Philips maintains its market leading position by maximizing the selling window, getting its products to market first and hence maximizing revenue. It also undertakes strategically aligned mergers and acquisitions. However, through innovation and growth, Philips acquired mass volumes of product data which over time came to place a heavy burden on its multiple operational systems (ERP). The data became incorrect, incomplete and non-standardized.
In an effort to address the issue of poor product data, Philips compiled a master database which contained essential standardized product information, e.g. classification codes. However users did not refer to this database, nevertheless its multiple ERP systems contained duplicated and inconsistent product details.
With a global supplier network of more than 16,000 vendors detailing 1,000,000 parts, the disarray in its product data, including manufacturer code numbers, free form text descriptions and classification data, was giving rise to higher inventory costs and poor supply management.