Are You Maximizing Your Downstream Data?
Consumer products manufacturers have had access to point-of-sale data from retailers for decades, but very few of them have figured out how to leverage it to their advantage. Defined by Supply Chain Insights LLC as "data that originates on the downstream or demand side of the supply chain," downstream data's biggest selling point is the fact that it offers immediate feedback regarding demand and buying patterns.
The problem, says Lora Cecere, Supply Chain Insights' founder and CEO and author of Integrated Demand Management: When Will We Start Using Downstream Data?, is that organizations use internal "pockets" of data to improve sales reporting, category management, or replenishment. "No consumer goods manufacturing company has designed and implemented an end-to-end value network to fully utilize the data," says Cecere, who adds that market adoption of downstream data has been slow.
While 31 percent of companies believe that they utilize the data well, all agree that the data's current use is only the "tip of the iceberg." According to a fourth quarter downstream data study from Supply Chain Insights, point of sale data from retailers was the most common type of data used in such initiatives (100 percent), followed by warehouse withdrawal data from retailers (86 percent), and loyalty data (52 percent). Technologies used to help with downstream data included Nielsen (59 percent), IRI (52 percent), spreadsheets and/or Access databases (52 percent), and retail solutions (45 percent).
Add Microsoft Dynamics AX to the list of technologies that help companies better leverage downstream data. Josh Richards, marketing program manager at Merit Solutions, Inc., in Wheaton, Ill., says the solution's enterprise portal functionality promotes external collaboration with supply chain partners to share downstream information.
"With this integration, and powerful BI and reporting capabilities," Richards says, "Dynamics AX enables companies to use downstream data more efficiently to respond quicker to demands and make more informed business decisions." Armed with that data, firms can reduce delays, identify and remove efficiencies, lower costs, improve productivity, and increase customer satisfaction.
"And, Dynamics AX has a very large partner channel with ISVs that have developed apps for Dynamics AX that enable companies to facilitate the sharing of downstream data - and how companies use it for decision making," says Richards.
Cecere says that while the potential uses of downstream data are compelling, most companies will continue to ignore the information because it typically "flies in the face" of strategic business thinking and processes. "The availability of downstream data has never been higher," says Cecere, "but the efforts to use it are stalled."