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Problems and Solutions

Many industries are characterized by highly capital-intensive plant and equipment. Primary manufacturing industries, like cement plants or steel mills, power generation plants, oil&gas extraction or railways, also have complex maintenance cycles on machinery with a long working life. In these situations the stock of spare parts tends to increase relentlessly. There are many reasons for this: new machines, production lines, product models, company acquisitions and mergers, migration to new ERPs, are all factors that generate the creation of new SKUs codes. New codes automatically mean new physical warehouse items, with associated purchase and storage costs. This situation not only increases warehousing costs, but also hinders other optimization processes, such as comparison between different maintenance processes to identify best practices. Semantics technology allows us to redefine the stock, reduce its size and speed up its rotation. TSV (Total Spending Visibility) gives a picture of the company’s historic consumption model, with a granular classification of the costs of parts, highlighting components acquired through 'Maverick' purchases that ignore company rules from providers not approved by Purchasing. TAM (Total Attribute Management) identifies those SKUs which might be the same, allowing you to reduce stock and increase rotation.
Every Business Intelligence (BI) is based on the right categorization of Purchase Request, Orders, Master Data and many others data processed in the ERPs and other transactional systems. A wrong categorization means wrong reporting figures created with a BI system. This is caused because normally the end-user is not really interested to take care about this and because the current technology of the ERPs do not support it in an easy and precise way. This issue causes a lot of troubles for the people involved that have to manual rework a lot of data trying to fix the errors. We need to take in mind that a human fixing is exposed to human errors and therefor the quality of the BI output cannot be fully trusted. Then if you are struggling against the wrong categorization, improve your purchasing process and BI reporting, making straight away every ERP end users skilled as the most experienced Category Manager of your company. MG Prompt is a Web Service based on a Self Learning algorithm that automatically suggests a suitable short list of categories that fit with the description of a Purchase Requisition, or of a new material, in a set of multiple domains and languages. The MG Prompt speed-up and dramatically improves the quality in the manual process of Category selection, mandatory in many Procurement processes inside ERPs.
Mergers & Acquisitions (M&A) are fundamental to growth in all businesses. One of that factors justifying such moves in terms of profitability, are the synergies that can be obtained from aggregating purchasing volumes. In some industries these synergies are strategic and justify the M&A process by themselves. That is why it is vital to obtain them quickly. However in practice there are barriers that can hold everything up. It is quite possible to rapidly create a unified purchasing department, redefining the roles of purchasing personnel from local to corporate level. But these new Corporate Category Managers need IT systems that give them adequate visibility on the aggregate costs under their control. For complex, multinational companies, perhaps with more than one ERP, global vision of the Consumption Model can be difficult to achieve. The traditional response to the problem has been try to unify ERPs (costly, slow and hard to implement), or through Business Intelligence (BI) systems implementation. But those who use these systems know that the quality of the Spending Analysis is often scarce and unsatisfactory. A Corporate Purchasing organization needs a single system of classification ‘by nature’, that would give to the Category managers a detailed Spending Visibility of the cost under their control, whatever the previous classification in the original systems. ERPs contain valuable information in the description fields of the orders and invoices databases, but cannot use it because it is unstructured. The same goes for BI systems. Today this data can be exploited automatically using Creactives semantics technology.TSV (Total Spending Visibility) lets you classify and make visible objects and services, described in different languages, with different codes, perhaps from more than one ERP, in a single taxonomy with the level of detail necessary to allow the Category Manager to identify savings opportunities, take action and monitor the results.
The retail sector is increasingly extending chains of Stores. Day-to-day management of the Sales Point (SP) involves procuring not only the products to be sold, but also a whole range of goods and services required for running the SP. Optimal management of this type of cost requires centralized sourcing and decentralized procurement. Purchasing has to concentrate its efforts on setting up framework agreements with suppliers of goods and services, negotiating unit prices and service levels; but it must delegate the actual purchases to the individual SPs, automating the process as far as possible and intervening only in cases of exceptions to corporate policy. In many markets one can sign global vendor agreements for supply to several countries. This represents a huge opportunity to aggregate volumes and obtain significant discounts. Another aspect, which must not be ignored, is the cost of the purchasing process. This represents a hidden cost that can often exceed that of the goods purchased. TSV (Total Spending Visibility) lets firms see the aggregate consumption model for these goods and services. 3SP (Semantic Self Service Procurement Catalogue) allows you to delegate procurement to each SP and automate the process.
The proliferation of components is one of the toughest management problems in manufacturing industry. One of the biggest causes of this is that new components are continually introduced at the product design stage. The problem is further amplified downstream by the engineering and manufacturing process, because the majority of IT systems that manage these processes (CAD/CAM, PLM, ERP), approach the task from a specific standpoint and most of the time do not share common master databases, but create their own. But lean manufacturing and quality enhancement strategies like Six Sigma dictate that proliferation must be kept in check, by encouraging the recycling and reuse of existing components. The benefits of reuse are enormous, in terms of production simplification and stock reduction, both during production and post sales. Reuse relies on having material master data free of duplicates, with complete descriptions and technical attributes, making it easy to search for a component that meets the needs of the new product. A system is needed that avoids the creation of a new component if it already exists and has been used in previous products. Creactives’ semantics technology helps you achieve these objectives. Creactives TAM (Technical Attributes Management) support the designers to maximize the reuse of components.