MDM from a Supply Chain Perspective or Key success drivers for projects by Donald Pilkey, CPIM MDM and Data Governance Practice Lead Broadstreet Data

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1 MDM from a Supply Chain Perspective or Key success drivers for projects by Donald Pilkey, CPIM MDM and Data Governance Practice Lead Broadstreet Data PMI GTISLIG Professional Development Day February 27, 2010

Data Governance Practice Lead Broadstreet Data PMI

2 Donald Pilkey, CPIM MDM & Data Governance Practice Lead Current and recent engagements have included MDM for international Pharma, requirements and design for domestic Insurance and Beverage organizations. Seasoned project manager with 20+ years experience in large-scale systems projects for major Canadian CPG/Food and Bio-Pharma corporations. Prior to joining Broadstreet Data; Program Manager, Relationship Manager and Project Manager within IT for Supply Chain with Campbell Soup and Deputy Director, Supply Chain Systems and Improvements with Sanofi Pasteur. Recent focus has been on Master Data Management, Supply Chain, Business Intelligence Architecture, and SAP lifecycle. Bachelor of Mathematics from the University of Waterloo.

Prior to joining Broadstreet Data; Program Manager, Relationship Manager and Project Manager within IT for Supply Chain with Campbell Soup and Deputy Director, Supply Chain Systems and

3 Agenda What is Master Data Management? What is Data Governance? What is Supply Chain? How Master Data Management and Data Governance solved 3 different Supply Chain business needs. The key drivers Conclusion 3

4 What is Master Data Management Master Data Management is the set of disciplines and solutions that ensures corporate data is consistent and reconciled across subject areas and systems.

5 What is Data Governance Data governance is defined as the processes and oversight for establishing policies and definitions for corporate data. Data governance : puts structure around the decision-making process. it assigns accountability, prioritizes investments, allocates resources, and sets performance metrics. The data governance team ensures the data deployed on projects is aligned with corporate objectives, supports desirable business actions and behaviours, and creates value.

it assigns accountability, prioritizes investments, allocates resources, and sets performance metrics.

6 Who needs MDM and DG? No one can state the it better than the CIO of a very large and now failed European Bank: The reason that we are in this mess is not about data. We had all of the DATA you could imagine so we should have seen this coming! The problem is that we did nothave the INFORMATION. Source: Information Management Magazine May 2009

Bank: The reason that we are in this mess is not about data.

7 Simple Supply Chain Requirements, Demands and Wants Requirements, Demands and Wants Supplier Manufacturer Customer Products, Services and Proposals Products, Services and Proposals

8 Drill into the Manufacturer Supplier Customer Forecast Organization Purchasing (Goods, Services) Schedule Resources (People, Equipment, Time) In-Bound Logistics (Receipts) Manufacturing /Assembling Out-Bound Logistics and Distribution (Shipments)

(People, Equipment, Time) In-Bound Logistics (Receipts)

9 3 Supply Chain Stories Supplier Using Master Data Management to meet business needs Forecast Organization Customer Purchasing (Goods, Services) In-Bound Logistics (Receipts) Schedule Resources (People, Equipment, Time) Manufacturing /Assembling Out-Bound Logistics and Distribution (Shipments)

Services) In-Bound Logistics (Receipts) Schedule Resources (People,

10 1.Purchasing Supplier My first global project seeking to reduce global delivered costs Forecast Organization Customer Purchasing (Goods, Services) Schedule Resources (People, Equipment, Time) In-Bound Logistics (Receipts) Manufacturing /Assembling Out-Bound Logistics and Distribution (Shipments)

Services) Schedule Resources (People, Equipment, Time) In-Bound Logistics

11 Supplier 2.Logistics A sudden event causes new regulatory controls Forecast Organization Customer Purchasing (Goods, Services) In-Bound Logistics (Receipts) Schedule Resources (People, Equipment, Time) Manufacturing /Assembling Out-Bound Logistics and Distribution (Shipments)

12 3.Organizational Structure Supplier Moving from a functional organization to a matrix organization Forecast Organization Customer Purchasing (Goods, Services) Schedule Resources (People, Equipment, Time) In-Bound Logistics (Receipts) Manufacturing /Assembling Out-Bound Logistics and Distribution (Shipments)

13 Global Purchasing Using Master Data Management to meet business needs Purchasing Situation in (2000): Food companies buying other food companies. 4 purchasing centres in Europe, 4 purchasing centres in North America and many purchasing centres in AustralAsia not able to gain volume discounts. Problem: Suppliers are merging faster than Purchasing can keep up. Limited visibility to other Purchasing centres. Unable to identify significant reduction in total cost of materials.

4 purchasing centres in Europe, 4 purchasing centres in North America and many purchasing centres in AustralAsia not

14 Global Purchasing Purchasing Using Master Data Management to meet business needs Approach: Initiate a Global Purchasing Data Warehouse Project. Use D&B to identify supplier relationships and consolidate. Prepare a global material master, with standard groupings, codes and units. Challenges were identified, eg: flavouring Include total cost (purchase price, freight, storage, duty, write-off) Include historical, forecasted, planned, and comparisons by month Result: During User Testing, 1 US Pepperidge Farm and 1 global Godiva Chocolatier person discovered that they purchased the same ingredient from the same supplier for a huge difference in purchase price. The savings on this one material in one year more than paid for the entire global project, before even going live. Go after the rest of the 70,000 materials for savings.

Challenges were identified, eg: flavouring Include total cost (purchase price, freight, storage, duty, write-off) Include historical, forecasted, planned, and comparisons by month Result: During User

15 Logistics and Distribution Using Master Data Management to meet business needs Logistics and Distribution Situation on September 11, 2001: Terrorists attack on US soil. The US government announced that the food chain was the next target and strict control on all aspects of the food chain were being conceived under the new Bio-Terrorism Act (Bio-T). Problem: Our supply chain was integrated within North America for ingredients, semi-finished products and finished products. The Canadian business unit traded with all 3 US business units and were the sole supplier of entire lines of products. This was a huge risk to the financial success of the organization and employees.

Act (Bio-T). Problem: Our supply chain was integrated within North America for ingredients, semi-finished products and finished products.

16 Logistics and Distribution Using Master Data Management to meet business needs Logistics and Distribution Approach: Agree to appoint a high level US representative to engage the US government as an early adopter, thus gaining early intelligence on developing legislation. Commit to being the first company to bring processed food containing meat into the US under the Bio-T Act. Build or Buy. Utilize existing business relationships with customs brokers. Result: The first company to bring processed food products containing meat into the US under the Bio-T Act. Later, the solution and electronic formats were converted to SAP as part of the North American pilot.

Commit to being the first company to bring processed food containing meat into the US under the Bio-T Act. Build or Buy.

17 Functional to Matrix Organization Using MDM and DG to meet business needs Organizational Structure Situation: Transforming from a functional organization to a matrix organization High completion rates and success rates of projects in a functional organization. High expectations. Projects, development and support are designed to meet the needs of a functional organization 1 business owner. Problem: Now 2 or 3 VPs are prioritizing the same projects based on their own needs, creating conflicting priorities. Predict dissatisfaction with the project delivery within 2 years.

Projects, development and support are designed to meet the needs of a functional organization 1 business owner.

18 Functional to Matrix Organization Using MDM and DG to meet business needs Organizational Structure Approach: Propose a single corporate priority process that mandates approval from the Sr VPs before starting any cross-functional project. Make it simple, so VPs can evaluate projects. Result: We proposed and implemented a process where every initiative would complete a one page document in a format where within 30 seconds each VP could understand it well enough to prioritize it. Our VPs gained direct influence on corporate direction.

Make it simple, so VPs can evaluate projects.

19 Key Drivers Select a real business need that will make a difference. Pick a sponsor who understands the need, will push hard at the upper level and will fund the effort. When your sponsor will fund the effort and has identified significant benefits, go for it. Even when the need is regulatory, seek business benefits toward a strategic direction and gain a two for one result. Just because others have tried and failed, don t let that stop you. Learn from past mistakes.

When your sponsor will fund the effort and has identified significant benefits, go for it.

20 Summary What is Master Data Management? What is Data Governance? What is Supply Chain? How Master Data Management and Data Governance solved 3 different Supply Chain business needs. Purchasing, Logistics and Functional to Matrix. The key drivers (strong sponsorship) 20

How Master Data Management and Data Governance solved 3 different

21 Questions? MDM from a Supply Chain Perspective (or Supply Chain from an MDM perspective)

22 Donald Pilkey MDM & Data Governance Practice Lead 130 King Street West, Suite 1800 Toronto, ON M5X 1E3 c: f: e: 22

Supply chain intelligence: benefits, techniques and future trends

MEB 2010 8 th International Conference on Management, Enterprise and Benchmarking June 4 5, 2010 Budapest, Hungary Supply chain intelligence: benefits, techniques and future trends Zoltán Bátori Óbuda