MRO Master DataManagement forEnhanced MaintenancePerformance

MRO Master Data Management for enhanced Maintenance

Performance

Global organizations today face a variety of challenges arising from several

sources and with time, the nature, scope and size of these challenges change and

increase. Unpredictable and volatile economic conditions in recent times have

pushed companies on back foot. Organizations are increasingly focussing on

cost-saving and cost-cutting measures to maintain their revenues and safeguard

their bottom-line. Most business enterprises typically align their sustainability

efforts towards direct materials, capital spending, product design, production

efficiencies, sales and marketing, tight process control, information technology,

and supply-chain management both for inbound flows of direct materials and

outbound flows of finished goods to end customers, often neglecting the savings

potential from the MRO or indirect supply chain. With a lot of areas with high

priorities vying for attention, the MRO lifecycle has been languishing in the

background. But with the savings from direct materials supply chain squeezed till

the last drop, companies are starting to take a hard look at their MRO supply chain

and the associated processes and efficiencies as the economic conditions

continue to fluctuate and the challenges mount.

MRO assets form the crux of the indirect supply chain and play a vital role in the

production and maintenance lifecycles. Maintenance is one of the core functions

of every asset intensive industry and as assets become increasingly complex and

the dependency on them increases, it is important for organizations to have a

strong hold over their maintenance processes and run an efficient, continuous

manufacturing or service operation. It has largely evolved from being reactive

and corrective to planned and preventive. The storeroom for MRO operations

plays a crucial role; parts and materials must be available in the in the correct

quantities at all times and should be easily located to increase the efficiency of

the maintenance operations, costs have to be managed effectively, repairs and

preventive maintenance has to be performed at the right times, and unscheduled

and unforeseen equipment downtime should be kept to an absolute minimum. In

order to realize these goals, the MRO storeroom and the associated processes

need to have standard operating procedures in place that govern all aspects, right

from purchasing to the point of utilization.

With the advent of IT as a major stakeholder in the operations of organizations

and the increased reliance of the companies on their data assets, the success of

most maintenance processes predicate upon the IT infrastructure in place.

Maintenance management systems have thus formed an integral part of every

organization's maintenance scenario, aiming to help maintenance workers do

their jobs more effectively and enable the management to make informed

maintenance decisions. These systems were introduced initially as a means to

control and manage costs in a manufacturing machinery maintenance setting.

However, over the past several years, organizations from many industries have

Unpredictable and volatile economic conditions in recent times have pushed companies on back foot. Organizations are increasingly focussing on cost-saving and cost-cutting measures to maintain their revenues and safeguard their bottom-line. MRO assets form the crux of the indirect supply chain and play a vital role in the production and maintenance lifecycles. Maintenance

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realized that this software can be highly beneficial in every type of industrial

maintenance setting.

Maintenance management systems (Eg: CMMS/EAM) are designed to automate

standardized processes, collect historical information from every source of the

organization and provide the ability to navigate through and analyze huge

volumes of MRO data. The systems are utilized by many maintenance groups

within many facilities, especially the ones with different types of equipment

requiring maintenance. They maintain computer databases of information about

the organization's maintenance operations and produce status reports and

documents giving details or summaries of maintenance activities for effective

reporting. They also deliver maintenance intelligence capabilities for facility

managers, technicians and business management and provide historical, current

and predictive views of maintenance operations. This facilitates web-based

reporting, analysis and dashboards, graphical scenario-planning, maintenance

performance management, predictive analytics and mobile solutions for up-to-

date information on the status and progress of work. With focus on maintenance

process management, preventive maintenance, asset and inventory

management and safety, they make the job of facility management and the

teams a lot easier.

While conventional maintenance management systems have helped

organizations deal with their maintenance problems to a large extent, they still

are usually well below their ideal potential when it comes to delivering benefits

and realizing savings from their implementations. As with IT systems in many

cases, this inherent inefficiency points to one single root cause, the one asset

that maintenance systems depend upon – data. The bulk of the MRO data that

exists in the maintenance systems is largely unclassified, incorrect, inaccurate or

outdated. Having never before controlled nor managed their MRO item masters,

most companies' source data is—to put it bluntly—a mess. MRO data goes through

several stages after the point of creation, being used, managed, maintained and

modified by a wide range of sources across the organization. With no consistency

or established standards in the way the MRO data is created or maintained, the

problems with the quality of MRO master data usually start at the point of

creation and continue to persist in all the later stages.

The same MRO data that is stored in the maintenance system is accessed and

utilized by multiple facilities and divisions across the enterprise and is replicated

in their respective systems. The inefficiency that arises due to the bad MRO data

permeates through to all the dependant systems, affecting their performance

and diminishing the value that they deliver. The key areas that maintenance

systems focus on – preventive maintenance, asset and inventory management,

safety and compliance – take a hit leading to unwanted losses in the form of costly

equipment downtimes and lost revenue generation opportunities that create a

burden on the organization and the bottom-line. The MRO data inaccuracy also

While these systems have helped organizations deal with their maintenanceproblems to a large extent, they still are usually well below their ideal potentialwhen it comes to delivering benefits and realizing savings from their implementations. The bulk of the MRO data that exists in the maintenance systems is largely unclassified, incorrect, inaccurate or outdated.

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mitigates the ability of facility managers and management teams to make

informed decisions. For example, without accurate information on the MRO

materials, the facility manager will be unable to determine which machines

require maintenance and which storerooms contain the spare parts needed. The

management will be at cross roads trying to balance the scales between machine

breakdown repair and the preventive maintenance for all the machines. This

creates a lot of unwanted situations when it comes to the MRO lifecycle. Consider

a typical line-down scenario as follows.

The problems with a line-down scenario usually start with the lack of effective

preventive maintenance measures in place. Preventive maintenance is an

important aspect of a maintenance plan as they help minimize unscheduled

downtimes, costs and lost revenue generation opportunities. It is predetermined

work performed to a schedule to avoid a breakdown or sudden failure of

equipment components. It helps protect assets and prolong the life of critical

production equipment, improve system reliability, reduce the cost of

replacement and injury.

Maintenance systems consist of databases with information about the material

assets like incidence of preventive maintenance jobs, check-lists and the list of

materials required in addition to other pertinent material data like component

reliability information, equipment lifetime, inspection records, servicing records,

replacement frequency, inspected component failures and replacement

schedules. The system database helps a facility manager to have visibility into

the maintenance lifecycle and make informed decisions. But with no framework

for the creation of this material data, it is largely inconsistent and inaccurate.

This may give rise to an avalanche of a maintenance failure that affects many

stages of the lifecycle as below.

An error in or absence of the part replacement data leads to a machine or

equipment running on a material beyond its lifetime. The internal machine part

breaks unexpectedly. The machine goes down, bringing an entire production line

down with it. The shift foreman places a call to maintenance engineering and

everyone working on the line takes a forced break while engineering is en route to

diagnose the problem. The engineer diagnoses the problem quickly, but needs to

return to his own office in a different building to access reference documentation

from the OEM that built the machine.

Because of inaccurate MRO item description, MRO item search in the

maintenance system fails. From OEM documentation, the engineer identifies the

part he needs, then proceeds to hunt for it in the system, which takes longer than

Preventive maintenance fails

Part search fails

Preventive maintenance is an important aspect of a maintenance plan as they help minimize unscheduled downtimes, costs and lost revenue generation opportunities. It is predetermined work performed to a schedule to avoid a breakdown or sudden failure of equipment components

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it should because there is only high-level proprietary item classification

taxonomy in place, item descriptions are cryptic and lack vital attribute

information. The engineer finds an MRO item that looks like it might be the right

part but, due to incomplete information, he is unsure. He heads over to the

designated storeroom and requisitions the part. The storeroom operator locates

the part, scans it out of inventory and gives it to the engineer who takes it to the

machine.

Right part, wrong size. The engineer takes the part back to the storeroom where

it needs to be added back into inventory and replaced in its original location. He

attempts another search now, halfheartedly because he is pressed for time, does

not find the part in inventory even though it is available at a plant less than one

mile away. He puts a rush order into purchasing and calls the foreman to inform

him the line will be down overnight. The shift foreman sends idle production

workers home.

The buyer/planner in the material procurement team receives a rush order. She

repeats the engineer's search in her system which in turn accesses the system

database to make certain the part is not in inventory. Encountering the same

search difficulties as the engineer, she finds what might be the right part and calls

down to the storeroom, causing another physical search. She then calls over to

the engineer who goes back out to check the second part. Still the wrong part.

The engineer — now hopping mad — demands that the buyer get an order out

immediately.

Because there is now an extreme rush on the order and the buyer wants to be

sure the correct part gets delivered, she goes directly to the OEM who built the

machine to purchase. She does not look for a lower cost alternative, does not

check to see if the part is available through a preferred distributor, and does not

competitively source the part. Of note is that the OEM does not make the

component part, but sources and sells it at a high mark up through its

aftermarket business. Because the OEM is not a strategic or preferred supplier

and the order is a rush, there is no question of negotiating price or obtaining a

discount.

Since the OEM is not an approved supplier, the buyer cannot use her company's

preferred transaction automation solution and must manually execute the

transaction, meaning spend data ends up in an unexpected place for the type of

item being purchased. The buyer must also set up a new supplier master record to

enable the transaction. She is in a hurry, so fills in only the minimum of

information required to get the order out. Later, accounts payable will have

Procurement/spend management fails

Transaction processing fails

Because there is now an extreme rush on the order and the buyer does not look for a lower cost alternative, does not check to see if the part is available through a preferred distributor, and does not competitively source the part.

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trouble paying the invoice and will have to backfill important missing information,

making the payment late, missing a potential early-payment discount and

incurring interest charges.

The OEM has the part in inventory, but not locally, so the buyer must also call a

freight expediter and pay premium rates to obtain the part in the shortest

possible time frame. The buyer lets the engineer know the part will arrive in 48

hours. Now sales must get into the act, adjusting delivery dates for orders that

were supposed to be rolling off the downed production line. Likewise, the

production foreman and human resources need to arrange temporary furloughs

for the workers who won't be needed until the machine can be repaired.

Meanwhile, the engineer calls the buyer to let her know there are six similar

machines operating in different plants and asks her to order extra parts to have

on hand for the future. For convenience, the buyer changes the existing order,

incurring even greater procurement and freight costs plus costs to receive, move,

and process unneeded replacement parts into inventory.

Excess parts go into inventory where they may or may not be needed in the

future. What is more, because the process of creating the new item master was

handled under rush conditions and not done thoroughly, the potential now exists

for the new part information to be inaccurate again in the maintenance system

database and the MRO items to be missed in inventory four years down the line

when a different—but similar—machine goes down in a different plant and is being

repaired by a different maintenance engineer.

The scenario above shows the scale and level of unwanted costs and losses

created by bad MRO data in the maintenance systems which spread across all the

stages of the production lifecycle and moreover, leave ample scope for similar

failures in the future. It focuses on operational risk, cost-increasing and time-

wasting behaviors that can result from a failure to manage repair-related MRO

item in maintenance systems.

Accurate enterprise-level views into MRO inventory and actual consumption are

the only ways to pinpoint either excessive consumption or the likelihood of

undocumented inventory. Clean, enriched, de-duplicated MRO item data that is

accurately and granularly classified to standard taxonomies forms the

foundation required for being able to see and benchmark MRO consumption

patterns in ways that enable true demand management to begin. These

challenges and needs have made organizations today to look for a solution to

overcome them, bringing Master Data Management to the picture.

Inventory fails

Accurate enterprise-level views into MRO inventory and actual consumption arethe only ways to pinpoint either excessive consumption or the likelihood ofundocumented inventory.

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Master Data Management: Delivering value added MRO master

data

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MRO master data is one of the most crucial elements in the MRO supply chain and

and for the systems that manage it and needs to be managed effectively. Master

Data Management is a comprehensive strategy to determine and build a single,

accurate and authoritative source of a company's information assets and deliver

this on demand as a service. According to the industrial best practices, an

effective Master Data Management initiative comprises two key parts – Historical

data cleansing and On-going Data Maintenance (ODM).

Historical data cleansing involves classification and business-value enrichment

of the existing MRO legacy data across the maintenance systems and other

systems, applications like ERP, SCM, etc. and organizational units of an

enterprise. It ensures enterprise wide visibility of the MRO material base leading

to efficient MRO asset management, inventory optimization and rationalization.

On-going data maintenance on the other hand, involves maintaining quality of

MRO data on an ongoing basis and creating a framework for the creation, use,

access and maintenance of data across the organization, leading to enhanced

operational efficiencies and improved sourcing strategies.

A successful Master Data Management initiative delivers many benefits to

the MRO supply chain and the maintenance systems as below.

Improved performance of maintenance systems and increase in value

delivered

MRO supply chain optimization and Greater process compliance

Efficient sourcing strategies and Significant spend reduction

Enterprise Visibility enhancement and Efficient Enterprise Risk Mitigation

Inventory optimization and effective Materials Handling

Streamlined operations, Increased productivity and profitability

Informed maintenance decision making through better maintenance

intelligence sharing with historical, current and predictive views of

maintenance operations

An effective Master Data Management initiative that delivers accurate MRO data

and keeps it clean on an on-going basis adds immense value to the MRO and

strategic sourcing initiatives of an organization. It drives significant bottom-line

savings, achieves enhanced business and operational efficiencies, unlocks the

ROI and performance of maintenance systems, minimizes to a great extent costly

downtimes and losses, and more importantly, helps the management make

informed and sound decisions on maintenance based on sound MRO data in the

databases leading to enhanced Maintenance performance.

An effective Master Data Management initiative that delivers accurate MRO dataand keeps it clean on an on-going basis adds immense value to the MRO andstrategic sourcing initiatives of an organization.

About Verdantis

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Verdantis, Inc. is an independent company focused entirely on master data quality, master data management and master data governance solutions for G1000 organizations.

Verdantis is the first to offer Master Data Management services and solutions that bring real ROI and Business Value by focusing on the business use and application of organizational Master data. Verdantis uniquely offers end-to-end automated ERP MDM solutions driven by our suite of Artificial Intelligence (AI) based solutions and business roles and rules, easily configured to fit enterprise requirements for classification, enrichment, screens, fields, security, attachments, workflow approvals, languages and more.

Verdantis Harmony services prepare legacy data to become master data in its true sense assuring a de-duplicated, consolidated, classified, validated and standardized data set in the output formats needed for uploading into client's ERP and EAM systems and Verdantis Integrity On-going MDM suite. Verdantis Integrity a bolt-on ERP suite of easy-to-use On-going Master Data Governance repositories and processing solutions for on-boarding new enterprise asset master information and maintaining current data for Items, Suppliers, Customers, Products and Financial information. Leading global companies have chosen Verdantis solutions for the following reasons:

End-to-end automated processes to harmonize & enrich historical

master data

Ability to ensure both semantic and structural ongoing data integrity and

quality

In-depth industry and data specific domain expertise with a robust

project methodology

Ability to handle huge volumes of cryptic and complex data in multiple

languages

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