Recently I got an opportunity to experience the end-customer impact, when a BI & MDM solution is not deeply embedded into the business transactions.
Telling the story as it is and shall analyze IT opportunities therefrom (cannot help it ….. professional hazard of being a SAP consultant !).
Business as Usual :
Recently, I visited an appliances store, part of a major Retail Chain. I intended to purchase a refrigerator. Browsed the available models on display and froze my requirements to a specific model – Whirlpool make, Professional-Deluxe Model, 340 Liters capacity, (Professional Model was released for sale very recently & earlier fast-moving model was Iceberg).
Visited the sales desk of the retailer & was impressed, since SAP-CRM application was deployed over the SAP Enterprise Portal, for the sales transactions. Now I specified my decision to purchase the particular make / model.
Sales Desk person was supposed to check the stock availability and proceed with Sales transaction. I expected the person to remain on the same SAP-EP page and open a page for Stock Reports to confirm model availability in warehouse.
The Sales desk person, opened his email and struggled to get to a particular email which had an MS Excel attachment and confirmed the stock availability and noted the Warehouse Part Number for the particular item. He entered the usual details into the CRM application. I was given a sales-note, which mentioned details for the purchase (viz. Make, Model, Capacity etc). I made the payment and the payment receipt mentioned a SAP Material Code for the purchase, which didn’t have any model / make details. I was surprised & mentioned the same to the sales team. Anyway, as a buyer, I was not too much concerned, since I had a copy of the sales-note with details for the make / model, etc.
Next day, the delivery van arrived and delivered the refrigerator. I returned home late evening & was happy to receive the refrigerator. I was informed that the Service Technician would come later for demo and installation. When the Service Technician arrived and inspected the Box, we realized that it was a “Whirlpool make, Iceberg-Deluxe Model, 340 Liters capacity”. I sent the service technician back & called up the sales desk, informing about the mistake. I retained the “Iceberg” model & told it would be exchanged for the correct “Professional” model.
After a good amount of follow-up and lot of excuses, I realized that the warehouse had made a mistake and uploaded to stock “Iceberg” model for the “Professional” Warehouse Part Number and in-fact they didn’t have any stock for the “Professional” model. The retailer was ready to credit the cost difference between the two models.
Finally, I collected the cost difference and asked them to send the service technician and install the delivered “Iceberg” model. Any other customer, would have asked the retailer to pay-up the cost and take back the wrong delivery.
The next purchase – I made it from a competitor’s Digital Store !
The retailer spent more than his profit, in arranging for the service technician, unwanted escalation and follow up with warehouse, and a lost customer !
IT Mistakes :
1) Stock uploaded on wrong item / part number (Warehouse Part Number)
2) SAP Material Code used for Sales transaction didn’t have enough details of Model / Make
3) Poor master data mapping between the Warehouse Part Number and SAP Sales Material Code
4) Reports for current stock were not embedded into the CRM / Sales transactions (application to confirm material stock availability)
Impact on Business :
1) Poor visibility on Warehouse stock, leading to costly mistakes
2) Undesired cost of sending the Service Technician twice, Delivery cost etc
3) Unproductive time spent on follow-up with Warehouse, interactions to pacify the customer, etc
3) Reduced customer satisfaction, since customer is not sure, whether he will get what is displayed !
Case for IT :
1) Implement / Integrate Master Data Management solution and streamline material codification.
2) Capture all relevant material characteristics to differentiate between models / makes / etc
3) Embed RFID tracking for correct movement of stock – inwards and outwards.
4) Embed BI into business transactions – to check and lock stock in real-time, when a sales transaction is made.
5) Improve initiatives for end user motivation to utilize laid down IT / Business processes