Product Information
Management
Accountable for product information
management and want some practical suggestions to reduce information
management costs?
What is a
product?
Products are usually classified as:
- Items, which are tangible products either sold,
manufactured or purchased by the company and usually have several means
of identifying the product such a:
- Manufacturer’s id number;
- Stock keeping unit number;
- ISBN (International standard book number) for
books; and
- Universal product code number.
- Services, which include services provided by
the company, such as professional services, or required by the company,
such as contracted services.
Products can be sub-components of other products e.g. think of an
aircraft:
- Injector systems may be comprised of several
products;
- An injector system may be one of many systems
installed on an engine;
- An engine may be one of many systems installed
upon a propulsion system; and
- A propulsion system is one of many systems
installed upon an aircraft.
The aircraft is sold as one product by the manufacturer but is
comprised of many thousands of systems, sub-systems and component
products.
What product
information management is needed?
Most companies track product information such as:
- Cost
and availability to ensure optimal
purchase pricing and no delays in obtaining raw materials;
- Inventory
quantities needed at supply locations
to ensure no product shipment delays to customers;
- Cost
of manufacturing products, to help
determine profitable pricing strategies; and
- Competitors
pricing for similar products,
to gain competitive advantage.
What product information
management is required?
The following data is usually required to manage products:
- Product
feature or attributes. Products require a means of
defining exactly what the product looks like e.g.
- Brand name;
- Product type;
- Color; and
- Dimension.
- Marketing
prospects. Some companies need to track the type of
customers or prospects who are interested in a specific product to help
with campaign management;
- Supplier
information. Companies may want to compare
prices to get the best price;
- Inventory
levels are critical to most companies to ensure
profitability. Companies usually need to know the inventory level at
each location and key things such as the reorder level and quantity
required for reorder. Depending on the nature of the business, this
inventory management can be very specific even tracking the individual
bins or storage locations that contain the inventory;
- Product
pricing. Companies usually track different
prices for products including:
- Base price;
- Discount price; and
- Surcharge price.
These prices
may vary depending upon the number or products purchased or sold, or by
location.
- Product
costing. Companies track the cost of production
to help ensure profitable product pricing; and
- Product
replacement. Some products are discontinued and can be
replaced by another product and companies need to track this to
facilitate obtaining the correct product.
Where is
product information management used?
Product information is used by a variety of management information
systems such as:
- Order entry;
- Billing;
- Invoicing;
- Accounting;
- Contract management;
- Project time reporting and management; and
- Inventory management.
What are
some product information management challenges?
Product information is required in many different management
information systems and this presents synchronization challenges.
Suppose you purchase a product on-line and are assured next day
delivery as required. You then find that it is back-ordered because
there is no on-hand inventory. The inventory management
system was updated with inventory levels but the order entry system was
not updated.
This is a common type of data challenge.
Why is
product information management important?
Product information is involved in many business functions such as:
- Customers place product orders;
- Employees take product orders;
- Products are shipped to customers;
- Vendors provide products;
- Companies sent requests for product quotes or
proposals to companies;
- Employees report time and
expenses required
to make products or deliver services; and
- Organizations and people are involved with
contracts and other agreements for products.
If every application captures and stores product data, then there is a
lot of redundant processing. This increases the information management
costs e.g.
- There is cost associated with synchronizing
data between systems;
- There are additional data quality issues and
costs as different systems may capture data using different rules;
- There are additional data movement costs as it
is necessary to load data warehouses from multi sources and to sort out
which data is the correct version and the most accurate version.
What is a
better way to manage this information?
Create a logical model and then use it to drive the design of a single
relational database to store product data and other data, which is
related to product.
Applications that need this data should then access the common database.
What are the
benefits of this approach?
One database will:
- Eliminate redundant data;
- Reduce database administration cost;
- Improve data quality; and
- Provide better return on information management
investment.
Is this the only way to manage this information?
Realistically, most companies have a significant investment in current
applications and cannot afford the redesign and development effort.
Master data management programs are becoming a practical, but perhaps
expensive, means of ensuring synchronization of key data among
applications.
What are the
benefits of master data management?
A sound master data management program will ensure data synchronization
between systems and eliminate many of the issues that currently exist.
Summary…
Product information management is used by almost every corporate
management information system and needs to be managed to avoid storing
redundant data. Data storage designs should be based in an enterprise
logical data model to ensure better return on information management
investment.
|
