today’s technology and services to drive material data ... · dirty item master data material...

Fuel the Enterprise with Clean Master Data – Consolidated Product Spare Parts Master

Data strategy and systems delivery

backed by deep domain expertise

Today’s Technology and Services to

drive material data performance.

Welcome to our May Webinar

A Material (Product Spares and Item) Catalog is a Gateway

to Operational Excellence and Strategic Procurement

© 2014 Verdantis Inc. All Rights Reserved.

Agenda

• Defining the value & components of a clean consolidated Material Catalog

Jay Fielding: Regional Sales Manager

“A Material (Product Spares and Item) Catalog is a Gateway to

Operational Excellence and Strategic Procurement”

• Operational value from a clean consolidated Material Catalog

Kurt Nyffeler, Managing Director, Business Intelligence

• Strategic sourcing value from a clean consolidated Material Catalog

Arthur Raguette, Executive Vice President Verdantis, Inc.

• Verdantis Automated Approach to Data Quality and Governance

Next Steps: Verdantis Evaluation Options: POC

Jay Fielding, Regional Sales Manager Verdantis


Material Master Data – Improve PerformanceCommon Drivers for Consolidated Catalog:

Data quality for new ERP/EAM, acquisitions, equipment and locations

Improving inventory levels and visibility across global locations

Global management of enterprise businesses

Improving global sourcing through more effective intelligence and data

Verdantis MDM solutions are designed around these three criteria.

1. Reduce Costs and Drive Business Value:1. Reduce Costs and Drive Business Value:Ensuring the business has the right processes and data to realize improved

value in their operations.

2. Master Data Compliance and Standards:To assure enterprise compliance and a single view of the company’s Master

Data. To most effectively utilize resources for data quality, maintenance and

approval processes

3. IT Standards and Compliance:Furthermore, to assure that the MDM solution cooperates with IT standards

and solutions for enterprise architecture, security and applications.


Dirty Item Master DataMaterial Group Code Input Data

3MM 050

3MP 100

3PM 110

3PN 133

3019BEARING,BALL,50MM ID X 96.5MM OD , 5212 FAF

BALL BEARING SKF, 6316RS

BEARING BALL, 65MM ID X 140MM OD X 33MM

BEARING, BALL, AR23144CKYW,SKF

BEARING,BALL,, 30MM ID

What is dirty data?

• Poor unstructured descriptions with limited attribution

• Inaccurate or non-existent Spend classification or noun modifiers

• Inconsistent abbreviations and UoM

• Lack of manufacturing name and part number

• Duplicates


Common Material Projects – Historic Core Components

• Standards

� Data

� Data Ownership

� Data

Stewardship/Governance

Data Standards:

• Classification, Taxonomy, Noun Modifier

• Specifications/Data Template

� Type, RPM, Hertz, Frame, Voltage

� Additional information like

application and nick names.Stewardship/Governance

• Process, Automation or

Methodology and Resources

for Project

• Non-source enrichment

• Approval Processes

• MDM/ERP repository

application and nick names.

• Critical and Non Critical Attributes

• Abbreviation Dictionary

• UOM Dictionary

• Short and Long Material Description

• Material Group, Mfr. Name & Part Nbr.

• Local and Department Views


Central Consolidated Item Catalog

• A single Master Item ID with extension

to multiple sites/plants and optional links to

multiple preferred suppliers

• Items set up to standards reflected in

short and long descriptions.

• Local plant and department views

centrally maintained.

Central

Item Master

Repository

New Part

Requesters at

Edge of Org.

System Synch

ERPs

EAMs

centrally maintained.

• Relevant Items kept in multiple

languages as required.

• Synchronization to single or multiple

ERP/EAM/MDM systems

• A governance process and plans to keep to

standards as new Items are added.

Repository

with MDM

Automation

Enterprise

Suppliers

Enterprise

Touch Points

Manufacturing,

Accounting,

Maintenance,

Services,

Compliance,

Procurement,

Engineering,

Suppliers

eProcurement

Data

Quality

Solution

s© 2014 Verdantis Inc. All Rights Reserved.

Material Master Data –Drive Performance



More efficient search Cross plant / business unit visibility

Create new parts without duplicates Reduce inventory costs

Reduce engineering costs Enhanced spend management

Verdantis Short Description Verdantis Long Description


Introducing Kurt Nyffeler, Managing Director, BI

Newbold Advisors

Project Management

Data & Industry Domain Expertise

Newbold Advisors and Verdantis Automated Material Data Management Solutions

Tag

MDM and Catalog Consulting

Business Case Development

Professional Services

Systems Integration BI Reporting and

Analysis


Agenda













Newbold Advisors

� Founded in 2006 to provide consulting services to the financial sectors of

banking and mortgage - now over 450 strong

� Kurt Nyffeler, Managing Director, began Data

Management Practice in 2012

� Nearly 30 years in BI, 15 years in Master Data Management

and ran the Global BI Practice with over 1000 consultants for

a major global consulting firm

• Oil & Gas portion of the practice staffed with industry experienced data

management consultants

• We have worked with 10 Fortune 100 and 20+ Fortune 500 companies

• Newbold Advisors offers an extensive array of Data Services ranging

from strategic thought leadership to bulk data cleansing


Newbold Data Management Offerings

• Consulting Engagements:

– Master Data and Business Intelligence Roadmaps

• Planning including Definition, Strategy and Cost/Benefit-justified Business Cases

– Design, Develop and Support of BI/DW, MDM and BPM

• Frameworks, Governance and Stewardship

• Data Cleansing & Attribution Out/In-Sourcing

– Rapid Assessment of Data Readiness (RADaR)

• Critical data health analysis preceding Projects, Mergers and Acquisitions activities• Critical data health analysis preceding Projects, Mergers and Acquisitions activities

• Highly Experienced Consultants:

– Business Intelligence (BI)

– Data Warehousing (DW)

– Data Integration & Extract Transfer Load (ETL)

– Master Data Management (MDM)

– Data Quality Management (DQM)

– Business Process Management (BPM)


Newbold Consultant Data Management

ExperienceCustomer Timeframe Domains Roles Approach Technology Related BI Work

Large OFS 2000-2002 • Product • Roadmap

• Implementation

Registry • SAP/BOBJ

• Oracle

• Microsoft

Foundation for initial

E-ODS

Independent Oil

Company

2003 • Business

Associate

• Roadmap

• Implementation

Registry • SAP

• Fuego (Oracle BPM)

• Microsoft

-

Large E&P 2004 • Well • Business Case

• Roadmap

• Implementation

Analytics • SAP

• Oracle

• Business Objects

Production vs. Decline

dashboard

Large OFS Division 2008-2010 • Customer

• Supplier

• Product

• Roadmap

• Implementation

Registry • Oracle

• Informatica

• Microsoft

Data mart

Large EPC 2009 • All • Roadmap Hub • Oracle

• Microsoft

Roadmap

Large OFS 2010 • Customer

• Supplier

• Product

• Roadmap Custom Hub • SAP

• Business Objects

-

Large Manufacturer 2011 • Product • Roadmap

• Implementation

Registry • Oracle

• Microsoft

Full BI/DW

implementation

Large OFS 2009-2014 • Rig

• Facility

• Supplier

• Product

• Business Case

• Roadmap

• Implementation

Custom Hub

(Hub)

• SAP

• Oracle

• Microsoft

• DataFlux

BI Roadmap

EIM Architecture

Large OFS Division 2013-2014 • Product • Data Cleansing &

Enhancement

Registry • Oracle

• Dassault

-


The Cycle of Competitive Advantage

Requires Good Information

Plan

ActAnalyze Business

Processes

� Today’s Companies must…

� Be “Agile”; quickly respond to market changes and

opportunities

� Manage more by fact to support existing intuition

� Have high awareness of behavior, feedback and

needs

� Achieve product, service and supply chain

excellence

Measure

excellence

� Be open; allowing unfettered access to information

� The “Cycle of Competitive Advantage” must operate rapidly and regularly

� Process information is the key to enabling Measure, Analyze and Plan

� This is the role of Business Intelligence and Corporate Performance Management

� However, GIGO applies: “Your Insight Quality <= Your Information Quality”


Pyramid to Wisdom

Wisdom

KPIs

Data Science

Business

Intelligence

Transactional Context

Systems

Processes

Master Data

Management

Business Process

Management


O&G Information Value Extraction

Progress


Product MDM Business Case

Category ExamplesOperational

Benefit

Analytics

Benefit

Compliance • Ease compliance coding and reporting

• Purchase contract compliance

• SOX Accountability� �

Cycle Times • Reduce lead, sourcing and procure-to-pay times, incorrect shipments

• Shorten make-versus-buy and speed-to-market

• Reduce engineering and ECO cycle time� �

Error Reductions • Inaccurate product updates and price-related errors

• Less warehousing and logistics issues, error corrections

• Fewer write-offs from product returns and invoice errors� �

Inventory • Inventory optimization; reduce inventory levels, turn and visibility

• Reduce out-of-stock conditions and write-offs � �

Business System Upgrades

• Establish specific deadlines

• Optimal time to address/fix • Reduce out-of-stock conditions and write-offs

• Reduce manufacturing disruptions, increased uptime� �

Performance Analysis • Supplier performance analysis

• Part quality performance

• Product profitability � �

Sales Benefits • Reduced out-of-stock and equipment down time

• Better searches for salespeople and Customers; loyalty

• Improves ability to cross- and up-sell; “value pricing”� �

Support Costs • Reduce data maintenance efforts

• Lower analysis and reporting production effort

• Reduce data and application integration efforts� �

Technology • Reduce M&A system/data integration time and risk

• Minimize "breakages" when systems change

• Compatibility with GDSN standards� �

redundancies

• Vastly reduces go-live risk

• Optimizes value of new system

• Maintains “buzz” for OCM


Common Misconceptions

The Thought The Reality

It’s too expensive The ROI is HUGE, plus your competitors are moving, so you can’t

afford not to get started

It’s simple and we are smart, so… You are smart, but this is a large minefield; get help or lose a leg

Our ERP SI will take care of this Would you have a data management consultancy implement your

ERP??

This is an IT project This is an iterative business/IT journey, lots of integration

There are only a few systems Parts are a huge part of your business, so the data is everywhere

We’ll build the classifications ourselves You can’t quickly define and agree on 1,000’s of classifications

We’ll clean the data ourselves 60 parts/man-day = 16k days for 1 mil items

Data cleansing won’t take very long See above!

Only technical attributes are important The commercial attributes are half the number and in more systems

A Product Hub isn’t needed Maybe, but what system will effectively handle both tech/comm’l

attributes and integrate?

We can use a multi-domain MDM tool These can’t handle 1,000 of specifications


Takeaways

• You won’t realize the full value of your business systems or reach full potential of your analytics without MDM

• The ROI of MDM projects is huge– Status quo is the highest cost for your current problems

– Start with a business case, then iterate/integrate

• Your competitors are moving forward, so stay competitive• Your competitors are moving forward, so stay competitive

• A major system implementation is an excellent catalyst

• Specifications and cleansing take a long time, so start early

• Leverage everything you can; use services and standards

• Have an experienced third party help you learn how to fish

• Don’t be afraid of new/additional technologies


Agenda













Business Impacts of Poor Material / Part Master Data

Balance Sheet and Income Statement ImpactBalance Sheet and Income Statement Impact

Research Analyst View Research Analyst View –– ProductivityProductivity

• Productivity Impact

• New Product Development Impact

• Customer Satisfaction (Revenue) Impact

Balance Sheet and Income Statement ImpactBalance Sheet and Income Statement Impact

• Case Study

• Asset Optimization

• Procurement Optimization

Product or Service Flow Product or Service Flow –– Outage ImpactOutage Impact

• True Costs of Down Time

• Monetary Impact of Down Time


MDM Impact on Production Oriented Processes


MDM Impact on ERP ROI


Balance Sheet and P&L Impacts of the

Material Master

Process Manufacturer Process Manufacturer or Services Provideror Services Provider

• 8 Billion Annual Revenue

• 1 Billion Annual MRO Spend

• 400 Million Inventory Value

• MRO Material Master Count

Verdantis Verdantis Harmonize® Harmonize® & & Integrity® Integrity®

• Harmonization Results

• SKU Count

• Post Cleansing and Enrichment - 340,000 Unique Items

• Raw Count Improvement

• 15% reduction in total SKUs

• 10% identification of duplicate inventory assets

• Post Initial Merge of Systems 400,000 Items


• Annual Inventory Carry cost reductions of 4.4% (Factored cost of

capital) as write-down (positive impact to balance sheet)

• 400 Million in Inventory

• 10% Duplicate Identification

• 40 Million in Duplicate Inventory value

• Write Down of Factored Costs at 4.4% of 40 Million = $1,760,000

Cost Reduction on aggregation of demand across 15% of $1BN in MRO

Material MDM – Hard Dollar Benefits of

Harmonize®

• Cost Reduction on aggregation of demand across 15% of $1BN in MRO

• 1 Billion in Maintenance, Repair and Operations Material

• 15% Identified through Harmonization as Similar (Across 10% Supplier Base)

• 150 Million addressable spend

• 12.5% reduction in costs through strategic sourcing

• Cost Reduction of 12.5% of $150 Million = $18,000,000

– Annualized Net Cost Reductions of $19,760,000


• Verdantis Integrity for Reduction of Maverick Spend

• 80% of the 1B Maintenance, Repair and Operation Spending is covered by

preferred / pre-negotiated contracts - $800 Million in Spend

• Data Governance improves Catalogue Quality –Reduced Maverick Spend

from 40% to 25%

• 15% gain in compliance = an additional 120 Million in contracted spending

• Average of 16.5% Cost Reduction for pre-negotiated categories

Material MDM – Hard Dollar Benefits of

Integrity®

• Average of 16.5% Cost Reduction for pre-negotiated categories

• Cost Reduction of 16.5% of 15% of $800 Million = $19,800,000

Combined Annualized Net Cost Reductions of $39,560,000


Impact Value of Data Quality


Agenda













• Verdantis brings over 12 years of Material and

Supplier Master expertise and projects with

Global clients to the market with unmatched

technology and attention to ROI.

• Experts in Spend Classification and Attribution.

• SaaS deployed solutions to more cost-effectively

and timely compliment major ERP/EAM and

Legacy systems.

Verdantis, material master data cleansing and governance

Artificial Intelligence: Suite

• AutoClass, AutoSpec, AutoNorm,

AutoCrawl.

• Repeatable processes with 12 years

training across over 100 M MRO and 4

Trillion Lines of Direct Transactional

Spend

Harmonize: Self-service, Verdantis, HyrbidLegacy systems.

• The most comprehensive suite for collaborative

and automated high speed batch material data

cleansing solutions under Harmonize brand.

• Options for On-going new Item create and

governance with embedded classification and

attribution models under Integrity brand.

• Integrity leverages classification model,

values, spec sheets, abbreviations, UOM

and more from Harmonize

Harmonize: Self-service, Verdantis, Hyrbid

1. High speed repeatable processing by

custom batches by any definition such as

category, supplier, location etc.

2. Collaborative workflow to bring right

resources into project at just the right

time by batch.

3. Over 3700 Verdantis Data Template

Spec Sheets base for MRO.


Verdantis Automated Material MDM Solution Suite

GET IT CLEAN

VERDANTISHARMONIZE

Automated solution

for historical master

data harmonization

Fully automated

solution to cleanse

and enrich historical

master data

Offered historically as

Automated solution

for real-time on-going

data integrity

VERDANTIS INTEGRITY

KEEP IT CLEAN

MDM/MDG application

to prevent duplication,

and ensure on-going

data integrity

AI Technology

VERDANTIS AUTOMATED MDM SOLUTION SUITE

Offered historically as

A turn-key service

Now also offered as

Licensed SaaS

Platform

Artificial Intelligence forms the bedrock of Verdantis’ automated MDM solution suite

AutoClass AutoSpec AutoNorm AutoCrawlClassification into

pre-determined

codes

Attribute extraction

& de-duplication

software for

Material master

Normalization

& validation of

MFG, MPN and

UOM

Intelligent web

spidering tool for

Data harmonization

Verdantis Knowledgebase

Dynamic content Repository

AI Technology

AI-based Software Tools

AutoClass AutoSpec

AutoNorm AutoCrawl


Material Master - Automated Classification

Material master contains details of a variety of data elements including part

number, description and stocking codes

Software Tools

Automated Granular

ClassificationClassification

Material Group Code Input Data

3MM 050

3MP 100

3PM 110

3PN 133

3019BEARING,BALL,50MM ID X

96.5MM OD , 5212 FAF

BALL BEARING SKF, 6316RS

BEARING BALL, 65MM ID X

140MM OD X 33MM

BEARING, BALL,

AR23144CKYW,SKF

BEARING,BALL,, 30MM ID


• Embed Advances in categorization, classification, and clustering

– Next generation of Artificial Intelligence based classification combined with post

processing closed-loop feedback


Material Master - Attribute Extraction

MFR NAME

MFR PART NUMBER

Category Code

SHORT NAME BEARING TYPEBEARING INSIDE

DIAMETER

BEARING OUTSIDE

DIAMETER

BEARING WIDTH

INTERNAL CLEARANCE

Additional Information

SKF 6316RS 31171504 BEARING,BALLANGULAR CONTACT,DOUBLE ROW

65 MM 140 MM 33 MM IBI 14043

31171504 BEARING,BALLANGULAR CONTACT,DOUBLE ROW

65 MM 140 MM 33 MM IBI 14043

SKF AR23144CKYW 31171504 BEARING,BALLANGULAR CONTACT,DOUBLE ROW

140 MM 180 MM 62 MM

31171504 BEARING,BALLANGULAR CONTACT,DOUBLE ROW

30 MM 40 MM 23 MM

FAFNIR 5212-W 31171504 BEARING,BALLANGULAR CONTACT,DOUBLE ROW

50 MM 96.5 MM 33 MM C3


Material Master - Short & Long Description of Parts

Harmonize processed outputInput Columns Quality check


Input Data

Part ID Description Manufacturer Manu_Num

82.69272 Bolt, stud 4.000 len alum w/nuts B7 Fastenal FA32873

AutoClass Output

Stud bolt

AutoSpec Output

DIAMETER

LENGTH

FINISH/COATING

MATERIAL GRADE

4 IN

B7

0.625IN

Plain

Harmonize process for determining HTS-ECCN classifications


Critical attributes Attributes extracted from Verdantis Dynamic Content repositoryNon-critical attributes

MATERIAL GRADE

MATERIAL

B7

Aluminum

3926.90.99.80 Material Plastic / Nylon

7318.15.50.30 Material Stainless Steel

7318.15.50.90 Material Iron Or Steel

7415.33.80.10 Material Copper Outside Diameter >= 6mm

7415.33.80.50 Material Copper Outside Diameter < 6mm

7508.90.50.00 Material Nickel

HTS classification Decision Matrix

HTS Number Criteria 1 Value 1 Criteria 2 Value 2

7616.10.90.30 Material Aluminum Outside Diameter < 6 mm

7616.10.70.30 Material Aluminum Outside Diameter >= 6 mm

Fully automated solution driven by robust

AI-based technologies

Verdantis Material Integrity (MI)

Material Master

Data

Management that

integrates with

your ERP

backbone

Materials can now be

closely tied across

the enterprise for an

efficient supply

chain

SAP

Oracle

Maximo

Comprehensive

workflow flow

Seamless integration with

enterprise IT systems

(ERP, SRM, SCM)

And others

backbone

Real-time data

synchronization

that allows single

version of clean,

accurate material

data

Access to

accurate

material data for

procurement and plant

management teams

Verdantis Material Integrity

JD Edwards


42


We can help: Verdantis Free POC Evaluations

• Determine POC Objectives and Scope

• # of Item Masters and Source Systems

• Select Data Sample

• Language requirements: Free English

• Select Taxonomy & Attribute Templates

• Verdantis Processes Data

0200400600800

10001200140016001800

0 5

838

1,656

Segment

Family

Class

Commodity

• Verdantis Processes Data

• Fully Classify POC data set

• Fully Cleanse a subset of data

• Non Source Enrich a subset of data

• Flag duplicates for processed Items

• On-site Review of Deliverables

• Data Analysis and Output

• Draft Budget Proposal

• Business Case Recommendations

Learn:

• Quality of Data

• Compatibility to automated

approach

• Potential duplicate levels

• Estimated budget

• Recommended Scope &

Resources


PRODUCT

HARMONIZE

Quality Master Data to Improve your

Business Performance

MATERIAL

HARMONIZE

CUSTOMER

HARMONIZE

SUPPLIER

HARMONIZE

CLEAN IT WITH HARMONIZE

PRODUCT

INTEGRITY (PIM)MATERIAL

INTEGRITY (MI)

CUSTOMER

INTEGRITY (CIM)SUPPLIER

INTEGRITY (SIM)

KEEP IT CLEAN WITH INTEGRITY


Master Data Solutions

www.verdantis.com

[email protected]

Toll Free +1 866 987 4463

Get access to many more research papers and case studies in our Knowledge hub!


Q & A

Quality Master Data for Improved Business Performance

Q & A


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