What if item master data would be just as universal as our time?
The time is almost near for the Netherlands to switch from winter time to summer time. Although the discussion is big, I do not want to meddle in the discussion whether summer- or winter- time is better. In fact I want to talk about the UTC, the coordinated universal time. Despite our deviating from the coordinated universal time twice a year, the whole world knows what time it is in the Netherlands
At the time of writing this blog, the switch to summertime has already been made. Here I am in Cape Town, nicely under a hot sun while overlooking a few palm trees. As you may know, Gordian has firmly set foot in South Africa. This means that every now and then a consultant is needed in South Africa to keep the business running. And despite the fact that many things are well arranged, I still need to have regular contact with The Netherlands. In that case it is very useful that both parties know exactly at what time the appointment begins. So with this UTC, we can easily communicate with each other. Even when one is maybe sitting in the dark and the other is still chilling under a palm tree in the sun.
Unfortunately, the same does not apply to the world of spare parts. What do I mean with that? A lot of large companies that have several warehouses, offices or divisions, often have trouble with getting commonality under the articles. With commonality I mean an item has the same item number in for example a South African warehouse, as in a warehouse in the Netherlands. The cause of not having commonality, is usually the fact that when companies start these individual divisions, there is no focus in having the same item numbers as in the rest of the company. This is understandable because in the initial phase of organisations with large assets, arriving at a financial breakeven point is often more important than having common item numbers. However, I dare to claim that if time allows it, and attention is paid to commonality, great savings can be made.
Just look at the possibility by using stock of another location, in case of an unexpected shortage of stock. Moreover this is also possible for share stock of slow and non-movers. So in that case you and your fellow division can share huge investments by storing the spares at only one of the divisions (see also https://gordian.nl/blogpost/werk-eens-samen/).
A third advantage is that you can join forces in the purchase process. This can lead to better deals with your supplier. For example, by increasing your purchasing volume. This list is far from completed, but I think the point I am trying to make is clear.
We can also go a level up: as with time by setting up a meeting, it’s also possible with a person outside a company. For example worldwide. What if we also strive to commonality in spare parts outside the borders of the company? In this situation, you can even share your stock with your neighbour. Or when your supplier is out of stock, he might be able to point to one of his clients since he can see if there is any stock available. We call this a vertical supply chain integration. We as Gordian already started with this concept in the SBIC project (https://gordian.nl/nieuwsitem/grip-op-de-spare-parts-supply-chain-door-meer-transparantie/).
If we look at all these possibilities, then it is a pity that many companies still do not bother to invest in solid item master management. Maybe this blog has woken you up. I like to work with you to a global commonality … in more than just the UTC.