The Big Data Risk: CPG Manufacturers Should Leverage MDM to Improve Loyalty

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The Big Data Risk: CPG Manufacturers Should Leverage MDM to Improve Loyalty

By Todd Callen, Stibo Systems - 09/23/2015
Manufacturers of food & beverage and consumer packaged goods (CPG) are keenly aware of the convergence of their digital and physical worlds. This shift is driving both new opportunities and issues, especially when communicating information to customers or when complying with government regulations regarding sourcing, ingredients, labeling and packaging. As a result, managing the sheer volume of this information, publishing it across all channels, and synchronizing it to third party systems is becoming a high priority and one that can no longer be ignored if they want to improve customer experience and loyalty.

So while most industries find themselves struggling to manage even one of the many data domains that make up today’s Big Data environment, the reality is that creating an efficient and analytical environment - one capable of transforming raw data from suppliers, customers, locations, products, etc., into deliverable insights - is a real challenge.

Take food labeling for example. Food allergies are on the rise and continue to increase in developed countries worldwide. On average, 5.2 percent of children under the age of 18 in the United States have a food allergy, and a recent study released by the Centers for Disease Control and Prevention (CDC) found that food allergies increased almost 50 percent between 1997 and 2011. Today, food manufacturers all over the world are now required to comply with the EU1169 food labeling regulation, which mandates that food labels incorporate the following:
  • Allergens must be highlighted in the list of ingredients
  • Non pre-packed foods must contain information on allergens
  • Nutrition information included on processed foods
  • Origin labeling for unprocessed meat
  • Legibility in regards to the size of text on the label
Regulations like EU1169 will continue to increase as consumers become more conscientious of what they eat. Additionally, the high demand for food manufacturers to be more transparent with the ingredients they use in their products is unlikely to subside. This means they will ultimately require even more control over their data.

According to a survey from Aberdeen Research titled Operationalizing Big Data, organizations in the CPG industry struggle to manage the same challenges around data disparity and quality as other industries, but are much more likely to cite overall data volume as a major factor complicating their data environments. Top CPG manufacturers want and need to create deep analytical insight, but this requires the use of technology as well as access to the data that needs to be applied.

From Chaos to Coordination: MDM Puts Manufacturers in Control
While many industries face this need for greater data synchronization, the CPG sector, as manufacturers, struggle even more with finding meaningful ways to share data with their external stakeholders including consumers, suppliers and even regulatory bodies. Today, manufacturers are leveraging technologies such as a Master Data Management (MDM) to consolidate and manage their nutrition and product information across the organization, and to publish accurate and up-to-date information across all online and offline channels, regions and channel partners. In order to improve collaboration with retailers, CPG manufacturers are also syndicating information to third-party data aggregators such as GDSN and are providing retailer-specific attributes directly to their retail customers.

More specifically, MDM offers a variety of benefits including:

Data Governance: While manufacturers need to make data accessible and usable to derive analytical activity, they also need to ensure it is controlled. Storing and tracking data for raw ingredients alone presents a significant challenge, especially since accuracy is critical. A single ingredient can come from many sources, each of which may have a different origin and composition. CPG manufactures need to create a high level of data governance to ensure that food details are understood and ingredient information is consistent. This is particularly important as food details must be reliable given it is shared throughout the entire manufacturing process, the value chain of distributors and retailers, and into the hands of consumers. According to Aberdeen’s findings, companies using MDM are almost three times more likely than others to have strong data governance policies in place.

Improved Information Quality: Supporting the process of data discovery requires a solid foundation of complete and correct data. Consumers want the ability to easily access accurate product information so that they can make a purchase with confidence. However this requires manufacturers to enhance their supply chain visibility and become more transparent in regards to sharing information related to ingredients, allergens and nutrition. In fact, Aberdeen Research found that companies that have embarked on an initiative have experienced 65 percent fewer instances of incomplete data that those that did not.

Better Decision Making: Getting greater value from an organization's information assets is essential to elevating brands, improving growth and boosting profits. According to Aberdeen, nearly three out of four managers (71 percent) said they are dealing with a shortened time frame for making critical decisions. MDM users on the other hand are 64 percent more likely to see a reduction in time spent searching for information, and 25 percent more likely to see an increase in decision speed.

But perhaps the most important characteristic of a successful MDM initiative is an organization’s ability to master multiple data domains simultaneously. After all, most decisions rely on more than one type of data to produce insight. For instance, supplier data and asset data are connected to product data which ties into customer data. The opportunity for expert insight and intelligent decision-making skills depends largely on a company’s ability to manage and blend these disparate data domains. In fact, according to Aberdeen research, 53 percent of progressive MDM users have the ability to master multiple data domains compared with 27 percent of all MDM users. So for CPG manufacturers who embrace the multidomain MDM approach, improving the efficiency of their decision-making processes by applying a more customer-centric methodology to managing their data may actually find it to be a game changer for them – turning chaos into coordination and allowing them to win at the customer loyalty game.

As CPG manufacturers look to manage their risk and increase customer loyalty, they must consider the efficiency of their data environments, integrate aspects of their physical and digital channels and consider an integrated strategy for multidomain MDM. Accurate and complete information not only helps to maintain regulatory compliance, but drives overall success in the CPG industry.
Protecting your brand image and improving a customer’s experience starts when you can put your data to work. The ability to master data from all your domains including product, location, suppliers, distributors and other aspects of an extended enterprise improves the quality of your information, accelerates the decision process, supports substantial performance improvements, and helps you adhere to mandates.

In recent years the CPG/Retail supply chain has changed significantly. Master Data Management solutions enable you to keep pace with these changes and more importantly exceed customer expectations in order to outpace the competition.


Todd Callen is the executive vice president of sales and marketing for Stibo Systems, the global leader in multidomain Master Data Management (MDM) solutions. With over 20 years of sales management experience, his expertise in multidomain MDM has been applied by numerous Fortune 500 companies. Todd has helped some of the world’s most recognized brands implement solutions and achieve greater insight into their businesses by adopting a comprehensive MDM strategy. For more information, please contact Todd at [email protected] or visit the company website at http://www.stibosystems.com