Understanding The Impact Of PIM On Supply Chain Efficiency And Cost Savings
PIM software solutions became an indispensable part of the eCommerce world: product information management tool is essential for any business that wants to benefit from accurate enriched and consistent product information, data synchronization, faster product launches, minimum data errors, and automation of many data-related operations.
According to the Resilink report, 80% of supply chain disarrays are caused by human errors – the statistics represent how the lack of automation can disrupt business operations, and clearly shows that PIM (Product Information Management) is just as important for supply chain management as for any other business operations. Let’s find out PIM best practices that can help overcome the most common supply chain challenges, and learn how this solution can cut business costs and how to choose the right tool.
Supply Chain Challenges For eCommerce Businesses
Accuracy and consistency of product information across all channels
Omnichannel sales make it challenging for businesses to keep consistent and valid product data across different sales channels: e-store, marketplaces, mobile applications, and eCommerce platforms, especially when the product portfolio grows. It happens often that product descriptions on the online store and some other marketplace do not match, which confuses customers and leads to mistrust. Inconsistent product data results in customer frustration, sales losses, and a negative company reputation.
Invalid and inconsistent product data results directly in product returns, delays in shipping, and inventory management issues, such as over- or understocking, which all disrupt the supply chain.
Errors and delays in order fulfillment
There’s an array of order fulfillment challenges that happen between the order and product delivery. The inventory errors such as a mismatch between the inventory calculation of the shipper and fulfillment provider might lead to repeat orders and other problems.
Also, shippers can face slow transit times due to the capacity crisis in recent years. Another problem is fulfillment delays that are usually a result of human errors: many vendors do not follow the receiving warehouse guidelines such as label requirements, the accuracy of unit measures, or have mixed product standards – it all leads to repackaging or relabelling and results in order fulfillment delays.
Speed of product launches and updates
In the fast-paced eCommerce environment, it’s crucial for businesses to launch new products and updated existing ones fast to keep up with the competitors. However, not all businesses can offer enough agility and flexibility to keep up with the changes. The speed of product releases and updates significantly influences the supply chain. It might bring problems with the inventory, supplier, and logistic management.
The inventory problems include overstocking or understocking of certain products, lost sales, and extra inventory expenses. Supplier problems happen in case of speedy launches that require fast delivery of materials and products when the required timeline is not met.
Also, for the fast product releases, businesses need to negotiate with the existing suppliers about faster deliveries or start new supplier onboarding, which also takes time When it comes to logistics, it might be difficult to arrange fast shipping and delivery to satisfy the customers. On top of that, the fast product releases sometimes compromise the quality control process, which results in defective products and low buyer satisfaction.
Manage inventory levels
Understanding ongoing stock levels is essential for error-free and productive logistics. However, many businesses still use outdated methods of reviewing their inventory levels. It leads to poor visibility and misunderstanding of a company’s inventory, and, as a result, wrong supply chain decisions. Without knowing the optimal stock levels, businesses cannot prevent unnecessary storage expenses. And it becomes even more difficult when your product catalog grows or you are expanding to new markets.
How PIM System Can Help Streamline The Supply Chain+Examples
With the right data management tool in place, you can overcome all the mentioned above challenges and significantly enhance your supply chain. Here are some of the PIM best practices with examples.
Unified information for efficient materials data management
With PIM implementation, businesses get a single source of truth, which helps unify all the product information needed for supply chain management (specifications, standards, stock codes, etc). When isolated data gets structured, the supply chain management gets more effective in many ways: warehouse management, material demands planning and ordering become well organized.
EXAMPLE: The scooter manufacturer “Two Wheels Planet” gets the materials for products from multiple vendors located in different countries. It takes a lot of time to manage all the details about these materials, such as specifications, prices, availability, and standards. The data is also stored in different formats, as it’s sourced from different countries and in various locales, which is why it’s difficult to track all the updates. It leads to errors in materials supply and slows down the production of scooters.
SOLUTION: With a PIM tool, the manufacturer can store all the data in a centralized repository and share it across the whole supply chain. The company can also check if the materials have the required certifications and keep the risk of quality issues to a minimum. In the end, it reduces lead time, minimizes inventory expenses, and boosts supply chain performance.
Enhanced visibility for better inventory management
PIM system ensures there’s access to valid and updated product data at any stage of the supply chain. It comprises the full information about the commodity: description, specifications, availability, price, and other relevant data. With upgraded product visibility, businesses can more easily convey product information to their clients, meanwhile, customers can effortlessly find the product details they need. It brings down the lead time, minimizes stockouts, and optimizes overall the supply chain.
EXAMPLE: A retailer “Light International” sells a wide range of lighting products, meanwhile the retailer sources these products from manufacturers that are located in different countries. It’s happening oftentimes that customers order goods, pay for them, and later on receive information that, unfortunately, the goods are not in stock anymore, or they can be delivered, but not in the timeframe, stated in their order message. It drives the buyers away from the shop, as they do not want to wait longer for the delivery, or have to wait for a couple of days to have their money refunded.
SOLUTION: PIM system integration allows the retailer to have enhanced product visibility: when customers order online, they receive the full product details, such as price, availability, and delivery time & price options for each of the delivery timeframes. Only the products that are in stock will be offered to the customer, otherwise, if the goods are out of stock, it will be shown, when it’s going to be available and how to pre-order. Also, the retailer will be able to track the order status, and the updates in shipment and delivery. As the retailers will have accurate information about products from suppliers, they can also easily present new arrivals to their customers.
Product information accuracy for improved logistics
PIM software solutions guarantee that product data is accurate and fresh, which significantly influences logistics: with the correct information, there are fewer errors in goods orders and shipments and fewer product returns. Also, the correct product data facilitates customer segmentation, which can help supply chain managers categorize the deliveries, prioritize them, and quickly distribute the most urgent ones. With the PIM system, you can ensure that you are not understocked with the best-selling goods and meet the delivery deadlines.
EXAMPLE: A company “A to Z shopping” operates a big eCommerce store including clothing, electronics, and home furniture. These goods are sourced from a wide range of suppliers from multiple countries and then shipped to warehouses and distribution centers where they’re stored and fulfilled. Product information is scattered around different spreadsheets, and files, which complicates the track of product changes and updates. There are constant errors in product descriptions and it leads to errors in logistics, delivery delays, and unexpected returns.
SOLUTION: PIM implementation ensures the product content is error-free and updated. Logistics teams can effortlessly access the needed information and manage inventory levels and fulfill orders on time.
Find Out How Gepard Team Can Help You Improve Supply Chain Efficiency
Faster product introduction to speed up product time to market
With effective product information management and data mapping, PIM connects all the supply chain structures (suppliers, manufacturers, retailers, and distributors) which ensure smooth communication between sales and inventory channels. It means that there will be data synchronization across all sales channels and all the stakeholders to be in agreement throughout the product lifecycle. This is a guarantee of a quick product launch of new goods and also fast updates of the existing ones.
EXAMPLE: The clothing company “Catwalk Outfits” wants to launch a new line of shoes. Usually, it’s really time-consuming: marketing teams manually collect product information from different sources: spreadsheets, PDFs, and manufacturer’s e-mails. The process is slow and usually ends up in many human errors, meanwhile, their competitors launch similar product lines faster.
SOLUTION: With the PIM solution, a marketing team will have all the data in a centralized system: it can be easily accessed and managed, including product data enrichment to create compelling content. The product listings can be seamlessly published across multiple sales channels, on online marketplaces, social media, and retail platforms. It speeds up time to market and increases product visibility to potential buyers.
Conforming with global regulations
Supply chain now is not a limited structure: most eCommerce businesses develop to sell overseas. It means that product information that is catering to different audiences and locales, should also comply with global regulatory conditions and guidelines. It also refers to certain product registries or databases for specific goods. PIM scalability helps to get a 360 degrees product data view to have a holistic idea of the entire product content. Data that complies with certain standards, ensures that the products get to market faster and there are no obstacles to selling them on certain markets.
EXAMPLE: The manufacturer “Vance Refrigeration” wants to enter the European market to sell fridges and freezers with sales function and already found potential retailers to work with, however, they cannot do it yet, as the products are not part of the EPREL database so consumers are not issued with details about the energy efficiency of these products. It prevents them from expanding overseas and increasing profits.
SOLUTION: With PIM software solutions such as Gepard, Vance Refrigeration can simply register their products in bulk inside the EPREL system and automate product validation inside the database. In such a way, a manufacturer will comply with European energy labeling regulations, will swiftly enter the European market, will increase its sales, and improve the international supply chain.
Struggling with the questions before going on the PIM tool demo? We prepared a full guide for brands, retailers, and big marketplaces to better explore a PIM solution.
How PIM Can Save Costs
PIM software solutions streamline the daily work of eCommerce teams and lead to considerable cost savings for businesses.
- Lower data management costs. By automating the information entry and management processes, PIM allows to reduce the time and effort required for data entry, editing, verification and distribution, which reduces human resources cost, meanwhile, businesses can focus on employing labor for more sophisticated and creative tasks.
- Improved operational efficiency. Accurate and current information is one of the main PIM adoptions benefits that ultimately lead to fewer errors and delays, which saves the business time and money.
- Fewer product returns and lower warranty expenses. With the accurate and complete product data, ensured by PIM, there are reduced risks of delivering goods with defects or any products that do not match the product description, which means fewer dissatisfied customers. It results in a reduction of product returns and warranty costs, related to the return of defective products, extra shipping, and more human resources involved.
- Upgraded inventory management. With the enhanced product visibility, ensured by PIM, businesses have clarity into goods availability, stock levels, or shipping time which prevents stockouts or overstocking. It all leads to an improved supply chain and a reduction of inventory expenses.
- Increased sales. PIM implementation not only helps businesses save costs but also boost performance: with consistent and accurate information across different sales platforms, businesses speed up their time-to-market, meet up buyers’ expectations and grow customer retention, which all leads to increased business profits.
Choosing The Right PIM Solution
For every retail or manufacturer, it’s vital to choose a data management solution that is flexible enough and has must-have PIM features that make the job of different teams and departments more convenient. Such characteristics include bulk data import and export, rich content support, product taxonomy support, API connections, product mapping, data governance, multitenancy, flexible data model, and configurable dashboards.
It’s also worth searching for a PIM with a data syndication feature to ensure your product content can be distributed to a plethora of platforms and marketplaces, while automatically complying with a wide range of requirements. PIM software solutions come at significantly different prices, formed by many factors, so there’s a solution for every budget.
PIM Software Types Comparison
We compared different types of data management tools to help you find out which one can suit your business needs.
|Type of PIM Software||Description||Pros||Cons||For Whom|
|Master Data Management (MDM)||A system that is used as a company’s database for all master data, available to all employees.||– Enhanced data quality and consistency;
– Compliance with data policies and laws;
– Low risks of data duplicates and inaccuracies;
– Efficient cooperation between multiple departments.
|– Complexity of implementation;
– High cost;
– Integration challenges.
|Especially important for companies that work in highly regulated industries (healthcare, law, finance, governmental organization). It can also be relevant for retail, however, they tend to choose other tools like PIM or PCM.|
|Digital Asset Management (DAM)||A convenient solution for managing a company’s media assets accessible by all employees.||– A wide range of features for digital content management;
– Big storage capacity;
– Great for better brand consistency;
– Enhanced insights and analytics.
|– No opportunity for data syndication;
– Customization issues;
– Integration challenges.
|Mostly for manufacturers and brands with big volumes of digital assets (including their own range of media files).|
|Product Catalog Management||Software tool for managing extensive amounts of products to create, update, and distribute products across multiple sales channels.||– Centralized product information management;
– Product data enrichment;
– Channel-specific content; optimization;
– Data verification and standardization;
– Seamless integration with other platforms;
– Digital shelf analytics;
– Ease of use.
|– The cost of certain solutions is too high;
– Not each solution offers a syndication feature.
|For retailers, brands, distributors, and manufacturers of any size.|
|Product Information Exchange||A system that enables data exchange between companies or systems.||– Workflow automation;
– Analytics and reporting;
– Collaboration tools;
– Enhanced scalability.
|– Data governance issues;
– Security challenges.
|Manufacturers, retailers, distributors, and eCommerce platforms.|
|Product Lifecycle Management (PLM)||A software tool that helps companies manage the whole product lifecycle, from its creation to distribution.||– Reduced product launch;
– Improved quality control;
– Increased efficiency;
– Customer service improvement
|– Implementation and maintenance expenses;
– Integration challenges;
|Manufacturers, medical and pharmaceutical companies, energy and utilities companies.|
Boost Your Supply Chain With High-End Product Data
It’s impossible to overestimate the role of high-quality product data for eCommerce business: everything from the idea of a product and getting materials for its production to shipping it to the most faraway customer depends on how accurate and consistent your product data is.
If you are struggling with data-related issues and want to benefit from the power of automation, it might be the right time to implement a Product Information Management solution. Book your free personalized demo and Gepard specialists will explain what advantages PIM can bring to your specific business.
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