Webinar : 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 WebinarA Material (Product Spares and Item) Catalog is a Gateway

to Operational Excellence and Strategic Procurement

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

© 2014 Verdantis Inc. All Rights Reserved.

Agenda

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

Jay Fielding: Regional Sales Manager

• Operational value from a clean consolidated Material CatalogKurt Nyffeler, Managing Director, Business Intelligence

• Strategic sourcing value from a clean consolidated Material CatalogArthur Raguette, Executive Vice President Verdantis, Inc.

• Verdantis Automated Approach to Data Quality and GovernanceNext Steps: Verdantis Evaluation Options: POCJay Fielding, Regional Sales Manager Verdantis

“A Material (Product Spares and Item) Catalog is a Gateway to Operational Excellence and Strategic Procurement”


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: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

• Process, Automation or Methodology and Resources for Project

• Non-source enrichment

• Approval Processes

• MDM/ERP repository

Data Standards:

• Classification, Taxonomy, Noun Modifier

• Specifications/Data Template Type, RPM, Hertz, Frame, Voltage Additional information like

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 viewscentrally 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.

Central Item Master Repository with MDM

Automation

New Part Requesters at Edge of Org.

Enterprise Touch Points

Manufacturing,Accounting,

Maintenance,Services,

Compliance, Procurement, Engineering,

Suppliers

System Synch

ERPs

EAMs

eProcurement

Data Quality Solution

s© 2014 Verdantis Inc. All Rights Reserved.

Material Master Data –Drive Performance

Verdantis Short Description Verdantis Long Description


More efficient search Cross plant / business unit visibilityCreate new parts without duplicates Reduce inventory costsReduce engineering costs Enhanced spend management


Tag

Introducing Kurt Nyffeler, Managing Director, BI Newbold Advisors

Project ManagementData & Industry Domain Expertise

MDM and Catalog ConsultingBusiness Case Development

Professional Services

Systems Integration BI Reporting and Analysis

Newbold Advisors and Verdantis Automated Material Data Management Solutions


Agenda








Newbold Advisors

• 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

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


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

• 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 Experience

Customer 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 RoadmapEIM Architecture

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

Registry • Oracle• Dassault

-


The Cycle of Competitive Advantage Requires Good Information

Plan

Act

Measure

Analyze 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 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

Transactional Context

Systems

Processes

Business Intelligence

Master Data Management

Business Process Management


1990s

2000s

2010s

2020sM

DM

O&G Information Value Extraction Progress

1st ERP

Addt’l

Appl’s1st DW

Web &

Portal

EAI 2nd ERP

2nd DW

Big Data

BPM


Product MDM Business Case

Category Examples Operational 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• 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

Business System Upgrades

• Establish specific deadlines

• Optimal time to address/fix

redundancies

• Vastly reduces go-live risk

• Optimizes value of new system

• Maintains “buzz” for OCM


Common MisconceptionsThe 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• 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 Impact

Research Analyst View – Productivity

• Productivity Impact

• New Product Development Impact

• Customer Satisfaction (Revenue) Impact

• Case Study

• Asset Optimization

• Procurement Optimization

Product or Service Flow – Outage 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 theMaterial Master

Verdantis Harmonize® & 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

Process Manufacturer or Services Provider

• 8 Billion Annual Revenue

• 1 Billion Annual MRO Spend

• 400 Million Inventory Value

• MRO Material Master Count• 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• 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

Material MDM – Hard Dollar Benefits of Harmonize®


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

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

Material MDM – Hard Dollar Benefits of Integrity®


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.

• 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

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, 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

VERDANTIS AUTOMATED 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 asA turn-key service

Now also offered as Licensed SaaS

Platform

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

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 KnowledgebaseDynamic content Repository

AI TechnologyAI-based Software ToolsAutoClass AutoSpecAutoNorm AutoCrawl


Material Master - Automated Classification

Material master contains details of a variety of data elements including partnumber, description and stocking codes

Software ToolsAutomated GranularClassification

Classification

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 33MMBEARING, 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


MFR NAME

MFR PART NUMBER

Category Code SHORT NAME BEARING TYPE

BEARING INSIDE

DIAMETER

BEARING OUTSIDE

DIAMETER

BEARING WIDTH

INTERNAL CLEARANC

E

Additional Information

SKF 6316RS 31171504 BEARING,BALL

ANGULAR CONTACT,DOUBLE ROW

65 MM 140 MM 33 MM IBI 14043

31171504 BEARING,BALL


65 MM 140 MM 33 MM IBI 14043

SKF AR23144CKYW



140 MM 180 MM 62 MM



30 MM 40 MM 23 MM

FAFNIR 5212-W 31171504 BEARING,BALL


50 MM 96.5 MM 33 MM C3

Material Master - Attribute Extraction


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

Critical attributes Attributes extracted from Verdantis Dynamic Content repository

Non-critical attributes

AutoSpec Output

DIAMETER

LENGTH

FINISH/COATING

MATERIAL GRADE

MATERIAL

4 IN

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

0.625IN

Plain

HTS classification Decision Matrix

HTS Number Criteria 1 Value 1 Criteria 2 Value 2

7616.10.90.30 Material Aluminum Outside Diameter < 6 mm

Harmonize process for determining HTS-ECCN classifications

7616.10.70.30 Material Aluminum Outside Diameter >= 6 mm


Fully automated solution driven by robust AI-based technologies

Comprehensive workflow flow

Seamless integration with enterprise IT systems (ERP, SRM, SCM)

Verdantis Material Integrity (MI)

And others

Material Master Data

Management that integrates with

your ERP backbone

Materials can now be closely tied across the enterprise for an efficient supply chain

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

SAP

Oracle

Maximo

JD Edwards


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 • 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

Segment Family ClassCommodity0

200

400

600

800

1000

1200

1400

1600

1800

0 5

838

1,656

Series1

Learn:

• Quality of Data• Compatibility to automated

approach• Potential duplicate levels• Estimated budget• Recommended Scope &

Resources


PRODUCTHARMONIZE

PRODUCT INTEGRITY (PIM)

Quality Master Data to Improve yourBusiness Performance

MATERIAL HARMONIZE

MATERIAL INTEGRITY (MI)

CUSTOMERHARMONIZE

CUSTOMER INTEGRITY (CIM)

SUPPLIERHARMONIZE

SUPPLIER INTEGRITY (SIM)

CLEAN IT WITH HARMONIZE

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!


http://www.verdantis.com/

mailto:[email protected]

http://www.verdantis.com/knowledge-hub/whitepapers.html

http://www.verdantis.com/knowledge-hub/case-studies.html

http://www.verdantis.com/knowledge-hub/overview.html

Quality Master Data for Improved Business Performance

Q & A


Webinar : Fuel the Enterprise with Clean Master Data - Consolidated Product Spare Parts Master

Technology

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