Why do we care about data?
Data is everything. Think of the weather app you check in the morning to decide what to wear or use to pack for a trip; the grocery list you bring to the store; your car console telling you when it’s time to get an oil change or check the battery. We use different types of data every day to make all sorts of decisions in our life, and the better the data, the better the outcome.
If your weather app doesn’t filter on location, you can’t predict whether you’ll need to bring an umbrella; if you’re buying groceries from memory instead of a list, you might buy items you already have and forget to buy what you need; if your car doesn’t give you warnings, you’ll end up stuck on the side of the road rather than taking it in for preventive maintenance.
Just like having good data matters in our personal lives, enriched Material Master data contributes to better decision-making and innovation within organizations. If your data is not cleaned to a schema and is rife with duplicates, missing data points, or disorganization, then your data isn’t actionable. And if you want to leverage your data and see more efficiency in your organization, you need actionable data.
Over the course of this new blog series, How Material Master Data Drives Efficiency, we will take you through an in depth look at four major areas where having actionable data makes a difference:
Procurement strategies
Inventory optimization
Searchability
Maintenance efficiency
Why does it matter?
Or, why these four areas?
Efficiency means saving time, resources, and money. IMA has proven time and again that each of these areas are a major opportunity for more efficient procedures that lead to savings, as seen in our customers’ results. You can get an idea of your own projected savings with a personalized return on investment estimate from IMA’s free ROI calculator.
Before we get into the details of what improvements you can see (make sure to check back every two weeks!), let’s cover what each category entails and the challenges in each one.
Procurement strategies
A procurement strategy determines how purchases are made, focusing on a long-term plan that involves relationships with suppliers to get the best deals on necessary inventory.
Procurement presents a variety of challenges, especially:
Inability to accurately define spend by category
Inaccurate spend analysis
Unnecessary spot buys, as poorly defined items can’t be found
Non-enforceable contract compliance
Difficulty negotiating with supply chain
Ineffective inventory management
With clean, actionable data, you can decrease purchase price, improve negotiations, and have more efficient contract implementation and management. In fact, our customers typically see 4 to 6% savings from a more accurate and efficient
procurement strategy.
Inventory optimization
To optimize your inventory, the entire process needs to be efficient–from purchasing to storage. If any one area is not properly managed or not handled consistently, you can have a lot of waste–whether that’s extra spendings, wasted space, or wasted time.
The main areas of difficulty with inventory management tend to be:
Purchases occurring from multiple vendors at varying prices
Difficulty leveraging spend
Maverick purchases (paying a premium for items purchased from non-preferred suppliers)
Excess inventory accumulating and taking up valuable warehouse space
Inventory carrying costs increasing
Difficulty identifying and disposing of excess/obsolete inventory
Difficulty setting accurate min/max levels
Inaccurate historical data (inconsistent or unavailable for min/max calculation)
Data is once again the key in efficiency; with actionable data, you can be aware of what you have, what you need, and how frequently you need to make purchases. With all that information, you can save much needed space, time, and dollars by managing your inventory properly.
Searchability
We all know that workers need to be able to find parts to do their jobs, and yet we still see problems across industries with searchability. Those problems often include:
Inability to find parts within storeroom
Inability to leverage warranty on stock items
Undue spot buys
Extended equipment downtime
You need the right data, readily available to make it possible to easily search your parts. That improved part availability results in faster equipment repair times and more effective planned maintenance.
Maintenance efficiency
Coupled with searchability, maintenance is affected by not having quality data. If you don’t know what’s in stock or can’t find the parts, your entire maintenance process is going to be slowed down significantly.
An inefficient maintenance process leads to:
Stock duplication
Unnecessary spot buys
Poor maintenance history tracking–which continues the cycle of poor efficiency
Inability to develop an effective preventative maintenance schedule
Faster equipment repairs means decreased downtime, saving time and money.
How does it affect you?
No matter what you do, data is essential to your business. This week, we’ve covered what issues poor quality data brings–problems you can likely relate to. In the following posts in this series, we’ll look at how quality Material Master data can help you solve these problems and save you resources, time, and excess spending. Check back in two weeks for a deep dive on procurement strategies!
In the meantime, don’t forget to try out IMA’s free ROI calculator tool to learn more about personal return on investment estimates. And, to better understand the current condition of your Material Master data, check out our no cost, no obligation data evaluation. Together, let’s make it easy.
For questions, comments, or other topics you want to see, email marketing@imaltd.com. We look forward to hearing from you!