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Catalog Management: In-house or Out-sourced?

Many organizations face the dilemma of whether to manage their inventory Catalog in-house or to out-source the function to an external provider. Should you tackle the challenges involved in creating or honing your in-house Catalog team to handle the job? Or should you step back and manage the relationship with an external expert who provides those services, tailored to your needs? The decision is not such an obvious one; there are several issues to be considered.

Managing data integrity is a full time job, if it’s done right. Many organizations make the mistake of incorporating catalog responsibilities with other duties, so that the resource is neither focused nor dedicated to the task.

Let me illustrate with a real-life example. A multi-site manufacturer had a part-time cataloguer at each of its twelve locations across the corporation. There were no established internal processes to follow, nor templates for data entry. Each cataloguer entered data into the free-format description field the way he/she liked to see it. These people came and went and over time and the database grew and grew.

The results showed themselves in the data… spelling errors, inconsistent manufacturer naming, inconsistent abbreviations, inconsistent words/symbols, incomplete description information, and duplicates. System word searches were next to impossible; the data was a mess. Finding a part was a frustrating, challenging, usually unsuccessful experience. They were not alone in their situation. Inventory was viewed as a necessary evil and rarely got any attention for improvement.

Another common catalog management mistake is to give responsibility to a non-tradesperson. Often we’ve seen cataloguers who lack the basic knowledge to properly identify a part. The item description that is entered into the system is unrecognizable by the maintenance workers who use the part.

The consequences can be expensive for the company. A bin of parts sits on the shelf (already paid for) and each time that unrecognizable part is needed, a maintenance worker fails to find it in the system, so he orders the part directly (and often at a premium “RUSH” price) to complete his job. The end result is that both inventory and spot buy purchases have increased the company’s spend.

Creating an internal catalog team is not as easy as it first sounds, unless you see it as simple data-entry work. Then it really is easy – you just need someone who can type and spell. But if you see it as the fulcrum that links together your maintenance and procurement teams, you have more of a challenge to find the right skill-set to satisfy the requirements of the job.

Not only should your cataloguers know what the part is and how to describe it so that your maintenance workers would recognize it, they also need to know how it is used, and what material quality and specifications are required. And they need to have a process for setting up new item descriptions. Finding someone with all these skills may be a difficult task. And finding several of them (across the company) to work together may prove next to impossible.

In addition to that, you need to develop internal procedures and processes around the catalog itself -- to establish the standard nomenclature you will use, to develop templates for consistency and completeness, to assign responsibility for the data. That’s a lot to consider for a company that’s not in the Catalog Management business!

An alternative option is to out-source the catalog management function to experts: dedicated, qualified personnel to do the work so that every item description meets manufacturer specifications. The next time a maintenance worker looks through the inventory catalog for the part, he recognizes it immediately and uses it from the Stores inventory shelf.

Catalog Management companies have staff who work with parts data all the time. Many of them are former tradesmen or people who are familiar with manufacturer’s catalogs. Often they have developed internal software tools to enhance their cataloguers’ efficiencies: pre-defined part templates (with drop-down attribute lists), manufacturer catalogs in electronic format for easy retrieval, data parsing tools, etc.

These resources are available to supply information to you within a guaranteed timeframe (hours, not days), and your payment options for these services usually range from a monthly flat fee based on min/max thresholds of catalog activity to a per sku (stock keeping unit) price, where you only pay for the services you use. Either way can prove to be quite cost-effective for an organization…. a very viable alternative. The challenge then is to find a company with the skill-sets you desire.

Because Catalog Management companies work as an extension of your own organization, it is important that you can easily work with the resources assigned to you developing a good rapport with them. You need the peace of mind that your data integrity will be maintained according to your usual high standards. Your focus should be: consistent, complete quality work, at a fair price, delivered in a timely manner.

Returning to our real-life example, the company elected to out-source its Catalog Management needs. A post-mortem look a year later validated their decision. Although they saw no reduction in personnel, they did see improved Maintenance efficiencies in finding parts. They also documented savings in duplicate avoidance, rationalization of excess stock levels and a narrowing of product lines. Most importantly, they were able to establish a single Corporate Catalog maintained in synchronicity across all sites (and across several systems)…a goal that they had previously been unable to achieve on their own.

Catalog Management is a challenge that most multi-site manufacturers face daily. Each organization must decide for itself whether or not to tackle it in-house or to engage the services of an outside service provider. With each decision comes unique challenges for management. There is no right answer, but failure to address the issue at all will certainly add cost to your company.

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