And he continued to say “That’s the area where we would need the least amount of help given that we’ve outsourced these parts ten years ago and the low hanging fruit is not around any longer. What do you say to the outsourced scenario of the management of use, cost and inventory out of control the buying teams”?
My first question is “how you would get information when it’s not in your system”? Does your supplier manage inventory for all of your plants and facilities resulting in a global view of spend? Does your supplier manage your data to the OEM or to suppliers so you have duplicate inventory costs?
Just considering the MRO items, the information could come from engineering or the integrated supplier. Logically, the integrated supplier would have been provided the part information from your company in order to setup and purchase the items in the first place. It is likely that they have the records as they were given them and they are linked to item setup in the purchasing system. The top level source would have been engineering who would have either had the equipment constructed or been responsible for the equipment purchase and the parts along with them. If after or during the purchasing activity the “key” item record is setup in the purchasing system using the part supplier information versus the OEM information, this will lead to item duplication. Duplication then will create overstock, variant pricing, variant lead times and other inconsistencies that add unnecessary cost.
Based on what you are saying it sounds like items in your system are based on either the part supplier data or specifically identified by the integrated supplier (their item number). The best scenario is when the OEM part is what is setup as the key item, having the purchase action to the OEM directly (OEM setup as a supplier) removing the “middle man” cost. Second after that is having the OEM part as the item, linked to the specific supplier(s) for purchase. Local purchase suppliers are still linked to the same item also. Having the same item record used across the enterprise is optimum.
I would also add that there should be a means to discover OEM part information as a reactive purchase need comes from maintenance. Parts are typically identified physically with OEM information. For example an Allen Bradley/Rockwell module with have the Allen Bradley part number physically stenciled on it. If a part breaks and maintenance needs one, there must be a way to find out if that part is in stock and a way to buy it if is not. We believe that enterprise wide viewable, verified and standardized OEM part information will reduce the cost for maintenance by eliminating the time consuming discovery of part information in your systems and the correct parts are stocked. This approach also enables part sharing between facilities that is limited without common data. Part sharing in turn reduces overall cost through reduction of inventory. With plants here in the U.S. and worldwide, this type of advanced planning is where the true brunt of the savings come through.
Obviously, much depends on the specific agreements with your integrated supplier. But consider the following questions. If the data stored in your system is not the OEM information then it’s logical to assume that it is data created by the integrated supplier from the OEM data.
1) How does your company know that the information is accurate? Are there any checks between the data given to the integrated supplier and what you have in your system?
2) How does your company know if they have the correct parts setup in the system and stocked appropriately? It seems that there is an opportunity for the integrated supplier to setup and stock items which aren’t necessary and would only be discovered through data transparency.
3) How does your company know that you are getting the best price on parts? Even if there is a cost savings agreement with the integrated supplier, if there are duplicates the opportunity for piece cost reduction is lost when the true usage is not known because of part duplication.
My second question in this. It seems from your response that everything is running quite smoothly. But is that true in Manufacturing? Do they ever experience loss of production because a vital part could not be found or was out of stock? How about Maintenance? Inventory management? Engineering? These are the departments that should be surveyed because there is a benefit for them too.
Tags: Business Intelligence, Data Cleansing, data governance, data management, Data Profiling, data quality, DATAForge, dataquality, Inventory Management, linkedin, maintenance, manufacturing, Maximo, mdm, spare parts