How Master Data and Master Data Leadership Simplifies Business and Cuts Costs

By George E. Krauter

April 20, 2017 at 2:44 PM

In the world of MRO supply chain management, “master data” refers to applying proper and consistent descriptions to every stock unit that exists in the MRO and production storerooms. What benefits are derived from spending time and money on achieving optimum data descriptions?

Here is an example of the cost dangers that often accrue from poor and inaccurate SKU descriptions:

A specialty chess set manufacturer makes chess sets from unique fasteners and standard nuts and bolts. SKU’s are established for parts that are needed to assemble, pack and ship chess set units to clients. There is a variety of materials and configurations that go into the various chess men; no two sets are the same. Game pieces are made using different parts for different set configurations. For example, a queen may have a brass hex head cap screw base, plated external lock washers as a collar, and a brass Nylok hex nut as a crown or a plated base and a stainless-steel crown.

Design engineers define parts for each set, establish the SKU, and place requisitions with procurement to order the parts needed to fill the SKU locations. Finance is responsible for cash flow and wants to control inventory at optimum levels. This is when Master Data Leadership should come into play.

Engineer, Tom, designs a Castle piece with a socket head base, a black heavy hex nut, fender washers and a slotted hex nut on top. Engineer Bob, designs the same piece and calls it a Rook, calls the fender washer a “flat washer” [essentially the same], and the slotted hex nut a “Lock Nut”. The Castle has four SKU’s assigned to the part in stock; the Rook has the same parts in stock but under different SKU numbers. So, there are duplicate inventories for the same parts; so what? Here is what:

 

  • Finance is unhappy because of too much unnecessary inventory.
  • Assembly people are unhappy when one unit is out of stock under a known description, but really in stock under a different description.
  • Management is unhappy because of the need to place rush orders and incur excessive freight and personnel costs.
  • Clients are unhappy; shipment promises have not been kept.

 The situation is augmented when you consider a Horse could be [is] called a Knight.

Just imagine the costs added to operations when a company has 25,000 SKU’s and multiple engineers setting up new parts under their own descriptions. Master Data Leadership is a critical function that must be implemented to reduce costs and add to the company’s bottom line.

Master Data activities align all SKU’s under the same description protocol to identify and eliminate duplications and optimize inventory. Master Data Leadership takes this protocol and connects the SKU control to the varying needs of reliability maintenance and production requirements, including asset management and supply chain.

Blogger:

George Krauter currently serves as Vice President for Synovos in Radnor, Pa. He is recognized as the originator of the concept that became known as “integrated supply.” He has participated as a guest speaker at Reliability 2.0, ISM Indirect Conference, International Maintenance Conference (IMC), The Conference Board, and events for APICS, SMRP, and ISM professional chapters.

George is recognized as an authority on methods to achieve reliable, maintenance-connected MRO storerooms; he has published his experiences in Uptime Magazine, Food Manufacturing, My Purchasing Center, and Supply & Demand Chain Executive. He holds a B.A. and M.B.A.A. from Temple University (Philadelphia) and has conducted seminars internationally (Oslo, Abu Dhabi) as well as sessions at Duke University, MIT, Howard University, and Temple.



Tags: MRO master data master data leadership SKU descriptions SKU numbers
Category: News Article

George E. Krauter

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George Krauter currently serves as Vice President for Synovos in Radnor, Pa. He is recognized as the originator of the concept that became known as “integrated supply.” He has participated as a guest speaker at Reliability 2.0, ISM Indirect Conference, International Maintenance Conference (IMC), The Conference Board, and events for APICS, SMRP, and ISM professional chapters. 

George is recognized as an authority on methods to achieve reliable, maintenance-connected MRO storerooms; he has published his experiences in Uptime Magazine, Food Manufacturing, My Purchasing Center, and Supply & Demand Chain Executive. He holds a B.A. and M.B.A.A. from Temple University (Philadelphia) and has conducted seminars internationally (Oslo, Abu Dhabi) as well as sessions at Duke University, MIT, Howard University, and Temple. He lives in Bucks County, Pa., with his wife Joyce; all grandkids live within eating distance. You may reach George by phone at 610-246-6492.



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