Mastering High Performance Through Data Management for ...

accenture

Mastering High Performance Through Data Management for ...

Mastering High Performance

Through Data Management for

Consumer Goods Companies


The competitive map for consumer

packaged goods companies is being

rapidly redrawn. Burgeoning economies—

particularly India and China—contribute

an increasing share to the world’s output,

trade and investment. The so-called triad

economy (United States, Europe and

Japan) is being replaced by a “multi-polar

world” where new sources of capital

and labor draw consumer goods players

looking to achieve high performance.

To navigate the road to growth in the

multi-polar world, consumer packaged

goods companies will increasingly

operate on a global scale; launching and

distributing profitable and compelling

products quickly and continuously,

while sustaining profitability on existing

product lines. Doing so demands

precise information distributed to an

ever widening value chain in order to

respond to increased customer demand

and a more diverse consumer group.

The integrity of this information relies

significantly on comprehensive, accurate

data that is integrated across the entire

enterprise including sales, marketing,

finance, supply chain and every function

in between.

Traditional approaches to information

and data management, which tend to be

manually driven and therefore vulnerable

to errors, fall short in this new paradigm.

So, while bad data used to be “just” an

internal issue, now, data inaccuracy has

implications across all suppliers, trading

partners and ultimately, customers. To

build a high-performance organization,

global consumer packaged goods

companies need to first establish a solid

foundation for data through efforts that

go beyond data cleansing or governance

programs. Accenture’s master data

management, or MDM, approach

views data holistically, isolating the

source of inaccuracies and putting data

management processes in place to enable

the business to operate seamlessly and

realize benefits across the end-to-end

value chain.

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.

Imagine the potential in

your own organization.


Another manufacturer

transferred product

information manually

between its distributor

representatives and

retailers. The result:

inaccurate UPC codes

and information riddled

with errors. The company

was consistently hit

with US$ 300,000 to

500,000 in annual

fines from its most

valued customers. After

harmonizing data, they

eradicated fines and saw

significant improvements

in retailer relations.

Foundation of high performance

Information is the lifeblood of global

consumer packaged goods companies.

Not only is it more critical than ever,

it is also more difficult to manage,

distribute and control. Data needs to

be consistent—providing “one version

of the truth”—across geographies

and functions. Significant value is

created and performance enhanced

throughout an organization when

high-quality data is available,

governed and used to interact and

operate differently.

Numerous amounts of sales are lost

every year due to incorrect prices or

erroneous item numbers exchanged

by trading partners. Worse yet, bad

data delays time-to-shelf—dulling

a company’s competitive edge

considerably resulting in losses in

revenue and margin.

Figure 1: An Accenture study found that benefits to improved data management go beyond

the obvious value chain and administration targets to include new product introduction,

customer service and sales.

Increase

Profitability

Value

Impact

Reduce Costs

(Improve Operations)

Increase Revenue

(Grow Business)

Functional

Impact

Value Chain

Administration

New Product

Introduction

Customer Service

Sales

Performance Metrics

(Process Area)

Reduced Inbound and Outbound Freight Costs

(Transportation)

Improved Productivity within Distribution Network

(Distribution)

Improved DSD Receiving Capabilities

(Store Operations)

Improved Productivity within Order and Item Administration

(Order Administration)

Reduced Out-Of Period Adjustments and Reconciliation

of Invoice and Coupon Discrepancies

(Accounting Administration)

Reduced Time from Item Entry to Shelf

(Speed to Market)

Reduced Instances of Coupon Rejections at Store Check-Out

(Customer Service)

Reduced Time Spent Addressing Item Data Issues

(Sales)

*From the study: “Synchronization—The Next Generation of Business Partnering How Leading Companies are Delivering

Actual Results” sponsored by the Food Marketing Institute (FMI), the Grocery Manufacturers Association (GMA), Wegmans

Food Markets and 1SYNC, and conducted by Accenture

What’s the real impact of achieving

consistent data? According to a study

conducted by Accenture*, consumer

packaged goods companies and

retailers alike reported benefits from

improved data management beyond the

obvious value chain and administrative

targets. (See Figure 1) Companies

surveyed reported significant additional

benefits in new product introduction,

optimized logistics, customer service

and sales. Even greater benefits were

reported by consumer packaged goods

companies involved in value-added

collaborative processes like RFID and

price synchronization.

Companies have also recognized the

value of data across all dimensions of

their marketing and sales functions,

in strategic and operational planning,

execution and evaluation. Integrating

internal and external data provides

companies with a 360 degree view of

Source of Benefits

% Improvement Over Current State

Retailer Manufacturers

6.5% 2 - 8%

1% 64%

9% Not Available

50% 2 - 67%

8% Not Available

23% 67%

40% Not Applicable

Not Available 25 - 55%


their customers, and helps them improve

marketing and sales planning, increase

trade marketing effectiveness, optimize

marketing and assortment mixes, and

ultimately drive a higher return on

investment.

Accenture’s approach to master data

management is holistic, and involves

an ongoing process of integrating

technology, people and processes.

Addressing only a single step in the

process—data cleansing as an example—

doesn’t 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.

Accenture brings a deep understanding

of the industry into each phase of

the MDM process. This perspective,

along with a robust set of proven

MDM methodologies and templates,

accelerates the MDM journey of our

clients. Our overall approach can be

broken into three phases: (See Figure 2)

Understand: Our work begins with

workshops aimed at gaining insight into

specific business goals. We help clients

articulate the value they hope to achieve

through master data management.

Typical goals range from gaining value

added collaborative processes like

product innovation, RFID, global data

synchronization, etc., to facilitating

mergers and acquisitions.

Define: Framed in the context of

business goals, we work with clients to

create an MDM strategy that embodies

a company’s future vision for data

management as well as the external

requirements from trading partners. This

helps define specific organizational areas

to be addressed, and create an enterprise

design for MDM that deals with the

client specific needs and issues. In this

phase we develop a holistic roadmap

for the people (data governance design),

processes (value targeting and roadmap)

and technology (technology enablement)

that together can tackle problems

rampant in the industry like inaccuracies

in: dimensions, weights, pricing, GTIN

assignments, UOM standardization and

customer/supplier master data.

Implement: The most difficult

step of the process is making an

MDM strategy a reality through the

implementation phase. This involves data

management process transformation,

recommending automation where

appropriate, integrating business rules,

cleansing existing data, implementing

measurements for compliance, and

most importantly synchronizing people

and business processes to ensure high

quality information on an ongoing

basis. The end result: cost savings are

achieved for categories such as sales

and marketing effectiveness, optimized

logistics, order fulfillment rates,

inventory management, out of stocks,

promotions, product returns, write-offs,

and invoice deductions. These benefits

can be measured for categories such

as customer loyalty, customer service,

channel relationship management,

product and brand management,

collaboration with partners and

suppliers, and employee productivity.

Although Accenture’s 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 most effectively address their

data challenges.

Figure 2: Accenture’s MDM process begins by understanding the value that a consumer

goods company hopes to generate through MDM, then defining and implementing an

approach that is tailored accordingly.

Understand

Stakeholder

Awareness and

Vision

Define

Enterprise Data

Strategy

Master data

management,

master high

performance

The rise of the multi-polar business

world heralds a sharp increase in

the complexity of doing business. To

compete, consumer goods companies

need to de-clutter the complexity of

fragmented and inconsistent master

data to grease the wheels of an

extended, global, machine.

Accenture helps companies do just that.

We work with our consumer packaged

goods clients to establish leading data

governance capabilities enabling them

to facilitate and maintain their MDM

vision. At the same time, we help assess

and prioritize the top data imperatives

to allow clients to focus on outcomes

that will yield the greatest value.

The result: more nimble supply chains,

increased return and effectiveness

of sales and marketing investments,

reduced back office costs, improved

collaboration and compliancy, and

increased growth.

Another manufacturer

corrected a weight error

on one item and saved

US$ 2.2 million in annual

transportation costs.

Data Governance

Design

Value Target and

Roadmap

Technology

Enablement

Implement

Data Governance

Mobilization

Data Improvement

Initiatives

Technology

Implementation


The multi-polar world and MDM implications*

The world is moving from an era of

geographically concentrated economic

power to one characterized by multiple

centers of economic activity. This

multi-polar shift does not represent a

departure from globalization, but rather

a deepening phase of it. With it comes

an increased economic interdependence,

and an even more acute focus on

collaboration and seamless partnering

as information flows from customers,

resources and employees, pumping

through the extended enterprise to

drive decision making. Through the lens

of the multi-polar world, master data

management moves from “nice to have”

to “mission critical.” Consumer packaged

goods companies, eager to drive growth

beyond saturated, traditional markets,

need to create an environment of flexible

collaboration that encompasses the

processes, technology and people that

create, maintain and drive information.

*From the 2007 Accenture Study: “The Rise of the Multi-Polar World”

Copyright © 2007 Accenture

All rights reserved.

Accenture, its logo, and

High Performance Delivered

are trademarks of Accenture.

This document makes reference to

trademarks that may be owned by

others. The use of such trademarks

herein is not an assertion of ownership

of such trademarks by Accenture and

is not intended to represent or imply

the existence of an association between

Accenture and the lawful owners of

such trademarks.

Accenture’s commitment to MDM is evident in our

organization: Accenture Information Management

Services is a global cross-industry organization

focused on bringing clients solutions to better manage

their business, interact with customers and make

strategic, financial and operational decisions. Working

across Accenture’s service lines and industry groups,

this network of 13,000 professionals specializes in

information management services including business

intelligence, portals and content management and data

management and architecture. For more information

about Accenture Information Management Services,

visit www.accenture.com/informationmanagement.

About Accenture

Accenture is a global management

consulting, technology services and

outsourcing company. Committed

to delivering innovation, Accenture

collaborates with its clients to help

them become high-performance

businesses and governments. With

deep industry and business process

expertise, broad global resources and

a proven track record, Accenture can

mobilize the right people, skills and

technologies to help clients improve

their performance. With approximately

170,000 people in 49 countries, the

company generated net revenues of

US$19.70 billion for the fiscal year

ended Aug. 31, 2007. Its home page is

www.accenture.com.

Through Accenture’s proven MDM

approach consumer goods companies

are equipped to meet the challenges

of the multi-polar world. To find out

more, contact:

Marco Ziegler

+1 312 693 5315

marco.ziegler@accenture.com

Jason K. Smith

+1 314 345 3199

jason.k.smith@accenture.com

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