for the course.
Our industry is a parts industry, but its more than that. Its a data industry. Without data, parts dont move off of your shelves.
Across the industry, we have a problem with non-standardized product data. Critical information like price, quantity and unit of measure dont match up between trading partners. WDs, retailers and manufacturers dont agree on what a part number should look like (does it have dashes or no dashes?) or what a minimum order quantity is (it is one unit or one pallet?) or even what to call something (is it Chevy or Chevrolet?).
To get a better handle on the depth of this problem, the Automotive Aftermarket Industry Association (AAIA) conducted a study to determine the extent to which this data doesnt match up. AAIA asked six suppliers and six distributors to submit a "significant and meaningful" product line. The average line had about 2,000 to 3,000 SKUs. AAIA then tried to match up important items such as part description, minimum order quantity, price and part number between the supplier and its customer.
The results were disturbing. The six manufacturers, for example, provided price data for a total of 26,873 part numbers in total. More than half of those did not match records in their own customers files.
The six distributors provided information for 14,509 part numbers, 7 percent of which were not found in the suppliers files.
How can the industry embrace essential technologies like e-commerce and universal bar coding when trading partner price data doesnt match up? And remember, this study just examined "significant and meaningful" lines; the data for other less significant lines must be in even worse shape.
All of this, of course, creates purchase errors, which ultimately cost money. The Electrical Industry Data Exchange Association conducted a six-month study to determine how much these errors cost. They found that between the distributor and vendor, $170,000 is wasted for every $10 million in business done between the two. As AAIAs Scott Luckett put it, "…1.7 percent is lying around out there due to data errors….and when you apply 1.7 percent to the aftermarket volume, you get a very, very, very big number."
Luckett should know. Hes heading up a committee that is trying to eliminate these mix ups. The Product Information Exchange Standard, or simply PIES, provides an open standard that the entire industry can use to clean its data.
Lets hope the industry gets its data in order. Otherwise, you may just end up with a pallet of product, when you really only needed one. One unit, that is.