Data is the lifeblood of the modern economy. In fact, it has been the bedrock of businesses over the years, even if its importance has not been fully recognized. Clean and well-maintained data transforms into information that builds organizational knowledge. This improvement in operational knowledge can prove to be the differentiating factor between you and your competitors. All types of data including vendor or supplier data, customer data, facilities (asset), employee data are important; however, one critical data domain that sometimes gets left out of discussions is purchased parts master data.
Typically purchased parts include MRO spares, raw materials, assemblies and subassemblies parts,consumables and any other product required by the company. This is especially pertinent for heavy industries such as manufacturing, oil and gas, natural resources, industrial agricultural and utilities where purchased parts represent a significant cost component, with a direct bearing on the organization’s financial performance.
Any company that has a propensity to use a large number of MRO parts, raw materials, etc. should be concerned about its purchased parts master data. For companies working in different sectors, the domains covered by purchased parts master vary widely. However, the need for consistent, rationalized, and normalized data remains critical.
A well-structured, normalized, and rationalized purchased parts master data is critical for the optimum functioning of most companies. The pivot points when organizations mandate a system to standardize and govern their purchased parts data are below:
- Mergers and Acquisitions: Mergers and acquisitions are landmark events that cause a tectonic shift in the way processes and data are seen in most organizations. Aiming at leveraging the combined procurement organization, the CPO drives post M&A synergies through strategic sourcing and inventory optimization. Technically attributed purchased parts master data is a key success factor here. A master in mergers and acquisitions can facilitate these transitions effectively.
- ERP Implementation/Upgrade: ERP implementation/upgrade is when data, including the purchased parts master, takes centre-stage. An expensive ERP system needs clean and reliable data, and this leads to a demand for an effective Master Data Management system. Such a system brings in higher operational visibility and helps to consolidate procurement and inventory management operations.
- Strategic Procurement Initiatives: Strategic procurement initiatives rely on clean data. Innovation in procurement processes has been a focus area for large organizations and this has led to various strategic procurement initiatives. Clean and properly attributed purchased parts master data is critical for strategic programs aiming at higher spend-compliance, supplier consolidation, and category management as well as next-generation initiatives such as vendor-managed, and globally unified purchased parts catalogues.
As per our industry findings, companies can save an average of 17.9% by buying parts on-catalogue rather than off-catalogue.
Master Data Management of Purchased Parts:
Purchased Parts data refers to MRO parts, direct materials, assemblies, etc. This often runs into thousands of attributes and millions of records.
- Gathers all the purchased parts data, including indirect materials, from multiple plant systems, applications, and data repositories, makes it clean and accurate, and delivers it to all the systems and the end-users.
- Provides better control over how MRO data is created, updated, changed, and approved, and ensures efficient data replication, publishing, and sharing across the entire organization.
- Enables efficient product life cycle maintenance, product packaging, hierarchy maintenance, relationship-dependent data maintenance, data synchronization, reporting, and analytics.
- Ensures that all cross-functional divisions, end-users, and other relevant parties (vendors, suppliers, trading partners) always have access to the latest and most complete purchased parts data.
- Prevents data duplication problems and multiple data silos.
- Eliminates excessive time spent searching and reconciling data in different formats across multiple systems.
- Delivers accurate data on product lifecycles, identifies products globally, links and synchronizes materials data across disparate data sources across the enterprise through the semantic reconciliation of purchased parts master data, and also enables faster time-to-market and time-to-process.
Data quality improvement projects enable effective manufacturing, business, and operational processes and many other immediate and long-term business benefits. The growing need to address the master data quality problems has pushed companies to consider Master Data Management for purchased parts. It has emerged as a necessity for companies looking to embrace operational excellence and ensure bottom-line savings.
By incorporating inventory master data, material data management, and master data governance for plant maintenance and operations, companies can achieve significant efficiencies. Additionally, companies can ensure a well-managed inventory database and MRO organization in manufacturingcan lead to substantial cost savings and operational improvements. Manufacturing BOM (Bill of Materials) and MRO in manufacturing are essential components of a robust data management strategy that ensures accurate, reliable, and actionable data across the enterprise.
Take the next step towards transforming your data management today. Contact Verdantis to learn how our solutions can drive your business toward greater efficiency and success. [email protected]
