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“Master Data”. If you are like most Sales professionals who have worked on a large systems integration project, the very phrase probably sends chills down your spine. As fundamental as the data in your system may be, it is absolutely one of the hardest things for most consumer goods companies to ‘nail’ and tends to be a continual source of frustration even long after the project has finished and the organisation has moved into ‘business as usual.’
While an initial implementation may work perfectly for the static view of the business at the point in time that the project goes live, a failure to plan for future changes can prove disastrous down the line.
The general areas of concern tend to revolve around a few key areas:
Best Practices in Master Data Management
A ‘failure to plan is a plan to fail’ has been written on the epitaph of many a great sales systems project. The question to ask yourself when determining which direction to take during a TPx implementation is one of upfront cost versus continued running costs. The more complex solutions may be more difficult to implement initially but represent substantial cost avoidance over time.
The following strategies outline the various approaches taken by FMCG companies to approach the design of their Master Data and the implications to long-term maintenance. Whether you are sitting on a bespoke TPx system that has been in place for 20 years or midway through an implementation, ask yourself: Where are we on the spectrum? And where do we, as a business, need to be?
Customer Hierarchy Approach
| Maturity Level | Basic | Advanced | Best in Class |
| Description | Planning is done at the lowest level of the customer hierarchy, typically based upon the ‘sold-to’ level for each account. Used primarily in markets where either the customer or product is a new entrant, this level of planning represents an easy starting point for smaller companies. This approach’s ease proves limiting approach in the long run, however, as it is not able to scale as the business grows. | The introduction of a multi-level customer hierarchy allows the manufacturer to move beyond setting a ‘static’ planning level for each customer, instead providing flexibility to the business. This approach allows sales to maintain a ‘planning level’ for each hierarchy branch, representing the lowest level where prices and promotions can be planned for a given part of the business. | Multiple concurrent hierarchies are available, allowing the business to see different ‘cuts’ of data based on user need (Marketing versus Supply Chain) and effective dated hierarchies allow a business to see a past and future view of the business in anticipation of changes. Planning levels are flexible, and conditions can be applied at various levels dependent upon business need. |
| Pros and Cons | Pros: Simple ImplementationEase of change Cons:Not scalablePoor visibility to ‘total business’ if detailed plans are not maintained for every single customer | Pros:Flexible and varied levels for planningScalable across the enterprise Cons:Complex business process to change planning levelsIncreased data burden | Pros:Extremely flexible; supports any business scenarioSupports IBP and global reportingCons:High complexity Requires substantial systems alignment |
Product Hierarchy Approach
| Maturity Level | Basic | Advanced | Best in Class |
| Description | All planning is done at the very lowest level (SKU), while reporting roll-ups allow managers to understand trends at the Size, Brand, or Segment level. Such a design works well in a static view of the world but brings up numerous issues when the product portfolio changes; for instance, adding a new SKU to the customer’s assortment may require updating every planned promotion for that customer individually. | SKU group planning allows the user to plan conditions across an entire range of products at once, reducing the amount of ‘clicks’ to manage the customer plan. More advanced TPx tools allow for the quick addition or removal of SKUs from existing promotions wherever the SKU group has already been planned. | Full hierarchical planning allows for creation of conditions across brands, categories, and various sub-levels within the hierarchy. More advanced tools allow users to save ‘selections’ of data not related to the hierarchy and have all matching SKUs to be automatically added or removed from promotions over time. |
| Pros and Cons | Pros: Quick implementationGuaranteed compatibility across systemsCons:Extremely detailed planningChanges require major overhauls to the customer plan | Pros:Good balance between flexibility and stabilityChanges optionally incorporated based upon listing changesCons:Key Account Managers take added responsibility for listingsSKU group changes are difficult to manage across time | Pros:Extreme flexibilityComplete integration and visibility across systemsCons:Automated hierarchy changes can drastically change plansLack of control for Key Account Managers |
Innovation Management Capability
| Maturity Level | Basic | Advanced | Best in Class |
| Description | Planning is done using a ‘like’ product to capture plans until the real product is available in Master Data; at that point, Key Account Managers must rebuild their plans to account for the introduction of a new product. | Local administrators create ‘dummy’ products which are used for sales and promotion planning. When real products are created in Master Data, planners use ‘find and replace’ functionality quickly include the proper product details in their promotions. | Full integration is achieved between the Master Data team, Supply Chain, and Sales, and products are created in Master Data even with partial details. These products are flagged as ‘New Products’ which controls certain functionality in TPx systems (workflows, pricing, integration, etc.) When the ‘New Product’ flag is removed, the special rules are no longer applied. |
| Pros and Cons | Pros: Simplest design and business processRequires linkage to Master DataCons:No management visibility to new product impactHigh risk of error or omission | Pros:Full flexibility within the Sales departmentVisibility into innovation plans for each accountCons:Disconnected Master Data between systemRisk that dummy products create errors downstream | Pros:Full alignment across systems and business process areasFull visibility into innovation risks and opportunitiesCons:Business rules must be defined upfrontIncreased need for interdepartmental communication |
As with most things in life, moderation is the key; a blend of strategies based upon business realities combined with a pragmatic approach is the best way to guarantee success. Too much focus on creating a perfect process may ensure a never-ending project that fails to go live, whereas too little can create a major business disruption at the first year-end cutover.
Regardless of the scale of your sales operation or TPx implementation budget, Master Data Management should be a core competency within your project team and one of the very first focus areas during initial design discussions with a vendor.
UpClear makes software used by Consumer Goods brands to improve the management of sales & trade spending. Its BluePlanner platform is an integrated solution supporting Trade Promotion Management, Trade Promotion Optimization, Integrated Business Planning, and Revenue Growth Management.
