Many organizations struggling with the quality of their MRO data. There also can be discussions about the business value of it.
One thing is clear: MRO items themselves are critical to manufacturing business and have value. The value can be small (a standard bolt) or significant, such as a major component of a heavy industry production line. But what about the data about these parts? Is there value?
The obvious answer is that there is value. The outcome would be undesirable if warehouses were full of MRO items without data about them. Good data, on the other hand, creates value: for example, data about the MRO items likely leads to the ability to optimize MRO item inventory levels better. Thus, there's value in managing capital allocation. Another example is that good data likely allows for more efficient sourcing of the items, meaning lower costs. And so on. The figure below outlines a few of the levers of the value of data in the case of MRO items.
Some of these are more "direct" (like good data allowing excess or unused inventory to be sold). Some are more "indirect" (like avoiding business continuity risks by visibility to the available items and their use).
However, regardless of the type of value identified above, the data is not an asset by itself. The value can only be found in the context of the actual asset, i.e. the items themselves and their use.
A closer look at the value
While intuitively obvious, the data's value is difficult to pinpoint. There are a few reasons:
Value of data is spread out to different functions: inventory value, maintenance operations efficiency, and sourcing optimization, all benefit from better MRO data.
Conflicting interests in using the data & leveraging the value: Someone looking at the inventory value may have a different view of what an "optimal" level of spare part inventory is than someone responsible for maintaining the plants. For the former, good data is a lever to decrease the amount of capital tied to the inventory; for the latter, good data may uncover the need to increase the inventory to ensure business continuity.
IMMENSE amount of data is available about MRO items and not all equally relevant: MRO items themselves are end-products of complex manufacturing operations. A mundane seal or screw, if going to the detailed level, has incredibly many data attributes about the dimensions, physical properties, materials used in its manufacturing, etc, etc. In some cases, the tiniest details matter (just ask NASA engineers about o-seals and their properties and what happened to Challenger). In most cases, they don't.
Value is not a linear function of the quality of the data: if there are, e.g., 200 000 MRO items needed to maintain a plant, they all are not equally important from an operational, inventory, or business continuity perspective. Some matter more than many. And the same applies to the data about them.
Another perspective on the value of data is the cost of data. Similar difficulties arise in assessing the costs as they are often equally distributed across the organization: some falling to IT, some to sourcing, and some to maintenance.
What about the costs of MRO data?
Fixing data of MRO item data can be a significant effort, if the data in an unharmonized state. The costs depend on the situation, but can be roughly classified as:
When both the benefits and the costs are understood, the effort needed can be better estimated. Definio is happy to help with the work!
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