Genealogy: Missing Prerequisite?

A prerequisite for selling products in a region is to comply with environmental legislation, which

Most people we surveyed in electronics cannot access genealogy data for their decision-making!

Most people we surveyed in electronics cannot access genealogy data for their decision-making!

typically entails knowing exactly what is in each unit. The obvious way would be to use the product genealogy – but apparently it’s not the easy way. In fact, most decision-makers can’t put their hands on genealogy data.

In our recent research study Capitalizing on Big Data from Products, 57% of respondents reported that genealogy data is not available to them!

How is it that despite increasing regulatory demands for complete traceability of all components and materials in electronics products, our respondents say genealogy data is not available? Typically the information exists or the company would be taking a terrible legal and compliance risk. The reality is that genealogy data is often not in a consolidated, clean, and accessible format.

Does that matter? If you are confident you can meet the regulatory requirements, why care?

First, are you confident you can meet regulatory requirements? We don’t expect you to publicly acknowledge this problem if you are not. However, everyone has been through an audit that is painful when data does not come together easily.

If more decision-makers had genealogy data accessible, there could be some significant business benefits. Here are a few examples:

•    Limit recalls: Companies that can trace materials included in each finished product can contain problems that pertain to certain supplied materials, components or sub-assemblies. This leads to risk, time and cost advantages in the event of a recall or problem. (Sony’s laptop battery flaming problem years ago cost $430M because they and their OEMs could not pinpoint which units were affected accurately and recalled 9.6 million units.)

•    Lower warranty costs: Genealogy that contains a problem also leads to lower warranty reserves – and can also prevent other legal liability issues from ever occurring. Warranty reserves can be significant. (Remember Microsoft’s Xbox 360 with the blinking lights? That cost them $1B in extended warranties!)

•    Hold suppliers accountable: When a particular component causes a problem, genealogy can show that. OEMs are often able to charge the supplier far more than the cost of their materials in that event – if they can accurately pinpoint a problem to that component.

•    Improve NPI: Everyone knows that the key to success is new product introduction (NPI), and having details on the genealogy of previous products can provide big insights into what works for product profitability and what does not.

Given the potential benefits, why do most companies still not have genealogy available for decision-makers? What can a company do to ensure they can gain those benefits?

For most Electronics Businesses, data cleansing and preparation is a highly manual and often idiosyncratic process. The work is repetitive and when you do analysis of one issue, other issues appear that need different data to clarify.

Despite these problems, a quarter of the respondents to this study managed to improve their business performance across many measures. Within that group of “Improvers” a few have found sound technology solutions that are improving their customer service and their supplier management. The companies in our study who can get genealogy data in minutes (5%) or hours (9%) have a big leg up on everyone else.

I believe that the risk of not having genealogy data easily available is so enormous that companies will jump when they see a solution. Recently, that has started to happen in just a few cases. The solution is in its early days, but change is coming. Find out more in the webinar Capitalizing on Big Data from Products, based on this research, sponsored by Siemens Cloud Omneo.

Please, let me know how you are doing with getting your hands on genealogy data.

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