Data management is such an important topic, but many companies are still struggling with many common issues. Resolving these issues is becoming pertinent to become more data-driven. In this article, it is time to dive into today’s business challenges, and the top seven issues to avoid.
Many businesses face the challenge of classification especially if they have not adopted one. They are only able to see the part number and description. The description has very little information, which can be challenging for inventory to reuse on an existing item. For instance, say there are fourteen thousand tubes in inventory. However, due to the confusion of not being able to find the exact part, it will need to be created as a “new” one. In turn, it would take too long to review each one to see which one meets the requirements.
What we recommend is to implement classified data. This will help someone find categories and can designate specific attribute filters. Classified data helps both engineering and procurement to classify and organize their data by specific categories. Specific attribute data is important since it allows for technical, numeric, meta, and string data to be seen. It is a helpful tool for both procurement and engineering to do their job in the most effective manner.
As a result, here are the “Top 7 Issues” that are driving these business challenges:
Procurement lacks information to source new parts
Engineers engage suppliers that are not approved
Procurement either has too many suppliers or is sole-sourced
Pricing on similar parts varies widely
Procurement lacks data to challenge higher supplier pricing
Different regions purchase from local suppliers
Unable to cluster similar parts for market basket sourcing savings
Another recommendation we have is to do a cluster analysis. Cluster analysis allows for similar parts that are grouped by key attributes. This will also showcase pricing and spend rationalization. Showcasing pricing will allow an engineer to see where cost-saving measures could be implemented.
For more detail on these “Top 7 Issues,” we highly recommend watching our most popular webinar based upon this blog. Please click on the link to check it out.