What is a Product?

Product Information Management (PIM) is a vast subject area. Not only does each industry vertical have its own way of defining a product, within a particular vertical each company may choose to represent their product information differently to satisfy their particular business needs. Having said that, there are indeed standard practices and processes that makes PIM expertise portable across various projects.

The first step to understanding PIM is to get an appreciation of the diversity around the definition of product. The example below, from the retail industry, provides some insight in to the complex world of PIM. In my subsequent blogs, I will address various nuances of product modeling.

What is a Product?
We all love shopping. But have you ever wondered what it takes for your favorite product to reach a store shelf, or what that product means for the retailer? This blog is going to take you through the journey of a diaper bag from supplier to store shelf – let’s see if we can figure out what a product is.

So let’s start backwards.

You see the diaper bag on the store shelf – how did it get there? Well, each store has an inventory area at its back and you must have seen store workers periodically replenishing the shelves with products. That’s one way the shelves are filled. The other way is that vendors themselves come over and stock the shelves. This is referred to as direct store delivery, or DSD; one example might be 2-liter Coca Cola bottles. DSD is, however, a discussion for another day. By the way, the product that you see on the store shelf is also referred to as the sellable unit.

So how does that diaper get to the store’s inventory area? Each store has an inventory management and an ordering system; any time the inventory falls beyond a certain limit, an order is placed with the relevant distribution center for supply replenishment. The ordering lead times are already known, so the ordering takes place in such a way that the store seldom runs out of diapers. Ordering may be manual or automated based off of the inventory levels.

So how does the diaper get to the distribution center/warehouse? This is a complex piece and is also referred to as “Network Alignment”, where the supply chain managers determine which suppliers are going to supply which distribution centers, and which distribution centers, in turn, are going to service which stores. The network alignment is product specific and is usually based off of geographical locations. The distribution centers have to keep track of their inventory levels as well as their lead times both from the supplier ordering (inbound) and store ordering (outbound) perspective to maintain the service level agreements (SLAs) with the stores. Also, distribution centers have their own stocking unit for each product, which they use to manage inventory.

It takes months of planning before the product actually hits the store shelves. A lot of systems (e.g. Item Master, Planogram, Labelling and Shelf Tags, Warehouse Management, ERP, Forecasting, Pricing and Promotions, Data Warehouse and Analytics, etc.) have to be set up with item information as part of the new item introduction (NPI) process.

So then, what is a product? Well simply put, product means different things to different stakeholders -for a warehouse management system product is the stocking unit; for a store product is the sellable unit, for analytics product is diapers irrespective of whether it is being sold as a bag or travel pack. It depends on your perspective.

Master Data Management, MDM, PIM, Product, Product Information Management

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