This video outlines the most frequent issues we have seen our customers experience and ways we have been able to help them.
This webinar includes the new DFR v10.5 demo!
Key Learning Points:
- Mitigating high supplier pricing
- Misclassifications of spend
- Too many vendors by category or sole sourcing
- Integrating technical and commercial data
When we talk to companies who are just starting their classification journey, we provide them with the best practice framework focused on obtaining the most value from their classification project. All too often this work is done in only one division or it becomes an “engineering searchability” project which limits the value of the project.
When making an investment in classification, the budget for this program should come from these sources:
- Person responsible for direct material spend – VP of Operations, CFO, or CPO
- ERP or PLM Deployment budget
7 Best Practices for a Parts Classification Project
The advantage of taking this approach is that you only go into each category once. You don’t want to have to go into each category multiple times. This will allow you to have a much better chance of finding cost savings. Lastly you will be in a better position
to prepare the data for your global PLM system. You don’t want to have to keep updating your PLM system with changes. The video below describes the process to prepare your classification data for cost savings and sourcing cost savings.
Here are some useful links and videos:
• 15 min PLM Classification Process video:
• 5 min Clustering video
• 1 min Explainer video
• DVA Case Studies
• CDS Brochure
- Target high value parts for classification – high spend, proliferation, too many vendors, shared across programs, etc. Start with the 10 top categories using this criterion.
- Pull all the parts from each organization for each category – this is the biggest bang for the buck approach.
- Assign one (1) Engineering SME and one (1) Purchasing Category owner for each commodity – they will approve structure and data. You don’t want too many cooks in the kitchen.
- For each part – provide part number, part description,
MFG Part Number and MFG Name, drawing or specification.
- Obtain the commercial data for each part – provide pricing,
supplier names, buying org and volumes.
- Clustering – once each category is complete, look for clustering opportunities – this will expose cost savings for procurement spend rationalization. Clustering will expose parts with higher prices compared to other similar parts with lower pricing.
- Load classification data to PLM - make sure to validate the data against the PLM systems rules. This saves time dealing with load issues.
Convergence Data is a Software as a Service (SAAS) company. This means that we use our software every day along with our customers. Doing so keeps us on top of the refinements and enhancements we need to make to make DFR the best classification software it can be. We have mitigated the challenges other systems like PIM and PLM can have with managing this information.
We have summarized what we think are the top 10 areas in which we provide the maximum benefit in a classification project for your PIM or PLM system deployment.
- Classification structure can be imported from different sources - PLM, excel then fine-tuned to global standards while adhering to best practices in DFR.
- Classification changes are simplified with DFR's multi-select capabilities - copy and paste multiple categories at once or prune and graft to move parts and categories all in one operation
- Convergence provides best practices in classification category development to ensure your structure is optimal for your business mitigating common mistakes based on our 20 years experience
- Classification projects are highly collaborative and may involve a lot of people working on structure and classify parts - DFR's workflow and task tracking process lets you know where you are each step of the journey
- Bulk data cleansing tools allows users to update values in seconds to adhere to approved lists, description templates, and approved units of measure
- DFR allows any type of data to be loaded – even if it’s not correct – then points out the errors and makes it easy to fix. It’s very forgiving and makes fixing errors easy.
- DFR's Validation tools allows a user to select the error type to check or check all errors and run on an entire category – exposes errors and what needs to be fix for every item.
- Data Exporting - DFR Policy manager contains all the rules needed to validate exports to insure publishing to other systems is as efficient as possible. DFR export tool supports exporting item data, classification structure, lists of values, in different formats – CSV, excel, XML and custom formats.
- DFR includes analytical tools used to spot trends in the data – e.g. what part characteristics is driving part proliferation for a category; its clustering capabilities can expose duplicate and near duplicate parts for rationalization. DFR integrates supplier pricing to expose real cost saving opportunities.
- Role based security ensures only the right person can make changes to structure or data or approve and/or reject changes.
DFR PLM Integration
We often hear from potential clients about the roadblocks they face trying to use Microsoft Excel for their classification projects.
This video covers the issues in trying to manage the organization of the data in Excel and then sharing with key product managers to collect feedback.
We demo easier ways to execute many of those Excel-challenged activities using DFR – our classification software and database.
The start of the video provides an overview of DFR. We then get into reviewing the excel shortcomings many companies experience and how DFR helps mitigate them.