Whether you are migrating to an ERP system for the first time, or the nth time, you need to do certain data activities. Here are 5 reasons why you should put significant pre-project effort into streamlining your material and material-plant combinations.
Data quality will improve
When an organization puts a given amount of effort into their data preparation with a focus on a smaller data footprint, the relative effort per material-plant combination will increase. Thus, the overall data quality will improve.
Ongoing data maintenance will decrease
If you have a smaller data footprint, the ongoing data maintenance will continue to be smaller going forward. Consider, for example, how every manufactured material requires a BOM for every plant. Of course, if multiple plants routinely manufacture a material, then you should set up and maintain the material-plant combinations. All require BOMs. If, however, you are contemplating setting up a material-plant combination because “one day we just might want to manufacture this part at another plant”, I caution against that.
I have seen far too many “maybe” scenarios never happen. The data maintenance team is saddled with the creation and ongoing maintenance of never-used data elements for the life of the ERP system. This is a tremendous waste of valuable data maintenance resources. They should be laser-focused on the critically important data rather than diluting their efforts with the “might never happen” scenarios.
Then you will see the “skeletons in the closet”
To properly streamline materials and material-plant combinations it is necessary to thoroughly investigate and characterize where and how you use materials. The fact that a given material has inventory means something must be done with it either before or during migration. If the inventory is healthy and active, then setting up the materials and migrating the inventory to the new system makes sense. If the inventory is inactive and/or obsolete, however, then the organization must decide what to do with it.
Can the product be reworked and sold, or must it be disposed of? Equally important is understanding how it came to be. Was this the result of an over-make by Manufacturing? A poor forecast by Sales? A canceled sales order? A quality issue? Have we found the solution to the underlying cause, or is it continuing? Is this symptomatic of a larger underlying issue? Understanding and addressing these sorts of questions will provide great insights into both the organization’s capabilities and mindsets. This is often a rich source of improvement opportunities and organizations are wise to address these deficiencies early and often.
Product portfolio improvements naturally follow
In characterizing materials, it is helpful to define the specific attributes used to identify individual products. In doing so, it is common to find that two or more materials have (mostly) the same attributes. This implies that there are either redundant materials or that some important and distinguishing attributes are missing. Regardless of which situation it is, just the mere process of chasing down that answer often brings about an enlightened understanding of the product portfolio and leads to questions such as “why do we have so many materials that appear to be so close in fit, form, and function?” Addressing that question satisfactorily can take months. Thus, you should finish it before the formal ERP project kicks off.
It will reduce operational mistakes
Most ERP systems have advanced search functionality that enables users to rapidly find materials, plants, storage locations, and the like. Unfortunately, most ERP systems don’t have a foolproof mechanism to help users discern between material-plant combinations genuinely intended for use and those set up “just in case someday we might want to use it”. Therefore, having both flavors of choices available to users will possibly result in mistakes. The best way to avoid these types of mistakes is simply to not even set up non-intended options in the first place.
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Source: ERP news