By Dennis Bouley
Management of corporate maintenance, repair and operations (MRO) requires the tracking of thousands of SKUs and the generation of many transactions that are of low dollar value in nature. In most organizations, MRO spending amounts to less than 20% of the total money spent. Oftentimes, this creates a problem of both focus, prioritization and accountability. The area of MRO is often left to languish in inefficiency as bad sku data is rampant.
If the proper time and effort needed to cleanse and normalize data is neglected, common parts will often have no manufacturer make and model number associated to them. Across the organization bad data is being entered into the systems (i.e., multiple descriptions for the same part, incomplete information, inaccurate information). As a result, executives that are looking for efficiency gains are thwarted in their efforts to control costs.
“I’ve watched so many companies spend millions on systems but they gain no real efficiencies on the MRO side because their data is bad,” says Mike Weinberg, Chief Marketing Officer and Senior Vice President, Corporate Development at Synovos, a provider of MRO supply chain management services. Weinberg should know, he’s been involved in MRO deployment across various industries for over two decades.
According to Weinberg, the problem is not technology. “Technology is an enabler. There is not a lack of MRO technology out there. The question is whether or not the technology can deal with the information that’s being put into the system. Systems are only as good as the information that goes in them,” he said.
Improvements in data integrity required
One of the biggest challenges facing companies today is having clean data that is accurate when it is uploaded into systems like SAP, JD Edwards, or Oracle. “If you’re buying the same part in 15 different plants in a manufacturing environment, and you’re calling it 8 different things, and you don’t have a manufacturer make and model number on it, and you’re buying it from different suppliers in every plant, how do you leverage your supply chain? You end up paying much more for these parts than you should. You could spend $1 million on a particular part and not realize it. That’s a small example that could extend across tens of thousands of parts that are used in a plant every year,” said Weinberg.
The magic formula for addressing the issue of bad data boils down to increased discipline and a sound methodology for both organizing data hierarchy and data governance. Managing via a hierarchy of assets is a critical success factor. Within that hierarchy, a bill of materials is required for each asset. Within the bill of material for that asset, accurate parts data is required. Within that parts data, critical spares need to be identified. Those are parts that, if they are not available immediately, or within a very short period of time, a shut down in manufacturing production is likely.
Impact of new technologies
New technology trends such as the Industrial Internet of Things (IIoT) will only add to the quantity of data that will need to be managed. For instance, IIoT technologies can help to improve the quality of condition monitoring of assets by increasing visibility into physical plant operations (by gathering real-time data surrounding vibration analysis, temperatures, motor rpms, hours of operation, for example), so that maintenance events can be triggered before unanticipated breakdowns occur. The data from these systems is now integrating into systems that manage spare parts inventory, and the related supply chain activities that are required to secure the spare parts.
“Without accurate and well curated data, it becomes harder to leverage IIOT to your competitive advantage. In fact, the reverse is true. It’s more information that will limit your ability to make the right decisions that drive profitability,” said Weinberg.
However, a solid MRO plan, one that takes into account data governance and stewardship, can help break the cycle of high cost, low efficiency MRO. “As industries as a whole become more commoditized, MRO will become more tightly integrated with plant and facilities reliability efforts. If an organization’s MRO is not tight, their lack of high reliability will drive up costs and ultimately lower end customer satisfaction levels,” said Weinberg.
Synovos provides cloud-based technology and services that streamline and connect MRO supply chain and enterprise asset management initiatives. Synovos maps effective strategies that support changing business dynamics and uncover the untapped value of MRO and asset management. Its flagship Synovos SYNC™, offered as a software-as-a-service, provides a unified EAM platform that connects all aspects of asset performance across the organization – for data integrity, enterprise visibility and task orchestration, ensuring production uptime and better decision-making. For more information visit www.synovos.com.
Chief Marketing Officer and Senior Vice President, Corporate Development
Dennis Bouley is Editorial Director of MyPurchasingCenter.com and special advisor to MediaSolve Group, a strategic B2B marketing services firm focused on helping companies and institutions leverage the web and social media to achieve business goals. He spent 18 years at Schneider Electric as Managing Editor of Global Publications, and was responsible for cross-division management of the corporation’s white paper and customer success story processes. Prior to that, he spent 10 years working for IBM managing both small and large accounts. He holds a Bachelor of Arts in Journalism from the University of Rhode Island and holds a Certificat Annuel from the Sorbonne in Paris, France.
Despite the increased digitization of many business functions, the contract management function has lagged behind at many organizations. Read More
The way that most companies are deploying their source-to-pay process is changing. While large organizations tend to push towards end-to-end automation of the process, mid-market and smaller organizations are still faced with a significant mix of au… Read More
ProcureCon Direct - Need to update yourself on the future of direct procurement and the impact of incoming millennials on your industry? Read More
Staples Advantage is the one supplier that offers all the business solutions you need, all with the expertise of a specialty vendor. Read More
It started in 1972 with an idea, a new concept in distribution. Today, Digi-Key Corporation is one of the fastest-growing electronic component distributors in the World. The stimulus for this growth is Digi-Key's customer-centered business philosophy… Read More
Procurement and supply management leaders have a seat at the table, and management’s expectations are high. But what do CEOs really want, and is purchasing delivering on these expectations? This webcast looks at how procurement and supply management … Read More
At world-class companies, purchasing’s influence touches just about every area of spending. But, how exactly do procurement teams get to the point where other departments approach them for help with sourcing such indirect categories as human resource… Read More