Webinar : Fuel the Enterprise with Clean Master Data - Consolidated Product Spare Parts Master

Data strategy and systems delivery
backed by deep domain expertise
Today’s Technology and Services to
drive material data performance.
Welcome to our May Webinar
A Material (Product Spares and Item) Catalog is a Gateway
to Operational Excellence and Strategic Procurement
Fuel the Enterprise with Clean Master Data – Consolidated Product Spare Parts Master
© 2014 Verdantis Inc. All Rights Reserved.

Agenda
• Defining the value & components of a clean consolidated Material Catalog
Jay Fielding: Regional Sales Manager
• Operational value from a clean consolidated Material Catalog
Kurt Nyffeler, Managing Director, Business Intelligence
• Strategic sourcing value from a clean consolidated Material Catalog
Arthur Raguette, Executive Vice President Verdantis, Inc.
• Verdantis Automated Approach to Data Quality and Governance
Next Steps: Verdantis Evaluation Options: POC
Jay Fielding, Regional Sales Manager Verdantis
“A Material (Product Spares and Item) Catalog is a Gateway to
Operational Excellence and Strategic Procurement”

Material Master Data – Improve Performance
Common Drivers for Consolidated Catalog:
Data quality for new ERP/EAM, acquisitions, equipment and locations
Improving inventory levels and visibility across global locations
Global management of enterprise businesses
Improving global sourcing through more effective intelligence and data
Verdantis MDM solutions are designed around these three criteria.
1. Reduce Costs and Drive Business Value:
Ensuring the business has the right processes and data to realize improved
value in their operations.
2. Master Data Compliance and Standards:
To assure enterprise compliance and a single view of the company’s Master
Data. To most effectively utilize resources for data quality, maintenance and
approval processes
3. IT Standards and Compliance:
Furthermore, to assure that the MDM solution cooperates with IT standards
and solutions for enterprise architecture, security and applications.

Dirty Item Master Data
Material Group Code Input Data
3MM 050
3MP 100
3PM 110
3PN 133
3019
BEARING,BALL,50MM ID X 96.5MM OD , 5212 FAF
BALL BEARING SKF, 6316RS
BEARING BALL, 65MM ID X 140MM OD X 33MM
BEARING, BALL, AR23144CKYW,SKF
BEARING,BALL,, 30MM ID
What is dirty data?
• Poor unstructured descriptions with limited attribution
• Inaccurate or non-existent Spend classification or noun modifiers
• Inconsistent abbreviations and UoM
• Lack of manufacturing name and part number
• Duplicates

Common Material Projects – Historic Core Components
• Standards
 Data
 Data Ownership
 Data
Stewardship/Governance
• Process, Automation or
Methodology and Resources
for Project
• Non-source enrichment
• Approval Processes
• MDM/ERP repository
Data Standards:
• Classification, Taxonomy, Noun Modifier
• Specifications/Data Template
 Type, RPM, Hertz, Frame, Voltage
 Additional information like
application and nick names.
• Critical and Non Critical Attributes
• Abbreviation Dictionary
• UOM Dictionary
• Short and Long Material Description
• Material Group, Mfr. Name & Part Nbr.
• Local and Department Views

Central Consolidated Item Catalog
• A single Master Item ID with extension
to multiple sites/plants and optional links to
multiple preferred suppliers
• Items set up to standards reflected in
short and long descriptions.
• Local plant and department views
centrally maintained.
• Relevant Items kept in multiple
languages as required.
• Synchronization to single or multiple
ERP/EAM/MDM systems
• A governance process and plans to keep to
standards as new Items are added.
Central
Item Master
Repository
with MDM
Automation
New Part
Requesters at
Edge of Org.
Enterprise
Touch Points
Manufacturing,
Accounting,
Maintenance,
Services,
Compliance,
Procurement,
Engineering,
Suppliers
System Synch
ERPs
EAMs
eProcurement
Data
Quality
Solution
s

Material Master Data –Drive Performance
Verdantis Short Description Verdantis Long Description
“A Material (Product Spares and Item) Catalog is a Gateway to
Operational Excellence and Strategic Procurement”
More efficient search Cross plant / business unit visibility
Create new parts without duplicates Reduce inventory costs
Reduce engineering costs Enhanced spend management

Tag
Introducing Kurt Nyffeler, Managing Director, BI
Newbold Advisors
Project Management
Data & Industry Domain Expertise
MDM and Catalog Consulting
Business Case Development
Professional Services
Systems Integration BI Reporting and
Analysis
Newbold Advisors and Verdantis Automated Material Data Management Solutions

Newbold Advisors
• Oil & Gas portion of the practice staffed with industry experienced data
management consultants
• We have worked with 10 Fortune 100 and 20+ Fortune 500 companies
• Newbold Advisors offers an extensive array of Data Services ranging
from strategic thought leadership to bulk data cleansing
 Founded in 2006 to provide consulting services to the financial sectors of
banking and mortgage - now over 450 strong
 Kurt Nyffeler, Managing Director, began Data
Management Practice in 2012
 Nearly 30 years in BI, 15 years in Master Data Management
and ran the Global BI Practice with over 1000 consultants for
a major global consulting firm

Newbold Data Management Offerings
• Consulting Engagements:
– Master Data and Business Intelligence Roadmaps
• Planning including Definition, Strategy and Cost/Benefit-justified Business Cases
– Design, Develop and Support of BI/DW, MDM and BPM
• Frameworks, Governance and Stewardship
• Data Cleansing & Attribution Out/In-Sourcing
– Rapid Assessment of Data Readiness (RADaR)
• Critical data health analysis preceding Projects, Mergers and Acquisitions activities
• Highly Experienced Consultants:
– Business Intelligence (BI)
– Data Warehousing (DW)
– Data Integration & Extract Transfer Load (ETL)
– Master Data Management (MDM)
– Data Quality Management (DQM)
– Business Process Management (BPM)

Newbold Consultant Data Management
Experience
Customer Timeframe Domains Roles Approach Technology Related BI Work
Large OFS 2000-2002 • Product • Roadmap
• Implementation
Registry • SAP/BOBJ
• Oracle
• Microsoft
Foundation for initial
E-ODS
Independent Oil
Company
2003 • Business
Associate
• Roadmap
• Implementation
Registry • SAP
• Fuego (Oracle BPM)
• Microsoft
-
Large E&P 2004 • Well • Business Case
• Roadmap
• Implementation
Analytics • SAP
• Oracle
• Business Objects
Production vs. Decline
dashboard
Large OFS Division 2008-2010 • Customer
• Supplier
• Product
• Roadmap
• Implementation
Registry • Oracle
• Informatica
• Microsoft
Data mart
Large EPC 2009 • All • Roadmap Hub • Oracle
• Microsoft
Roadmap
Large OFS 2010 • Customer
• Supplier
• Product
• Roadmap Custom Hub • SAP
• Business Objects
-
Large Manufacturer 2011 • Product • Roadmap
• Implementation
Registry • Oracle
• Microsoft
Full BI/DW
implementation
Large OFS 2009-2014 • Rig
• Facility
• Supplier
• Product
• Business Case
• Roadmap
• Implementation
Custom Hub
(Hub)
• SAP
• Oracle
• Microsoft
• DataFlux
BI Roadmap
EIM Architecture
Large OFS Division 2013-2014 • Product • Data Cleansing &
Enhancement
Registry • Oracle
• Dassault
-

The Cycle of Competitive Advantage
Requires Good Information
Plan
Act
Measure
Analyze Business
Processes
 Today’s Companies must…
 Be “Agile”; quickly respond to market changes and
opportunities
 Manage more by fact to support existing intuition
 Have high awareness of behavior, feedback and
needs
 Achieve product, service and supply chain
excellence
 Be open; allowing unfettered access to information
 The “Cycle of Competitive Advantage” must operate rapidly and regularly
 Process information is the key to enabling Measure, Analyze and Plan
 This is the role of Business Intelligence and Corporate Performance Management
 However, GIGO applies: “Your Insight Quality <= Your Information Quality”

Pyramid to Wisdom
Wisdom
KPIs
Data Science
Transactional Context
Systems
Processes
Business
Intelligence
Master Data
Management
Business Process
Management

O&G Information Value Extraction
Progress

Product MDM Business Case
Category Examples
Operational
Benefit
Analytics
Benefit
Compliance • Ease compliance coding and reporting
• Purchase contract compliance
• SOX Accountability
 
Cycle Times • Reduce lead, sourcing and procure-to-pay times, incorrect shipments
• Shorten make-versus-buy and speed-to-market
• Reduce engineering and ECO cycle time
 
Error Reductions • Inaccurate product updates and price-related errors
• Less warehousing and logistics issues, error corrections
• Fewer write-offs from product returns and invoice errors
 
Inventory • Inventory optimization; reduce inventory levels, turn and visibility
• Reduce out-of-stock conditions and write-offs
• Reduce manufacturing disruptions, increased uptime
 
Performance Analysis • Supplier performance analysis
• Part quality performance
• Product profitability
 
Sales Benefits • Reduced out-of-stock and equipment down time
• Better searches for salespeople and Customers; loyalty
• Improves ability to cross- and up-sell; “value pricing”
 
Support Costs • Reduce data maintenance efforts
• Lower analysis and reporting production effort
• Reduce data and application integration efforts
 
Technology • Reduce M&A system/data integration time and risk
• Minimize "breakages" when systems change
• Compatibility with GDSN standards
 
Business System Upgrades
• Establish specific deadlines
• Optimal time to address/fix
redundancies
• Vastly reduces go-live risk
• Optimizes value of new system
• Maintains “buzz” for OCM

Common Misconceptions
The Thought The Reality
It’s too expensive The ROI is HUGE, plus your competitors are moving, so you can’t
afford not to get started
It’s simple and we are smart, so… You are smart, but this is a large minefield; get help or lose a leg
Our ERP SI will take care of this Would you have a data management consultancy implement your
ERP??
This is an IT project This is an iterative business/IT journey, lots of integration
There are only a few systems Parts are a huge part of your business, so the data is everywhere
We’ll build the classifications ourselves You can’t quickly define and agree on 1,000’s of classifications
We’ll clean the data ourselves 60 parts/man-day = 16k days for 1 mil items
Data cleansing won’t take very long See above!
Only technical attributes are important The commercial attributes are half the number and in more systems
A Product Hub isn’t needed Maybe, but what system will effectively handle both tech/comm’l
attributes and integrate?
We can use a multi-domain MDM tool These can’t handle 1,000 of specifications

Takeaways
• You won’t realize the full value of your business systems or
reach full potential of your analytics without MDM
• The ROI of MDM projects is huge
– Status quo is the highest cost for your current problems
– Start with a business case, then iterate/integrate
• Your competitors are moving forward, so stay competitive
• A major system implementation is an excellent catalyst
• Specifications and cleansing take a long time, so start early
• Leverage everything you can; use services and standards
• Have an experienced third party help you learn how to fish
• Don’t be afraid of new/additional technologies

Business Impacts of Poor Material / Part Master Data
Balance Sheet and Income Statement Impact
Research Analyst View – Productivity
• Productivity Impact
• New Product Development Impact
• Customer Satisfaction (Revenue) Impact
• Case Study
• Asset Optimization
• Procurement Optimization
Product or Service Flow – Outage Impact
• True Costs of Down Time
• Monetary Impact of Down Time

MDM Impact on Production Oriented Processes

MDM Impact on ERP ROI

Balance Sheet and P&L Impacts of the
Material Master
Verdantis Harmonize® & Integrity®
• Harmonization Results
• SKU Count
• Post Cleansing and Enrichment - 340,000 Unique Items
• Raw Count Improvement
• 15% reduction in total SKUs
• 10% identification of duplicate inventory assets
Process Manufacturer or Services Provider
• 8 Billion Annual Revenue
• 1 Billion Annual MRO Spend
• 400 Million Inventory Value
• MRO Material Master Count
• Post Initial Merge of Systems 400,000 Items

• Annual Inventory Carry cost reductions of 4.4% (Factored cost of
capital) as write-down (positive impact to balance sheet)
• 400 Million in Inventory
• 10% Duplicate Identification
• 40 Million in Duplicate Inventory value
• Write Down of Factored Costs at 4.4% of 40 Million = $1,760,000
• Cost Reduction on aggregation of demand across 15% of $1BN in MRO
• 1 Billion in Maintenance, Repair and Operations Material
• 15% Identified through Harmonization as Similar (Across 10% Supplier Base)
• 150 Million addressable spend
• 12.5% reduction in costs through strategic sourcing
• Cost Reduction of 12.5% of $150 Million = $18,000,000
– Annualized Net Cost Reductions of $19,760,000
Material MDM – Hard Dollar Benefits of
Harmonize®

• Verdantis Integrity for Reduction of Maverick Spend
• 80% of the 1B Maintenance, Repair and Operation Spending is covered by
preferred / pre-negotiated contracts - $800 Million in Spend
• Data Governance improves Catalogue Quality –Reduced Maverick Spend
from 40% to 25%
• 15% gain in compliance = an additional 120 Million in contracted spending
• Average of 16.5% Cost Reduction for pre-negotiated categories
• Cost Reduction of 16.5% of 15% of $800 Million = $19,800,000
Combined Annualized Net Cost Reductions of $39,560,000
Material MDM – Hard Dollar Benefits of
Integrity®

Impact Value of Data Quality

• Verdantis brings over 12 years of Material and
Supplier Master expertise and projects with
Global clients to the market with unmatched
technology and attention to ROI.
• Experts in Spend Classification and Attribution.
• SaaS deployed solutions to more cost-effectively
and timely compliment major ERP/EAM and
Legacy systems.
• The most comprehensive suite for collaborative
and automated high speed batch material data
cleansing solutions under Harmonize brand.
• Options for On-going new Item create and
governance with embedded classification and
attribution models under Integrity brand.
• Integrity leverages classification model,
values, spec sheets, abbreviations, UOM
and more from Harmonize
Verdantis, material master data cleansing and governance
Artificial Intelligence: Suite
• AutoClass, AutoSpec, AutoNorm,
AutoCrawl.
• Repeatable processes with 12 years
training across over 100 M MRO and 4
Trillion Lines of Direct Transactional
Spend
Harmonize: Self-service, Verdantis, Hyrbid
1. High speed repeatable processing by
custom batches by any definition such as
category, supplier, location etc.
2. Collaborative workflow to bring right
resources into project at just the right
time by batch.
3. Over 3700 Verdantis Data Template
Spec Sheets base for MRO.

Verdantis Automated Material MDM Solution
Suite
VERDANTIS AUTOMATED MDM SOLUTION SUITE
GET IT CLEAN
VERDANTIS
HARMONIZE
Automated solution
for historical master
data harmonization
Fully automated
solution to cleanse
and enrich historical
master data
Offered historically as
A turn-key service
Now also offered as
Licensed SaaS
Platform
Automated solution
for real-time on-going
data integrity
VERDANTIS
INTEGRITY
KEEP IT CLEAN
MDM/MDG application
to prevent duplication,
and ensure on-going
data integrity
Artificial Intelligence forms the bedrock of Verdantis’ automated MDM solution suite
AutoClass AutoSpec AutoNorm AutoCrawl
Classification into
pre-determined
codes
Attribute extraction
& de-duplication
software for
Material master
Normalization
& validation of
MFG, MPN and
UOM
Intelligent web
spidering tool for
Data harmonization
Verdantis Knowledgebase
Dynamic content Repository
AI Technology
AI-based Software Tools
AutoClass AutoSpec
AutoNorm AutoCrawl

Material Master - Automated Classification
Material master contains details of a variety of data elements including part
number, description and stocking codes
Software Tools
Automated Granular
Classification
Classification
Material Group Code Input Data
3MM 050
3MP 100
3PM 110
3PN 133
3019
BEARING,BALL,50MM ID X
96.5MM OD , 5212 FAF
BALL BEARING SKF, 6316RS
BEARING BALL, 65MM ID X
140MM OD X 33MM
BEARING, BALL,
AR23144CKYW,SKF
BEARING,BALL,, 30MM ID

• Embed Advances in categorization, classification, and clustering
– Next generation of Artificial Intelligence based classification combined with post
processing closed-loop feedback

MFR
NAME
MFR PART
NUMBER
Category
Code
SHORT NAME BEARING TYPE
BEARING
INSIDE
DIAMETER
BEARING
OUTSIDE
DIAMETER
BEARING
WIDTH
INTERNAL
CLEARANCE
Additional
Information
SKF 6316RS 31171504 BEARING,BALL
ANGULAR
CONTACT,DOUBLE
ROW
65 MM 140 MM 33 MM IBI 14043
31171504 BEARING,BALL
ANGULAR
CONTACT,DOUBLE
ROW
65 MM 140 MM 33 MM IBI 14043
SKF AR23144CKYW 31171504 BEARING,BALL
ANGULAR
CONTACT,DOUBLE
ROW
140 MM 180 MM 62 MM
31171504 BEARING,BALL
ANGULAR
CONTACT,DOUBLE
ROW
30 MM 40 MM 23 MM
FAFNIR 5212-W 31171504 BEARING,BALL
ANGULAR
CONTACT,DOUBLE
ROW
50 MM 96.5 MM 33 MM C3
Material Master - Attribute Extraction

Material Master - Short & Long Description of Parts
Harmonize processed outputInput Columns Quality check

Input Data
Part ID Description Manufacturer Manu_Num
82.69272 Bolt, stud 4.000 len alum w/nuts B7 Fastenal FA32873
AutoClass Output
Stud bolt
Critical attributes Attributes extracted from Verdantis Dynamic Content repositoryNon-critical attributes
AutoSpec Output
DIAMETER
LENGTH
FINISH/COATING
MATERIAL GRADE
MATERIAL
4 IN
B7
Aluminum
3926.90.99.80 Material Plastic / Nylon
7318.15.50.30 Material Stainless Steel
7318.15.50.90 Material Iron Or Steel
7415.33.80.10 Material Copper Outside Diameter >= 6mm
7415.33.80.50 Material Copper Outside Diameter < 6mm
7508.90.50.00 Material Nickel
0.625IN
Plain
HTS classification Decision Matrix
HTS Number Criteria 1 Value 1 Criteria 2 Value 2
7616.10.90.30 Material Aluminum Outside Diameter < 6 mm
Harmonize process for determining HTS-ECCN classifications
7616.10.70.30 Material Aluminum Outside Diameter >= 6 mm

Fully automated solution driven by robust
AI-based technologies
Comprehensive
workflow flow
Seamless integration with
enterprise IT systems
(ERP, SRM, SCM)
Verdantis Material Integrity (MI)
And others
Material Master
Data
Management that
integrates with
your ERP
backbone
Materials can now be
closely tied across
the enterprise for an
efficient supply
chain
Real-time data
synchronization
that allows single
version of clean,
accurate material
data
Access to
accurate
material data for
procurement and plant
management teams
Verdantis
Material
Integrity
SAP
Oracle
Maximo
JD Edwards

42

We can help: Verdantis Free POC Evaluations
• Determine POC Objectives and Scope
• # of Item Masters and Source Systems
• Select Data Sample
• Language requirements: Free English
• Select Taxonomy & Attribute Templates
• Verdantis Processes Data
• Fully Classify POC data set
• Fully Cleanse a subset of data
• Non Source Enrich a subset of data
• Flag duplicates for processed Items
• On-site Review of Deliverables
• Data Analysis and Output
• Draft Budget Proposal
• Business Case Recommendations
0
200
400
600
800
1000
1200
1400
1600
1800
0 5
838
1,656
Segment
Family
Class
Commodity
Learn:
• Quality of Data
• Compatibility to automated
approach
• Potential duplicate levels
• Estimated budget
• Recommended Scope &
Resources

PRODUCT
HARMONIZE
PRODUCT
INTEGRITY (PIM)
Quality Master Data to Improve your
Business Performance
MATERIAL
HARMONIZE
MATERIAL
INTEGRITY (MI)
CUSTOMER
HARMONIZE
CUSTOMER
INTEGRITY (CIM)
SUPPLIER
HARMONIZE
SUPPLIER
INTEGRITY (SIM)
CLEAN IT WITH HARMONIZE
KEEP IT CLEAN WITH INTEGRITY

Master Data Solutions
www.verdantis.com
info@Verdantis.com
Toll Free +1 866 987 4463
Get access to many more research papers and case studies in our
Knowledge hub!

Quality Master Data for Improved Business Performance
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