16. Master Data Alignment and Item Synchronization

Master data alignment is sharing data within the supply chain between the trading partners. A common feature used between partners is electronic catalogs. The supplier and distributor and/or retailer can share item information for their catalogs. This is also much more than just sending data for a catalog change. This allows companies to share data to minimize the discrepancies of separate silos.

Item data accuracy is paramount in today’s era of increased collaboration. These are some applications that require accuracy:

• Product Life Cycle Management (PLM)—PLM is a strategic business approach that applies a consistent set of business solutions in support of the collaborative creation, management, dissemination, and use of product definition information across the extended enterprise from product concept to end of life. It integrates people, processes, business systems, and information to create an environment in which companies can improve the efficiency and effectiveness of their product development programs. Normally, 50% to 85% of the cost of the product is committed in the design phase. Make sure the information is accurate at this phase.

• Digital Manufacturing—Digital Manufacturing represents an integrated suite of PLM tools that supports manufacturing process design, tool design, plant layout, and visualization through powerful virtual simulation tools that allow the manufacturing engineer to validate and optimize the manufacturing.

• Just in Time (JIT)—Just in Time programs ensure that there is no interruption in the supply chain. All data must be accurate and available in real time. As in manufacturing, the merchandise is delivered at the point it is needed at the assembly line.

• Efficient Consumer Response (ECR)—Creates an environment and tools that enable the distributor and supplier trading partners to work collaboratively to deliver superior value on the products and services they offer consumers. The benefits that retailers realized from Quick Response include the use of bar coding, data warehousing, EDI, RF, and RFID. The grocery industry initiated ECR in the 1990s. The requirements of ECR are efficient assortment, efficient replenishment, efficient new product development, and efficient promotions.

The Global Data Synchronization (GDS) and Electronic Product Code (EPC) are used together. Global data synchronization is an industry-wide initiative to create standardized formats for product information that can be shared globally and electronically by manufacturers, distributors, and retailers. This information would be housed in one data source. The EPC is the electronic product code for each item to identify the product by its unique number.

The number for the EPC is broken into four distinct fields. The first is the header. The second is the manager, which is the vendor code. The third is the SKU code, which could be used as a UPC number. The fourth is the serial numbers, which give each product with the same UPC number a unique number, or DNA. Each product is now unique.

If 12 bottles have the same UPC number, they will each have unique serialized numbers. If an RFID gun scans a carton of the same 12 bottles, each will be considered unique. This option can’t be beat for productivity in inventory counting. The EPC is used in the concept of RFID, discussed throughout the book. The point here is that data is exploding. After it is sent out globally, it can’t be taken back, so it must be of the highest quality and entirely accurate.

The accuracy and consistent data sharing for product and production details is lacking today. In fact, Capgemini’s research found that more than half of the items in company systems contain incorrect data (for example, wrong values and duplicate or obsolete entries). Master data alignment is about improving this situation by having the product data across the various business systems consistent, complete, accurate, and available in a timely manner.

To make all this possible on a global scale, UCCnet, which is a subsidiary of the Uniform Code Council, was created. This is a not-for-profit company whose function is to facilitate industry-wide sharing of data by trading partners. The manufacturers who subscribe to UCCnet download their catalog information to the UCCnet’s Global Registry. This information is a comprehensive detail of catalog information, as shown in Table 16-1. This table is a summary of the item configuration that can be saved in the data pool.

Table 16-1. A Partial List of the Data Stored in a Data Pool

The advantage of this scheme is that it makes the supply chain more efficient and accurate. Let’s take the example of the manufacturer. They have to send out price changes, new items, or catalog changes to all the customers worldwide. This is a daunting task. Today, with the B2B commerce sites, some larger retailers have portals connecting to the suppliers to send item detail information back and forth. An advantage is that the data on the data pool is straight from the supplier. It should be error free. This eliminated the errors in cataloging and also in customer pricing discrepancies. One of the biggest problems in out-of-stocks occurred when a supplier discontinued an item. The supplier hardly ever gave notice on a global scale, leaving the customers unaware of the change. Now the cancellation date is published in advance and sent to the data pool.

The global view of item synchronization is that all manufacturer information is sent to the Global Registry (GS1). GS1 stands for Global Standard 1 and it is the registry for all information to be stored in the common data pool. It gives the permission for the source, usually the supplier, to store the data, and for the recipient, usually the retailer, to receive the data stored globally. This creates a network connecting trading partners all over the world. It is truly a one-stop opportunity. The information is saved in a large information base called a data pool. The data pools are interoperable electronic catalogs of standard master data. This data consists of the master data information shown in Table 16-1. This is only a partial list of the data that can be stored in the data pool.

The synchronized data will be used to populate forms or automate processes with the corporations. These processes need accurate and timely information to make them world-class. The following list shows some of the processes that can be automated with data synchronization:

New items can be added to the catalogs with greater accuracy and speed. This requires accurate pricing, cube, weight, bullet descriptions, return code authorization, vendor number, unit, our cost, retail, height, width, length, UPC number, less case, inner pack, full case, and so on.

Claims are a very important area needing accurate data. Otherwise, the claim is never settled or is settled wrongly. This is an area of great frustration for the customer. Item synchronization will always show the prices and promotional prices at select periods of time.

Price Changes can be automated and sent out to all retailers at the same time. All the price changes are from a common source, which eliminates the chance of error.

Shipping Errors are easily rectified with the accurate information. Many times an item is set up as a subitem from the supplier. The retailer may wonder why they got the product. This notifies the customer of the exact timing of the change.

File Maintenance can be done through downloading new information from the supplier. It can be item- or vendor-related detail. The information can range from change in cost to change in bulletined descriptions for the retailer files or electronic catalog.

Pricing and Dating from everyday low price or promotional periods are downloaded from the supplier to the data pool and eventually to the subscriber or the retailer. The extended dating for each sale can be downloaded for each promotion throughout the year. It is critical to keep this information synchronized from the supplier to the retailer.

Return Authorization is given by the supplier and this can change in time. Certain items in the line may have different return authorization codes. Some returns are merely marked as destroy and the supplier will refund the retailer.

Non-Stock Order Form is the order form used when the dealer or customer buys merchandise from the supplier that the distributor does not stock. These are usually direct to store delivery when a distributor is involved.

Receiving Reports can perform the triple-check for accuracy. The invoice will be checked against what the receiving report shows as the price. Then the purchase order will be checked against the receiving reports price. This minimizes the error rate and all prices are sent electronically from the data pool.

Credit Memo can show the amount of credit from the supplier for certain conditions. There may be adjustments for sale or everyday low pricing.

Catalog Cut & Description is for the companies using the electronic catalog or for promotions to be sent out as fliers. The information is sent and downloaded each time there is a change. This definitely has a large effect on the productivity of the catalog department.

Market Specials Form is used when the retailer or distributor has an offsite event for promotions. The customers may meet in a convention center for the suppliers to demonstrate what is new in their line for the next year. These are special prices and terms. The forms will automatically be filled out at the distributor’s site because the data has been downloaded automatically to the distributor’s item files. All they have to do now is print the form off for the customer and it is prepopulated with the correct information. This is definitely a step in the right direction for the productivity and Green Savings.

The next part on this master data alignment scheme after global data registry is to have unique numbers for all the items listed in the EAN.UCC system. The EAN stands for European Article Number and it is the counterpart of the UCC. With the introduction of the EAN.UCC, there exists a global registry of items called GTIN numbers. GTIN stands for Global Trade Identification Numbers. It allows for items made or sold globally to be numbered. It also dictates the level of packaging the item is sold in. It is possible to have an item number, a number for the container, and, if needed, a separate number for the pallet. The GTIN number is a 14-digit number indicating the following:

• The first digit is the packaging indicator, which in the following example, and for simplicity, will be a 0.

• The second digit in this GTIN is a 0.

• The supplier in this example was issued a six-digit GS1 company prefix of 123456. This tells everyone that the item belongs to XYZ Manufacturer.

• The supplier has five digits to assign an item reference number for that product. This is either a SKU number or the UPC number.

• The last digit is a single-digit “check digit.” This is used in case the number is wrong, and the machines scanning this can use the authentication scheme to double-check the authenticity of the number.

Here’s the example of the four fields of the 14-digit GTIN number:

The GTIN is a 14-digit number composed of four data standards. These standards are for the United States and Europe.

Table 16-2 shows the four standards.

Table 16-2. The Four Standards Used in North America and Europe

As mentioned previously, the GTIN is composed of four fields:

• The packaging indicator, I, is the first digit.

• The company prefix is the next seven digits and is set to 0 + Company Prefix 0 + C. In this case each unique company indicator is five digits long and is represented as C.

• The next five digits make up the serial number, U.

• The last digit is the check digit, C.

• The layout is as follows: I0CCCCCCUUUUUC.

Table 16-3 shows the data structure for the UCC-12 using the GTIN configuration with the various packaging levels.

Table 16-3. The Two Ways of Representing the Packaging Levels for the UCC-12

Note that at each level of the packaging the GTIN is different. The difference is achieved by either a different packaging indicator or a different unrelated item reference. It is possible to make both the packaging indicator and the unrelated item reference different for each level of packaging. The one area of caution is that the packaging indicator is always 0 at the lowest level.

The check digit is very important for readers because they must be able to differentiate between various bar codes and their representations. The check digit guards against fraudulent or bad bar codes. The following example shows how you can calculate the check digit for the UPC-12 number 012345633317. The check digit is equal to 7 and is the last digit in the bar code.

• UPC = 1st + 3rd + 5th + 7th + 9th + 11th = 0 + 2 + 4 + 6 + 3 + 1 = 16.

• Multiply the answer by 3, which yields 3 × 16 = 48.

• UPC = 2nd + 4th + 6th + 8th + 10th = 1 + 3 + 5 + 3 + 3 = 15.

• Add the 48 and the 15 = 63.

• What number is used to round the 63 to a number divisible by 10? Answer is 7. So 63 + 7 = 70. The check digit is 7.

The calculation for the GTIN is the same as discussed except that there are 13 digits to calculate rather than the 11 in the UPC.

Figure 16-1 shows the bar codes used in each of the four data standards.

Figure 16-1. The GTIN family of data structures⁽¹⁾

A major advantage for item synchronization is the drill-down procedure in this master data alignment scheme which groups the data into categories. Similar items are stored in many departments, causing double the inventory. This occurs as a result of multiple orders being placed by different department heads with little communication between them. Each has a preferred method for naming products. There are companies, such as Byte Manager, that specialize in categorizing items to avoid this issue.

The first level is the department, the second level is the category, the third level is the subcategory, and the last is the product. This is very important in data management for analysis and accuracy. For example, one department is labeled for tools. A category could be hammers, the subcategory could be all claw hammers, and the product would be the specific type of claw hammer carried by all the vendors.

This information is very important when using category management techniques to analyze the category movement in a company or store. It is also important to include in the advertising analysis of promotions. The content management is so important it is recommended that departments, such as the Electronic Publishing Department, be renamed to Content Management Department as it is responsible to act as librarians over all company content.