5 Process Fails In Mro Master Data Management

By Author: Zynapse
Total Articles: 3
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MRO is a class of parts and materials purchased by a business to adequately stock inventory levels in support of its internal operational requirements. Companies necessarily invest their resources and energy into things like product design, sales and marketing, production efficiency, tight process control, information technology, and supply-chain management thereby neglecting the company’s MRO supply chain management.

Let’s take the case of a manufacturing company that has never had a process in place to control when, how, or by whom materials item and supplier masters get created for MRO goods in ERP. Think about:
• The number of plants the company might be operating,
• The geographic (and linguistic) sprawl of its plants,
• The number of machines operating in the plants,
• The number of moving parts within the machines,
• The number of years in which the machines have been operating,
• The number of different people who—over those years—have been called to service or repair the machines and purchase replacement parts for them,
• The sheer quantity and ...
... variety of consumable MRO items that get used every day in operations,
• The number of different suppliers that provide those consumable MRO items, and
• The number of mergers or acquisitions the company is likely to have gone through over the years.

Considering the above situation one gets a picture of the vast duplication, misclassification, inconsistency, and inaccuracy that permeates typical industrial enterprises’ ERP ecosystems related to MRO. This coupled with lack of data stewardship, data ownership and data governance tools in place only aggravates the host of challenges that stand between industrial companies and optimized MRO supply chains. Let us take a quick look into 5 epic process fails that are set in motion due to bad MRO Master Data:

1.Rush MRO orders:
In critical MRO stockout situations standard procurement disciplines such as buying from approved/preferred supplier lists, competitive bidding and negotiation, or searching thoroughly to find acceptable alternatives to typically expensive OEM aftermarket parts are subverted which results in premium product prices and expedite freight prices.

2.MRO Safety Stockpiles
Due to lack of proper data classification and taxonomy process in place, failure to search for an MRO item, not only leads to an unnecessary order (as above), it also leads to unnecessary inventory. This clearly overrides inventory optimization endeavours for the enterprise which directly affects the enterprise profitability.

3.Preventive Maintenance:
While preventative maintenance is typically triggered by testing, visual inspection, electronic sensors and/or OEM recommendations for maintenance scheduling, insight into real parts consumption as it relates to particular machines might go a long way to making preventative maintenance more science than art. Dirty MRO master data, however, makes such a scenario impossible to contemplate.

4.MRO Demand Forecasting:
Inability to accurately read MRO consumption patterns from an enterprise level undermines an organization’s ability to predict demand for consumable MRO items. Industrial enterprises may have bolt-on solutions for creating visibility into MRO consumption (versus spending). But if the item source data in ERP is duplicated, inaccurate, incomplete, and poorly classified, then the process of setting min/max quantities and automated order triggers becomes corrupted as well. When demand-pull inventory practices don’t work well, people stop trusting them and start building secret stockpiles, which may be invisible to ERP.

5.MRO Downtime Arithmetic
Searching for a part item in an ERP system with duplicated, misclassified, inconsistent and inaccurate data systems, added with the additional time lost in creating new item, supplier records, ordering and waiting for the parts to arrive, followed by time required in fixing, testing and adjusting machine leads to a lot of machine downtime which translated in dollar value gives an estimate opportunity cost of $10,000 K per minute!

Leading companies are increasingly embracing master data management solutions that combine automation with domain intelligence for MRO item master harmonization projects with their ERP implementation projects. Best-of-breed solutions, such as Zynapse Harmony automate the material master data harmonization process, ensuring scalability, consistency, and reduced total project costs. Given the huge investment for any ERP project, investing in a Master data harmonization project in tandem with the ERP Implementation project ensures that the full potential of ERP system is realized.

About Us: Zynapse is the Master Data Management (MDM) division of Zycus, which provides solutions for ERP projects.Zynapse is the only player to offer end-to-end automated ERP MDM solutions. After experiencing sub-optimal results with conventional approaches, an increasing number of Global 2000 companies are opting for Zynapse's cutting-edge automated solutions to ensure success of their MDM initiatives.