MDM initiatives often ride on a wave of larger IT initiatives like ERP consolidations
Most large enterprises understand that effective Master Data Management practices unlock considerable value. However, executive buy-in for information governance projects like MDM often rides on a wave of larger IT initiatives like an ERP consolidation. “Consolidation presented a unique and interesting opportunity to get management buy-in for setting in superior master data management practice” agreed Andy, SAP Warehouse Analyst for a Fortune 500 Wood Products company which leveraged Verdantis to set harmonize over 300,000 SKUs of material data while undergoing an ERP consolidation across 25 manufacturing facilities.
With revenue of more than $7 Billion and a global workforce of 13000 employees and counting, the customer was involved in 4 major lines of businesses, including wood products. However, the housing market, which was a key revenue driver of the Wood Products business, was witnessing constant downfall, bringing pressure on the bottom line. The director of procurement had identified a sore spot- disparate plant performance. Of the 35 plants manufacturing Wood Products, 10 of them were performing really well as they were running on a common ERP by SAP. However, the remaining 25 plants were running individual ERP instances of Maximo with individual catalogues for each plant site. This reduced cross-plant visibility of parts and was causing their spend management suite to under-perform causing maverick spend.
Successful completion saw the business witness a staggering increase in value and overall profit margins due to:
• De-duplication of inventory across warehouses for strategic inventory management
• Spend analysis by leveraging UNSPSC classification
• Improved visibility in contract compliance and pricing compliance
• Reliability of data for extending materials across plants
The Director of Procurement congratulated the project team saying, “The business case developed by our company with assistance from Verdantis estimated a $12 million annual reduction in spare parts costs from a common catalog – and progress is on track. Part searches are now easier than ever, and this has resulted in increased productivity of the 25 plants.”
Other examples of how enterprises can monetize superior Product/Material Master Data management practices have been discussed by Arthur Raguette.
Have you been a part of an MDM initiative riding on an ERP consolidation initiative? Do you think that De-coupled MDM initiatives have wider scopes? Leave your comments below.
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