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Every January brings New Year's Resolutions–from getting to the gym more often to trying out new hobbies. But why stop at the personal? This year, isn’t it time to set a goal for your company?
Material Master (MRO) data cleansing and governance projects can be an incredible investment that transforms your item master from an unreliable mess to an actionable tool you can use to make better business decisions and ultimately save money. Often, executives balk at the price or the timeline of the project involved–in part because they don’t understand the benefits, but also because the information and unknowns seem overwhelming.
Let’s take this opportunity to outline what you need to know to set your data project goal and make it happen this year.
Why does it matter?
Picture a data set that’s full of duplicates and is missing information. A maintenance issue comes up and when you search for the part, it appears that you don’t have it. Instead you have to rush order it–costing thousands of dollars in both downtime and extra purchasing fees. In actuality, you do have the item, but it wasn’t entered properly and so searching the system doesn’t turn anything up. The more this happens, the less your team feels they can rely on any data you do have and instead they may take actions such as overstocking or hoarding items.
Now take that same data set after a thorough process to: get all the items into one system, standardize them using the same formats and taxonomies, and deduplicate them. When an issue comes up and you have to search for a part, you know the results you have are reliable and can find the existing part you need. You can also use the information at your fingertips to leverage spend when purchasing and to right-size your inventory so you’re not keeping excess items that clutter up your storeroom or go to waste.
Having an actionable Material Master data set makes a huge difference to your team’s day-to-day responsibilities, from maintenance to procurement.
What is a data cleansing project?
Material Master data cleansing is the process of taking your existing data and standardizing it to make it reliable and usable. As we discussed above, standardized MRO data can be a huge asset to your organization. But what is actually involved?
Data cleansing is a multi-step process that starts with a data evaluation from the provider (such as IMA’s free evaluation!) to identify the state of your Material Master data and come up with an action plan.
After you have figured out the details of the project, you’ll go through the following process:
Establish a Standard Operating Procedure (SOP). A defined SOP gives clear guidance so all your data will be cleansed the same way.
Collect Your Data. If your data is in an electronic format already, you’ll just need to follow any instructions to send it for processing. If you have inventory that is unaccounted for, you’ll want to set up an on-site data collection initiative to have it all captured.
Pre-Cleanse. Next, your raw data is run through pre-cleanse software to review and standardize manufacturer name and part number.
Assign Noun-Modifier Pairings. Using the agreed upon convention, your data begins to be enhanced with Noun-Modifier pairings.
Standardize. Existing part descriptions are validated and standardized using the determined SOP.
Enhance. Now data can be enhanced by populating and updating attributes.
Classification Codes. Items have valid product classification codes (material group) assigned.
Duplicates and Review Items. Throughout the process, duplicates and review items are identified so they can be handled as needed with additional steps like on-site item identification.
Quality Control. When everything has gone through the data cleansing process, a quality control review is completed to verify the standards of all cleansed data.
Customer Review. After the data has passed quality control, the customer can verify that it meets expectations.
Data Formatting. With the data approved and complete, it can be formatted to match your system’s needs.
Data Return. The data comes back in its final, cleansed form to be uploaded into your data management system, such as an ERP.
With your data returned, you can start reaping the benefits.
What are the benefits of data cleansing?
When we talk about benefits, we tend to talk about your return on investment (ROI). This identifies ways you can improve your bottom line by taking action on the information a data cleanse provides you with.
The ROI opportunities that you can expect include:
Reduce duplicates in your inventory. On average, 10% of your uncleansed material master is duplicated. Of that, 25% of duplicates are generally available for inventory reduction.
Increase spend leverage. Typically, 60% of annual purchases qualify for leverage opportunities.
Purchase price reduction. On average, companies see a 5% purchase price reduction through spend leverage and vendor consolidation.
Fewer maintenance hours. Companies tend to see at least 0.5 hour saved per day per maintenance team member due to efficient search ability.
OEM conversion opportunities. Typically, 30% of a material master is represented by OEM items. Of that total, 10% of OEM items qualify for conversion to standard MRO items.
Item price reduction. When you complete OEM conversation, on average you’ll see a 25% average purchase price reduction.
Reduce stock quantity. Once you have actionable, accurate data, 10% of on-hand inventory exceeds the max stock quantity. You’ll be able to reduce your stored inventory.
You can see your ROI broken down more specifically by using our free ROI calculator here.
Where does governance come in?
Even if your data has been cleansed, your data journey is not complete. After all, you can’t lock everything down and stop adding, using, or replacing items. What you can do is put a plan in place to make sure all data changes that occur meet the same standards you’ve established.
Governance is that process.
What governance looks like for your organization may vary; it can involve self-managing your data using a tool that guides you through entering and managing your data properly or relying on third-party support to standardize your entries for that additional peace of mind. IMA’s tool, uManage Pro, offers flexible options to allow your organization to get exactly the level of support you need–whether that’s IMA’s governance specialists standardizing every entry, a few when they come up, or none at all.
What does the timeline look like?
How long a data project takes depends entirely on your unique situation. For example:
What state is your data in now? Cleansing may take more time if there’s more that needs to be done to each item or if your inventory first needs to be captured on site.
How many SKUs are there to clean? The more there is, the longer cleansing can take.
Who needs to be involved/sign off on the project? Gathering everyone up front can save time (and the need for changes) later.
When are you ready to start? Several steps are dependent on the client’s team being able to provide data or review. Not being ready on your side can slow down the process.
In general, IMA finds that the actual cleansing takes a few weeks. A detailed estimate with timelines is available as part of a project proposal.
Why use a third-party?
Often, companies wonder why they should bother paying someone else to do a project that their own employees could do instead. What it boils down to is that third-party data management providers have the dedicated time, expertise, and resources that your internal employees don’t.
Think of it like building a house. You could probably learn what you need to do and slowly put it together, but it would take a much longer time and you wouldn’t build it up to the standards that a professional could. If you want to have a reliable shelter on a much faster timeline, it’s worth the investment in a third-party.
Data cleansing and governance companies have specific experience and tools that make them much more capable of handling a data project efficiently and effectively. A company like IMA can devote time and resources to the project, including our one-of-a-kind software, uManage Pro. We also offer invaluable guidance and advice that comes from having worked with hundreds of clients in the industry.
Ultimately, finding the right third-party data management provider can save you time and money by getting you to a point where you see a return on your investment much faster.
For more information, check out our previous blog on the topic!
Why start now?
The best time to start a new data project is always now. The sooner you start, the sooner you’ll be able to take advantage of your clean data for business decisions and day-to-day work.
If you start now and dedicate the resources needed, you can have world class data before this time next year!
How can IMA help?
IMA is a trusted data cleansing and governance service provider with decades of experience in the industry. Our number one priority is quality data, so we combine powerful technology with dedicated time from our expert data specialists. Because every company is different, we offer unmatched levels of customization to help meet your unique needs. No matter where you’re starting and what your end goal is, IMA can help!
Best of all, IMA offers a free, no obligation data evaluation to help you jump start your project. You can also check out our free ROI calculator.
We strongly recommend you take advantage of our free tools to start identifying what you need from your project and what benefits you could see. For more information, you can also contact us at info@imaltd.com.
We hope to help you take your data to the next level this year!
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