Bethesda, Md. – Data errors on basic product information costs $1.7 billion annually for aftermarket suppliers and distributors, the Automotive Aftermarket Industry Association (AAIA) Electronic Commerce Committee reported today at the Aftermarket eForum in Chicago. The primary finding is a result of the committee's Product Information Case Study.
Scott Luckett, Vice President, Information Technology at AAIA announced the findings during a presentation at the eForum this afternoon. "The study makes a strong case for industry wide implementation of the Product Information Exchange Standard (PIES)," said Luckett. "The results confirm what we suspected for a while and we're pleased that decision makers in the industry will finally have the quantifiable evidence they need to make informed decisions about investing in item data cleansing and synchronization."
The study demonstrated that there is a wide degree of variance between the trading partner's item data causing significant financial and supply chain problems in the industry. According to data submitted for comparison by leading industry manufacturers and resellers who participated in the study, 51% of the items submitted by manufacturers had no recognizable equivalent in their trading partner's submitted files.
"No aftermarket retailer or distributor would consider opening the doors for business without a full and complete electronic catalog application database," observes Ed Heon, Founder and CTO of Profile Systems who assisted with the study. "Yet it is common to open for business with absolutely no electronic product information on hand for over 50% of the SKU's available from your suppliers".
Leading Industry Participants
The study involved six pairs of trading partners and involved product lines that each pair had in common. The trading partners' data was matched on part number, UPC code, reseller pricing, product descriptions, unit of measure, and minimum order quantity. Leading manufacturers and their resellers participated in the study including Dana Automotive Brake Parts and Clevite Engine Parts, Delphi, Federal Mogul, Gates Corporation, Global Accessories, Advance Auto Parts, CARQUEST, CSK, NAPA, O'Reilly, and Reliable.
Results from similar studies in multiple industries support the study findings including a recent report by the Industry Data Exchange Association (IDEA) and the National Electrical Manufacturers Association (NEMA) concluding that product and pricing inaccuracies are costing manufacturers and distributors 1% and ?% of sales respectively. In a study for the Grocery industry released late last year, AT Kearney announced that 30% of items in retailer item files were in error and that the Consumer Packaged Goods industry alone is losing $40 billion in sales every year due to poor product information.
Profile Systems, a provider of product data and supply chain management solutions for business-to-business electronic commerce performed the study and analyzed the data. Profile has been involved in conducting similar product data pilot programs in other industries and has assisted hundreds of companies in managing their product data more efficiently. "Poor product and pricing information is costing supply chains literally millions of dollars", said Mr. Heon, "We are gratified to witness an increased awareness and momentum toward the understanding that sound product information is the foundation for efficient supply chain and business processes".
The full Product Information Case Study is available for download at the Aftermarket Council on Electronic Commerce web site, http://www.aceconline.org/techwp.html
The Automotive Aftermarket Industry Association (AAIA) is a Bethesda, Md.-based association whose member companies manufacture, distribute and sell motor vehicle parts, accessories, tools, equipment, materials and supplies.
Profile Systems is a privately held developer of product data and supply chain management solutions for business-to-business electronic commerce. For more information visit www.profilesystems.com.