Catalog Management: In-house or Out-sourced?

Many organizations face the dilemma of whether to manage their stock Catalog in house or to out-source the function to an external provider. If you tackle the challenges involved with creating or honing your in-house Catalog team to handle the job? Or in case you step back and manage the relationship with an external specialist who provides those services, tailored to your requirements? The decision isn't such an obvious one; there are several issues to be considered.

Managing data integrity is a full time occupation, if it is done right. Many organizations make the mistake of incorporating catalog duties with other obligations, so that the source is neither concentrated nor dedicated to the task.

Allow me to 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 to the free-format description field the way he/she liked to see it. These individuals came and went and over time and the database grew and grew.

The results revealed themselves at 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 wreck. Finding a part was a frustrating, challenging, usually unsuccessful encounter. They weren't alone in their situation. Inventory was regarded as a necessary evil and rarely got any attention for improvement.

Another frequent catalog management mistake is to give responsibility to a non-tradesperson. Often we have seen cataloguers who lack the basic knowledge to correctly identify a part. The item description that is entered into the system is unrecognizable from the maintenance employees using the part.

The consequences can be costly for the company. A bin of parts sits on the shelf (already paid for) and each time that unrecognizable part is required, a maintenance employee fails to find it from the machine, so he orders the part directly (and often at a premium"RUSH" price) to finish his job. The final result is that both stock and place buy purchases have increased the company's spend.

Creating an internal catalog team isn't as easy as it first seems, if you don't see it as easy data-entry work. Then it really is easy - you simply 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 get the ideal skill-set to satisfy the needs of the job.

Not just should your cataloguers know what the part is and the way to explain it so that your maintenance employees would recognize it, they also have to learn how it's used, and what material quality and specifications are required. And they have to have a process for setting up new product descriptions. Finding someone with all these abilities may be a tricky task. And locating several of these (across the company) to work together may prove next to impossible.

In addition to that, you want to develop internal procedures and processes around the catalog itself -- to establish the standard nomenclature you can use, to build templates for consistency and completeness, to assign responsibility for the data.

That's a lot to think about for a company that's not in the Catalog Management industry!

An alternative choice is to out-source the catalog management function to specialists: dedicated, qualified employees to do the job so that each and every product description meets manufacturer specifications. Next time a maintenance employee looks through the stock catalog for the part, he admits it immediately and uses it in the Shops inventory shelf.

Catalog Management companies have staff who utilize parts data all of the time. Many are former tradesmen or individuals that are familiar with manufacturer's catalogs. Frequently 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 tools are available to provide information to you within a guaranteed timeframe (hours, not days), and your payment choices 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 very cost-effective for an organization.... a very viable alternative. The challenge then is to discover a company with the skill-sets you would like.

Because Catalog Management companies function as an extension of your organization, it's important that you can easily work with the resources assigned to you creating a good rapport with them. You will 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 seem a year later validated their choice. Although they saw no decrease in employees, they did see enhanced Maintenance efficiencies in finding parts. They also recorded savings in duplicate avoidance, rationalization of surplus 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 been unable to achieve by themselves.

Catalog Management is a challenge that many multi-site manufacturers face daily. Each organization has to decide for itself whether or not to tackle it in house or to engage the services of an external service provider. With each choice comes unique challenges for management. There's absolutely no ideal answer, but failure to address the problem at all will certainly add cost to your company.