Industry Standards Suggest...

With over 20,000,000 SKUs cleansed, it’s safe to say that I.M.A. has seen its fair share of poor data. While each project is unique in its own ways, our twenty-three years of experience has shown us that some statistics remain similar across all projects. Today we will take a look at each of these industry standards and learn how to calculate your own potential cost savings opportunities.

The first and possibly the most obvious industry standard suggests that most companies carry 10-15% excess inventory. These excess inventories include all over-stocked items which have compiled over time. This high percentage of excess inventory can cost companies millions of dollars and will continue to grow without a proper process of identification and elimination.

The second industry standard suggests that duplicate items represent 10-15% of all MRO inventory. These duplicates may be identified as either direct duplicates, meaning they have the same manufacturer and part number, or by “fit-form-function,” meaning they are not made by the same manufacturer but have identical characteristics.

The third industry standard suggests that commodity purchases are often spread across a multitude of suppliers at a unit cost premium of 5-8%. When I.M.A. conducts an analysis of transactional history, supplier spend is often one of the areas of highest inefficiency. Once supplier spend has been identified I.M.A. can assist clients to consolidate the supplier base by establishing preferred supplier programs, allowing clients to capture the most competitive pricing available.

The fourth industry standard suggests that Spot-Buy purchases can represent up 30% of the annual maintenance spend. This is an enormous figure that costs companies an incredible amount of money and can easily be avoided with proper inventory management. During an inventory optimization project, I.M.A. will analyze transactional history to identify Spot-Buys and recommend proper min/max levels for improved forecasting abilities.

The final industry standard suggests that on average only 5% of multi-site manufacturing organizations are able to view inventory levels across all locations. Due to acquisitions and system implementations, most multi-site organizations do not and will never operate on the same platform, making visibility across the corporation almost impossible. In an effort to resolve this problem, I.M.A. recently introduced a unique new Enterprise Visibility solution which allows clients to view min/max levels at all locations across the corporation, no matter what platform they are operating on. This valuable tool further adds to cost savings by enabling efficient asset utilization within the corporation, specifically for critical spares, high priced items and items with long lead times.

Throughout the past twenty-three years I.M.A. has proven that every company can benefit from quality materials master data. Using these industry standards I.M.A. is proud to offer a FREE ROI calculator available at www.imaltd.com . Try it today and discover the hidden savings!

For more information on Data Cleansing and related services, contact info@imaltd.com.