Monday 24th Oct 2016 - Logistics Manager

Keeping track of standards

In planning a project one overarching goal was reducing the amount spent on procurement by 30% in three years.

To support this goal, Bombardier sought a data quality solution that could improve critical product and inventory data, including orders, parts, and materials in addition to name-and-address data. However, much of the identifying data was buried in free-form text. In choosing the Trillium Software System, Bombardier found a solution that could process name and address and specific business data concurrently – all for the price of a standard licence.

Like any capital-intensive manufacturer, Bombardier saw opportunities for big savings in streamlining its $1.3Bn procurement operation and in reducing inventory:

Procurement: savings of 3-5% annually is a conservative estimate of how much Bombardier will gain by negotiating more favourable contracts based on an enterprise-wide understanding of supplier relationships. In fact, the team discovered that one supplier, who was thought to have a $4M-$5M relationship, actually did $135M. An added benefit was a reduction in the overall number of suppliers.

Inventory: an up-to-date unified view of all inventory let Bombardier save significantly. It spent less by using surplus from one location at another and it eliminated the weeks, sometimes even months, of delay in waiting for specialty parts ordered from a supplier. Bombardier also reduced inventory by eliminating rarely used and obsolete parts. “We can now track globally where parts are with the push of a button,” says Dr. Claudio Gruler, project integration manager at Bombardier.

Now, data for strategic analysis and business intelligence is distributed across the enterprise to about 300 decision-makers.

A unified customer view has also increased Bombardier’s up-sell and cross-sell success and allows the company to apply common pricing policies around the world. Like many companies, Bombardier actually lost money on small orders – in this case, those under $180. The company has been able to reduce these types of orders significantly.

The Bombardier team designed, developed, and implemented processes in the Business Data Parser to handle materials, parts, and products information for the entire set of legacy systems in two six-week phases. In just six weeks, using four people, the company loaded, standardised, and linked all 1.6 million German parts into their SAP Business Warehouse, integrated into the extract, transform, and load process. During the second six-week period, another 1.2 million items from multiple countries were codified. After implementing the Trillium Software System, about 88% of records were matched with product codes, which covered 96% of all of Bombardier’s parts and materials. In one large ERP system, the team found that of 1.6 million parts, 1.4 million had been assigned the same dummy code, ‘999’ in a mandatory field.

The Trillium Software System architecture and product offering was attractive to Bombardier because it supports scalability across any geography. The integration team has a formal project step for assessing the business benefits of specific initiatives, but it’s still a little too early to tell. Bombardier says it intends to reduce procurement costs by 30% in three years and that the Trillium Software System is helping a great deal to keep that drive on that track.