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7 Epic Fails in MRO: Fix poor data management permeating an ERP ecosystem

Tuesday, 20 September 2011 Written by  Nupur Agrawal
Most businesses typically put their energy, resources and investment into things like product design, sales and marketing, production efficiency, process control, IT and supply-chain management. With so many important priorities vying for attention, managing a company’s MRO supply chain has typically been neglected. Capital equipment downtime costs huge dollar losses per day, especially in asset-intensive industries like mining and oil & gas companies. One of the challenges this sector faces is the complexity and diverse configurations of the equipment. Often, the technical information needed to complete a repair of equipment (especially unscheduled services) is spread across multiple manuals and databases, resulting in longer downtimes, which impacts maintenance efficiency and in turn profits. Maintenance management details procedures that define manpower scheduling, equipment and tool control, quality control, reporting, cost control, inventory control, training, loss prevention and inspection/work status. The maintenance team holds the key to maximizing assets, minimizing downtime and controlling costs. CMMS software provides the foundation to deliver efficient, effective maintenance regardless of the size and complexity of a maintenance team. Sometimes knowing what not to do is helpful, so the following are seven don’t-dos in MRO master data management (MDM). 1. Free-for-all MRO text descriptions: Unleashing peoples’ inner Shakespeare by letting each one choose their own words and styles to describe MRO items results in item descriptions that are cryptic, differently abbreviated and often unintelligible to anyone other than the person who created them (and even to them if enough time passes). For example, is a ball bearing a “ball bearing,” a “brg,” a “ball brg,” a “bb,” a “b bear,” etc. 2. Taxonomy-free MRO: Having no discernible taxonomy forces search and analysis activities into labour intensity and failure. Simple, high-level taxonomies may help somewhat with search but leave detailed drill-down-type analyses virtually impossible to accomplish without ad hoc manual or external classification exercises. Solution for 1 & 2: Deploy an MDM solution layer for MRO that automatically generates standardized short and long item descriptions from key item attribute fields. UNSPSC taxonomy has become the standard for classifying spending data and B2B e-commerce transactions; adopting the same standard for MRO item master classification enables transaction, inventory and consumption data to be viewed through a single, powerful lens. 3. No ownership: Giving people direct access to create item and supplier masters in ERP without a master data management solution layer primed for data validation is just asking for incomplete, inconsistent and inaccurate data. 4. No workflow for MRO: Workflow makes certain the right people pay attention and participate in the process. Most importantly, though, workflow makes it as easy as possible for a person to comply with policy. Solution for 3 & 4: Establish clear owners of MRO item master data. There is no getting around the fact that enterprises need people with responsibility for item master stewardship and policies to support them. Niche MDM solutions for MRO enable just a few data stewards to manage and enforce policies easily even in large, complex organizations. 5. Improper cash management: Cash tied up in inventory or spent on non- or negative-value-adding work is not earning returns, hampering investment in innovation, capital expansion, future business and growth. It also forces enterprises to finance more working capital for longer periods than necessary. Solution for 5: Create clean, enterprise-level views of MRO stockpiles for better visibility and inventory optimization, thus ensuring better cash management and liquidity scenario. 6. Unknown PM parameters: While preventative maintenance is typically triggered by testing, visual inspection, electronic sensors or OEM recommendations for scheduling, dirty MRO master data makes such a scenario impossible to contemplate. 7. Tying poor MDM to performance: Systematic problems like poor MRO master data management can affect many people’s job-performance metrics negatively — in ways that are not under their direct control. This corrupts the company’s performance management system, leading to great personal frustration and low morale. Solution for 6 & 7: Insight into real parts consumption as it relates to particular machines might go a long way to making preventative maintenance more science than art. This would also go a long way in reducing breakdowns. These failures provide a picture of the vast duplication, misclassification, inconsistency and inaccuracy that permeates typical industrial enterprises’ ERP ecosystems related to MRO. Nupur Agrawal is the analyst and public relations lead with Zynapse. For more information, visit www.zynapse.com.

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