ECCMA Releases a new dictionary to lower the cost of Inventory Rationalization

The not for profit Electronic Commerce Code Management Association (ECCMA) released today the ECCMA Open Technical Dictionary (eOTD) as a cost saving tool for Inventory Rationalization projects. The eOTD goes beyond simple classification to provide Standard Item Names and Standard Attribute Names that dramatically simplify the task of identifying functionally equivalent" items of supply, the key to success in any cataloging or inventory rationalization project.

According to KPMG The most significant benefit to optimizing a cataloging system is not the reduction in operating expense, but the optimization and reduction in inventory investment". In a study on Inventory Rationalization KPMG provided two examples that demonstrate an average 17% reduction in inventory value as a result of developing and implementing a standard description system to eliminate duplicate items. These savings are available to both large and small companies.

The issue today is that many organizations lack a clear understanding of what they actually have in inventory. Inventory management systems most commonly track the quantity, the cost, the supplier and perhaps a manufacturer or supplier part number but not actually what the item is beyond a short cryptic description. For example, without a structured item description it is possible to be overstocked in drywall and placing orders for plasterboard and sheet rock.

Identifying duplicates in an inventory of as few as 100,000 items can take over 100 man months and cost up to $500,000. In the examples provided by KPMG, the average cost to identify a single line item was $9.50 with projects taking close to two years to complete.

The major opportunity in Inventory Rationalizations projects comes from a detailed understanding of the fit, form and function of items of supply and this is the purpose of the eOTD. The eOTD combines the expertise and work of the members of a leading non-profit association focused on building open standards for content and is based on the Federal Catalog System taxonomy. This taxonomy which was initially developed at the end of WWII and redefined by the 1952 Defense Cataloging and Standardization Act (Public Law 82- 436) that mandated a single Federal supply cataloging system. It represents over 5,000 man-years invested in cataloging and is used today in over 50 countries to manage over 16 million item specifications referenced by globally unique National/NATO Stock Numbers (NSN). It is this work that is at the heart of the eOTD.

Commenting on the eOTD, Peter Benson, Chief Technical Officer of ECCMA, stated, The Defense Logistics Information Service (DLIS) has one of the most experienced cataloging teams ever assembled, and their expertise has contributed greatly toward achieving an open standard descriptive language that can be used to improve inventory management in both the public and private sector."

Editors Notes:
ECCMA (Electronic Commerce Code Management Association) is a not for profit membership organization focused on the development and management of Open Standards for Content Management. www.eccma.org
Media contact: Todd Graff, (610) 861-5990 Todd.Graff@Eccma.org

DLIS (Defense Logistic Information Service), a major field activity of the Defense Logistics Agency, creates, obtains, manages and integrates logistics data from a variety of sources for dissemination as user-friendly information to Department of Defense, Federal and international logisticians www.dlis.dla.mil.
Media contact: Mr. Tim Hoyle, (269) 961-7019