Spare parts management at a high level is perceived and often approached as a process that should be simple. Looking at it from perspectives of the many different entities that form the supply chain and are required to work together – component manufacturers, tier 1 suppliers, tier 2 suppliers, and manufacturers, the logistical expertise needed to coordinate the information flow is anything but simple.
To realize cost saving from new process efficiencies, these separate legal entities need to “integrate” the information flow to manufacturers and within each manufacturer to internal groups such as purchasing, manufacturing engineering, plant maintenance, facilities management, warehousing, commodity management, and asset sharing / recovery need to share the mission critical master data related to the spare parts. A truly integrated information flow could conceivably touch a number of business units that indirectly work together across the supply chain to deliver just one item to a manufacturer. The most common element needed by (and from) all involved in the supply chain of the spare parts that keeps the equipment running is data standardization, data quality and an electronic method of transmittal. A study of large companies, a majority of which have revenues of more than $1 billion, found that 31% believe that their costs for incorrect data are $1 million or more per year.1
Data standardization and data cleansing cost should be covered with cost saving initiatives. In addition to the initial data cleanup; strong data governance processes should be implemented for on-going data setups.
1Dave Waddington, “Growing Adoption of Master Data Management by Business?” citing an Information Difference survey of 112 companies, 65% of which had revenues of more than $1 billion, IT-Director.com, IT Analysis Communications Ltd., June 23, 2008.
Tags: BPO, Business Intelligence, data, data quality, DATAForge, dataquality, eOTD, ERP, linkedin, maintenance, manufacturing, masterdata, mdm, Software as a Service, spare parts, Technology
Spare part is certainly an area in Product Data Management where Data Quality prevention may reduce costs alone based on the number entities in question.
One of our success stories at Omikron is about the Swedish power giant Vattenfall. Vattenfall Europe had a challenge in Product Data Management after many acquisitions and mergers. The same spare parts were listed multiple times. The result of a deduplication project was that 30,000 dual products in a database of 400,000 were identified. Some vendors had to admit that they probably have sold the same product to different Vattenfall sections where the term and the price could vary a lot. More on:
http://e-pages.dk/omikron/14/