The document discusses how master data management (MDM) can provide visibility and business benefits when used to manage product information across various retail systems and processes. MDM allows retailers to establish consistent product definitions, attributes, and hierarchies. This helps avoid issues like inconsistent data, out of sync information, and high costs associated with data errors. When MDM is used to automate new product introduction and attribute enrichment processes, it can further ensure data integrity across the retail organization and supply chain. Alternative hierarchies and product attributes in MDM also provide added visibility into business strategies, execution, opportunities, and performance.

1. Agenda Business Agility enabled by Information agility Value proposition of MDM in SOA based solution Service Life-cycle and SOA Governance MDM adoption issues and challenges Leveraging MDM in Retail - Product Management MDM value proposition however is not realized, by simply developing a master data store and maintaining master data until the information services based on MDM are leveraged in business processes (i.e., in a SOA based solution)

2. Most Retailers manage item data with stove-pipe systems that create inconsistent master information Data definition differing from one system to the next Differences in planning level EOM from one system not matching BOM in another Differing information between applications Some qualitative and some quantitative information Coexistence of Legacy and current data Source: IBM - A.T. Kearney Planning Sourcing Distribution Marketing Finance Channels

3. Taking care product data is not just the right thing to do, it is the $mart thing to do Erroneous product information and attributing impact customer trust and data integrity through the whole the life cycle of the item Loss of credibility from consumers Poor web search Erroneous product description Out of stock and returns Loss of inventory management visibility Inflated inventory Compromised local assortment strategy Bad historical data for forecasting Loss of supply chain agility Compromised supplier collaboration programs Failed contingency and risk management plans Delayed shipping from lack of information

4. Controlling the New Product Introduction process is the first step in creating clean data Companies lose approximately $40 billion, or 3.5% of sales, each year because of supply chain information inefficiencies. Nearly 30% of the item data in catalogs used by retailers and manufacturers is incorrect. Correcting those errors costs between $60 and $80 each. Nearly 30% of the item data in catalogs used by retailers and manufacturers is incorrect. Correcting those errors costs between $60 and $80 each. Companies spend an average of 25 minutes per SKU per year manually cleansing out-of-sync item information. Nearly 60% of all invoices generated have errors ; each invoice error costs enterprises from $40 to $400 to reconcile. 43% of all invoices result in some form of deduction. New product rollouts take an average of four weeks-in large part because of inefficient and error-prone approaches for exchanging and updating new item attributes in buyer and seller systems. Source: Transparency of cost and value - A.T. Kearney - 2008 4 weeks of lost sales and margin!

5. Automating the NPI process with process integration insures data integrity Manufacturer Data Web Channel Data 1 2 3 5a 5c 6 8-13 7 5b 4

6. Facilitating New Item Enrichment process (Attributing) also insures data integrity InfoSphere Data Warehouse NPI - Input characteristics in MDM Size Packaging Price … InfoSphere MDM Server for PIM System returns similar styles for stores and customers based on product characteristics From MDM, query of similar styles based on product characteristics based on customer and store clusters Attributes are populated in InfoSphere MDM server for PIM Information distributed to all relevant repository and services Corded handles, top magnetic closure, inside zip and slip pockets. 12"L x 11 1/4"H x 5 1/4"W; handle drop 7 1/4"; handle length 18". Fully lined. (Item # E17823) $58.00 Corded handles, top magnetic closure, inside zip and slip pockets. 12"L x 11 1/4"H x 5 1/4"W; handle drop 7 1/4"; handle length 18". Fully lined. (Item # E17823) $58.00 1 2 3 4 5 6

7. The organization of data with MDM increases business visibility as with the use of attributes and alternative hierarchies Merchandise Hierarchy Grouping of merchandise mix at different level in a sequential manner 1 Company 11 Division 111 Department 1111 Class/Category 11111 Sub Class/Category 111111 Style A SKU (color/size) a– Attribute b--Attribute c--Attribute d--Attribute Cotton Never out College New concept Better Retail Apparel Women Shirts Short Sleeve Solid Sml White Camp Merchandise Hierarchy Physical and non-physical characteristic of the product Sourcing Customer Distribution Alternative Hierarchies New Concept

8. The importance of Alternative Hierarchies and Item Attributes New product strategy Monitoring Strategy execution via alternative hierarchies Customer Label Suppliers Distribution How do we know we are on track?

9. Alternative Hierarchies and Item Attributes provide added business visibility Customer Distribution Alternative Hierarchies College Cotton New Concept Sourcing Strategy Attributes Customer Suppliers Distribution Label Never out Monitoring Strategy execution via alternative hierarchies

10. Alternative hierarchies and Item Attributes at work Example: Corporate Strategic direction going after new DIY project The strategy will need to be executed and reflected across the organization. How does senior management know that it has been planned and how can they monitor the execution? An alternative Merchandise Strategy hierarchy is set up as an alternative strategy and will regroup such concept as mature business, invest business, new concept/test and so forth. The corporation will use this alternative hierarchy to see how much of their business plan and actual originate from these various strategy and evaluate whether they are on track with their objectives Attributes are not just for product and can be mapped to Channel, Locations, Vendors and Customers In our example, once the SKU is attributed with a tag such as DIY, it will provide us with the ability to manage the DIY strategy by providing visibility in: What market area have a DIY profile What is the market/customer opportunity associated with the concept How many and what products fit the DIY category, How many product have been ordered for this concept, are we over or under assorted What sales were planned and how much did they generate What floor/channel revenue did they contribute What was the supplier performance (deals and margin) associated with the program What marketing program what the most successful What location/customer segment Visibility in to the plan and actual performance, will provide the organization with the information necessary to assess whether the new concept is a success and whether next season it need to be moved into the “invest” category of the hierarchy or the retail organization look for other concept to develop to expand their market share