FEATURE SCADA & DATA ACQUISITION
BIG DATA - A BIG DEAL A
Big data is a phrase once seen as a buzzword or a term specific to tech-focused industries - but it has become a key element for many businesses and organisations in gaining insight into a variety of areas. RS Components discusses big data in more detail
n area where big data can have a dramatic effect is in identifying
where efficiencies can be achieved - something that would be of great benefit to many companies. In automation, whilst the focus is on
achieving efficiencies within manufacturing processes, data can help achieve efficiencies within the MRO (maintenance, repair and operations) procurement process - a grossly underestimated area in terms of its true cost to the business. Data provides the information on which informed decisions can be made - rather than using guesswork, which is largely how the procurement process works in many organisations, mainly because the acquisition or analysis of data can be a barrier. RS Components recognised that data and the analytics of it could unlock significant savings in the MRO procurement process and, being a guardian of vast customer data, decided to invest in this area to research the topic further and unveil a process from which customers could achieve true cost savings.
UNLOCKING SAVINGS A partnership with Manchester Business School, which independently verified information put forward by RS, meant that the unlocking of savings could be explored and the method and processes discovered could stand up to any scrutiny, thereby ensuring the outcome is robust. RS Components country manager Didier Goguelin explained, “We have an unrivalled data capability when it comes to customer information. We knew we were in the perfect position to be able to use this to explore consumption habits and work out ways where savings could be made for many of our customers. In an increasingly competitive environment, showing added value is key and many customers now expect this from their supplier. The inefficiencies in the MRO procurement process are often not lost on customers, who are perfectly aware that there could be a better way of working - but the difficulty lies in having the time and the knowledge to look into it and find where the inefficiencies lie. Then of course there is the task of working out a way to tackle them.” Whilst making procurement processes
24 FEBRUARY 2015 | AUTOMATION
more efficient may not always be at the top of the list, customers might change their view on the prioritisation of this when they discover that the true cost of MRO procurement, according to the research carried out by RS, is a ratio of 3:1 of procurement versus product costs. A staggering figure which shows just how important analysis of consumption is in unveiling savings.
AREA FOCUS
According to RS, a focus on areas such as product range, volume and frequency of use, category boundaries that apply over multiple sites and the procurement process itself, is what is needed. Goguelin continued, “Understanding
consumption is critical to the streamlining of processes and implementing the right changes. A major area for inefficiency across many organisations is product - either stocking too much (affecting cash flow and increasing the chance of product wastage through obsolescence), not looking at viable substitutes that generate cost savings through being more energy efficient (thus reducing maintenance costs) and streamlining the amount of products used to reduce product knowledge and training requirements. “Another area is the categorisation of products. Getting companies to remove category boundaries and focus on quantity, regularity of use and criticality to the job is a major step forward in achieving cost savings. When this approach is replicated for multi-site organisations, it isn’t hard to understand how the savings could be dramatic. This is where the data quality and analysis is vital.” The RS research also demonstrated that
streamlining ordering and invoicing can dramatically reduce procurement costs since fewer product ranges and fewer suppliers allows for greater efficiency in order and invoice processing. Goguelin added, “As well as highlighting
the inefficiencies and showing where cost savings can be made, a key part of the process is benchmarking - measurement of success of any cost saving strategy is key to maintaining efficiencies and improving on them, and also helps in terms of stakeholder engagement as the results will
/AUTOMATION
Above: RS Components country manager Didier Goguelin
speak for themselves and secure further buy-in. Another crucial element is building consensus - there are many disparate elements in the procurement process, with people across finance, engineering/design and operations involved and all with their own agenda and priorities. In order for efficiency to be truly achieved, they need to work together for the common goal. Our research has shown that as much as 35% in savings can be made if stakeholder engagement is applied, so it’s critical.” Goguelin also stressed the importance of commitment to the cause and not looking at this as a one-off activity but a way of working. Data cleansing is key to the process as well as close monitoring to note any consumption changes. Following the research and based upon
it, RS set about developing a formalised end-to-end Value Process that can be applied to all customers and help them achieve significant savings, focusing on optimising a range of key areas. This has removed the perceived hassle factor for customers, which has often been the barrier to action. Goguelin concluded, “Working with one
supplier that can continually monitor and review consumption data will ensure savings are maintained. We believe that it is the future of supplier/customer relationship longevity as companies increasingly rely on data to make informed decisions that affect business profitability.”
Below: big data is gathering pace as a vital component in releasing MRO savings
RS Components
uk.rs-online.com T: 0845 850 9922
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