Market Pain
 |
| Next Step |
| Use this form to request an IHS Intermat Solutions representative contact you. |
|
|
Intermat Solutions has found that the MRO parts information of many asset-intensive organizations is comprised of unstructured "free-form" text, entered in a variety of ways, resulting in parts descriptions that are incomplete, inconsistent and non-comparable. This "Toxic" data (poor MRO parts descriptions) is the root cause of a variety of customer pains and business issues, including duplicate and obsolete parts and increased part order fulfillment times. These are issues that ultimately effect the bottom line - through increased inventory and procurement costs as well as decreased plant and equipment availability. These are costs that compound over time - costs of which some businesses can never fully recover.
| Root Cause |
Bottom-line Effect |
 |
- Duplicate and obsolete parts
- Increased order fulfillment times
|
 |
- Increased inventory costs
- Increased procurement costs
|
 |
|
 |
- Decreased equipment availability
|
 |
- Excess records
- Lack of effective search functionality
|
 |
- Decreased worker productivity
|
Increased Inventory Costs
Poor communication between buyers and suppliers and a lack of adequate product information often produces "guesswork" purchase orders, resulting in duplicate inventory, false stock-outs and obsolete inventory. Increased inventory cost is the single largest bottom-line effect of unstructured and inaccurate MRO catalog descriptions.
Increased Procurement Costs
Paper-based systems still dominate many MRO purchasing processes. Typically, MRO materials and equipment are infrequently replaced items purchased on a decentralized basis from a broad range of vendors, resulting in increased order fulfillment times and higher transaction processing costs, as well as time-consuming administrative support.
Inadequate part descriptions are a source of frustration for those employees who cannot find the right parts and supplies to allow them to do business. This situation leads to maverick purchasing - when an organization has negotiated strategic contracts with suppliers but employees buy outside these contracts, typically at higher prices. Such off-contract spending reduces an organization's ability to efficiently monitor its expenditures and raises its costs.
Decreased Plant and Equipment Availability
Poorly-described MRO catalog items often lead to incorrect and untimely part orders. Inefficient buying of critical supplies increases the cost of maintaining equipment and frequently results in decreased plant and equipment availability.
Decreased Worker Productivity
Duplicate and obsolete inventory leads to excess parts records. This compounds the problem of most materials management software tools which are buoyed by a lack of effective search functionality. According to an Aberdeen Group survey of leading manufacturing firms, maintenance workers spend as much as 60% of their time identifying and searching for MRO parts, indicating that most organizations could benefit from improvements in their loss of "wrench time."
In addition, MRO items are historically a low priority area for many organizations. Since MRO procurement is usually considered a low value activity, purchasing is often delegated to low-level employees who often lack the product expertise or time to manage the process effectively. The additional time, resources and expertise needed to find the necessary parts to run an organization's plant and equipment leads directly to decreased worker productivity.