A Typical Story
An energy industry firm grew, reached a point where standardized business processes were valuable. ERP was implemented. Master data was moved upwards from simpler local systems to the central system. Master data now represents knowledge in a way that was the duty of staff previously. The migration was executed without addressing structured consistent material identities.
Unclear, ambiguous, standard free material descriptions are the root problem slowing and causing mistakes in materials related business processes. Procurement, inventory, maintenance planning and execution are affected. These are the core business processes supporting the operational lifecycle in asset intensive businesses. What should be specific unique catalogue items are ambiguous and indistinguishable from many others. Duplicate checking is like comparing varieties of mush rather than distinct items, so it is ineffective. Slow process, mistakes, confusion, frustration and increased safety risk are the result.
The Cost of the Problem
SCM and Maintenance functions have significant head counts. Many are direct business process users, and all are affected by the quality and pace of the business processes. An estimate of cost is $1M/year per every 50 persons associated with any material related business process. Those millions are an avoidable increase op costs and profit reduction.
Applying a cohesive nomenclature standard is the solution, a material identity taxonomy covering your universe of MRO materials. Standardized descriptions bring clarity for user searches, allow detection of duplicate items, and enables success in BoM and interactive parts catalogue projects. Quality is measurable.
The Solution at Your Business
Each company needs its own approach to solve MRO identities. You have your own history, stakeholder dynamics, sacred cows and 3rd rails; all need to be considered. Did you previously implement a Master Data System that didn’t solve low quality MRO identities, maybe you are considering a data governance system implementation and wondering if proposed vanilla “cleanse” is good enough, maybe you are averse to another IT system? SPC Results can guide you to improve your MRO material identities to deliver significantly improved operations and maintenance performance at your company. Let’s discuss your situation.
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