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Operational data quality : A case study about the quality of net purchase prices in the catalog of

Lubbers, Lieke (2013) Operational data quality : A case study about the quality of net purchase prices in the catalog of

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Abstract:The focus of this research is on the quality of net purchase prices in the catalog of Because of the fact that the net purchase price is the input factor for many processes, like calculation of the selling price for the web shop, calculation of the stock value and selection of the preferred supplier, an incorrect net purchase price in the catalog has big consequences. This shows the relevance of correct net purchase prices in the catalog. Another consequence of incorrect net purchase prices is that the forecast of daily revenues is not accurate. In 2012 the company is taken over by Ahold, a stock market listed company, this emphasizes the importance of accurate forecasting of daily revenues. The problem is that the net purchase prices, as they are stored in the catalog, are not reliable. The last years a difference is noticed between the net purchase price that is agreed with buyer and supplier, and the net purchase price on the order invoice. This is caused by the fact that the entry and handling process of net purchase prices is not sufficiently validated. The central question in this research is how the data entry and handling process can be redesigned such that the quality of net purchase prices will improve. A literature study on the topic of data quality assessment and improvement methodologies has shown that TDQM (Total Data Quality Management) is a suitable method to apply in this research. However the four basic stages of this methodology cannot be followed blindly, to apply the method in practice some contextual redesign is required. Net purchase prices pass different systems and it is essential to understand the complete set of processes and how the quality of data at each processing stage is impacted by its quality at previous stages. The TDQM methodology should help assessing data quality not only at the final stage but also at any of the preceding intermediate stages. To reach this a TDQM framework that can be applied to operational systems need to be developed. For developing a TDQM methodology which can be applied in an operational context, the four basic stages, called definition, measurement, analysis and improvement, are used, but the details and execution of the different stages differs from the traditional TDQM methodology. The methodology is complemented by steps from the BPE approach. The BPE (Business Process Engineering) approach is suitable for the operational context but provides for some steps vague definitions and actions. The combination of these two methodologies, adapted to the needs of the specific environment, results in an improved TDQM methodology which can be applied in an operational context. The first three stages of the improved TDQM methodology, called definition, measurement and analysis, are applied to get more insight in the entry and handling process of net purchase prices and to find the critical areas in this process. For assessing the quality of the net purchase prices in the catalog cases of mismatches between net purchase prices in the order system of and the prices on the invoice are collected. Together with the buyers these cases are analyzed and evaluated. The result of these stages is a list with ten root causes of price differences. These causes are all types of production errors and influence the intrinsic, contextual and representational data quality dimension. An additional finding, resulting from interviews, is that the culture among the buyers is also an issue which results in unreliable net purchase prices in the catalog. The buyers are not aware of the fact that they are, together with the Product & Content department, responsible for correct net purchase prices in the catalog and the influence of their tasks on other processes is not sufficiently known by them. In the improvement stage only five out of ten causes are addressed, these are the five causes owing to incorrect or delayed operations by the buyers. The desired situation is based on insights obtained from the analysis of the current situation and by interviews with employees from the Product & Content department, the Controlling department and with buyers from the Buying & Merchandising department. To bridge the gap between the current and the desired situation, three types of changes are necessary: changes in the IT system, changes in the process/working method, and changes in culture. These changes are translated into concrete solutions and recommendations. In short the solutions and recommendations are: - Implement a dashboard for monitoring the net purchase prices during the handling process. - Implement the possibility for buyers to enter the number of products as an end condition of purchase deals. - Suppliers need to send a new price list to at least two buyers and this need to be stored on a central disc which is only accessible for the buyers who are doing business with the supplier. - Buyers should block time in their agenda to make sure that they enter manual offers before the date from which the offers are valid. - Existing reports about mutations in net purchase prices in the catalog need to be used to check if the manual offers are entered correctly. A workflow is created which shows how buyers need to handle when entering manual offers. After the solution generation process and the formulation of the recommendations, the most important question is what the worth or merit is of the proposed solutions. For evaluating the monitoring tool a survey is conducted among the users of the tool. The user evaluations are based on the concept of Task-Technology Fit. From the survey can be concluded that the characteristics of the monitoring tool match with users’ task needs. The TTF perspective assumes that a better fit between technology functionalities and task requirements results in better performance. The implementation of the solutions can start independently of each other when the requirements are met. The first requirement that must be met is that the culture among the buyers need to change. The interaction between the buyers and the technology is a critically important contributor to the failure or success of change initiatives. Only when the buyers are aware of their responsibility for correct net purchase prices in the catalog and realize that the proposed solutions can help them improving these quality, the solutions can be implemented successfully. For the long-term solutions where the IT department is involved an additional requirement must be met before implementation can start, this is the estimation and scheduling of the IT time needed.
Item Type:Essay (Master)
Clients:, Utrecht, Netherlands
Faculty:BMS: Behavioural, Management and Social Sciences
Subject:52 mechanical engineering
Programme:Industrial Engineering and Management MSc (60029)
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