If you have ever worked in manufacturing or any logistical capacity that supports manufacturing; then you have worked with the Bill of Materials. BOMs are the core of your logistical master data. An inaccurate BOM can discredit existing or future manufacturing Enterprise Resource Planning or Business Process Management Systems (ERP or BPMS for short). By updating or upgrading these systems, you put your company and your customers potentially at risk for these data inaccuracies. In taking ‘true’ ownership of your companies BOM Master Data you can leverage against deploying an inaccurate BOM and prevent hurting your customers; all while setting up your company for accurate costing and inventories throughout your process.
Today’s manufacturing companies are continually updating/upgrading these ERP and BPMS systems. The risk and reward for these new systems can be great. But why the perpetual upgrading? Two potential reasons; gain a competitive advantage by aligning more with your customer based systems or gain more transparency in your accounting ledgers to better understand the costing structure through your manufacturing process. But regardless of the why, how do these ERP / BPMS upgrades potentially affect your customer?
The customer isn’t always aware of these ‘upgrades’ to your ERP / BPMS systems, and most firms don’t divulge that information to their customers for good reason. Why give your customer any unnecessary anxiety about your product quality or delivery if you don’t have to, right? But what if your customer notices an unusual ‘uptick’ in quality defect rates or missed shipments trends post-ERP / BPMS upgrade? And how does this effect your business other than potentially losing customers? (let’s come back to this point)
Back to the system ‘updating/upgrading’… the perpetual upgrade cycle can not only be costly in terms of paying annual or even monthly licensing fees, but it can also wreak havoc by creating inaccuracies in the BOM master data and how that data is consumed through your ERP / BPMS systems. But how can any manufacturing company reduce these upgrade ‘fees,’ and gain greater consumption accuracy in costing through their manufacturing process? Simple, take ownership of your Master Data.
Taking ownership of your Master Data is critical to any manufacturing company in today’s world of automated and often complex processing. By taking ownership, you have departmental accountability. Leverage any third parties working to update/upgrade your ERP / BPMS system and make them train ‘your’ people how to manage ‘your’ Master Data. Once properly coached or trained that internal accountability will drive your manufacturing master data to become ‘cleaner’ and well ‘governed.’ Your Bill of Material accuracy will increase via regular departmental audits, and liability to your customer will decrease. And what about the expensive cost of the ‘update/upgrade’ cycle? Well, your company will have the confidence in transferring legacy master data into the new system, and reduce project ‘life-cycle’ deployment costs by not starting from scratch. And by not starting from scratch, your company doesn’t absorb more billable hours via third-party contract entities.
(Now back to the ‘point’ we eluded to earlier). In the end, with better BOM’s you will be selling your customer not only the raw material, parts, components, and packaging that you say you are on paper; but you close any potential legal liability by not selling them something they didn’t pay for. Ultimately, we want the customer always to get what they pay for!
Please contact us if you want to learn more about leading your organization to that level of Master Data ‘ownership’!
At Cogent Analytics, we never stop looking for ways to improve your business and neither should you. So, check out some of our other posts for helpful business information:
