Comment: supply chain data isn't flawed, it's how you're using it

21/10/2016

“Over the next two years, more than 25% of critical data in Fortune 1,000 companies will continue to be flawed – the information will be inaccurate, incomplete or duplicated,” according to a study.

Research and advisory firm Gartner said: “To gain competitive advantage from information, organisations need to identify ‘data stewards’ in the business and manage information as a corporate asset.”

However, while the study seems current in today’s information age, it is actually nearly 10 years old.

Does this mean that little progress was made over the last decade in terms of supply chain data quality? Of course not. A lot has been achieved regarding the availability, accuracy and relevance of data.

Nonetheless, low-quality data still limits companies to implement and monitor their strategic initiatives. “Garbage in is garbage out” is a common phrase describing processes and analyses based upon such poor data quality.

However, despite common usage, this saying is missing the point.

A different, and more constructive, viewpoint may be found at a Dutch garbage collector. It’s slogan states: “Garbage does not exist.”

As a recycling company, it is continuously extracting value from our residues. A similar viewpoint could be taken in respect of poor critical data in your own company.

Poor data quality is not input variable; it is simply the output variable of its upstream process. So instead of shaming poor data quality, it would be more constructive to work on the upstream process and have the data quality rise as a result.

Here’s an example:

One cargo airline wanted to get a more detailed perspective on how its clients were actually performing relative to what was initially agreed. Despite the fact that their performance data would not be perfect at the beginning, they starting having internal and external discussions once they found the client performance below par. As a result of these discussions they found that some of the ways it measured the client’s performance needed to be adjusted.

But similarly, by sticking to certain other rules, they got the clients to adhere more closely to the agreed booking procedures. Over time, the cargo airline could not only see that the performance numbers accurately reflected the actual performance of the client, but also that the client’s overall performance increased substantially.

Of course, there were complaints when client performance data was off – but that is a good thing. It means people are engaged and they know that the data will influence business decisions going forward. And that engagement will only further increase if they see that through their comments the overall measurement process is improved.

So the next time you think your data stinks, hold your nose and look again. By recycling this data upstream, you could be unlocking great value. If you don’t, you run the risk that your competitors will. As the saying goes: one man’s trash is another man’s treasure…

Niall van de Wouw is managing director of CLIVE. He can be reached at nvdwouw@useclive.com