Lean Master Data Management

Honeywell Customer Master Data Governance Visibility Changes the Game Nancy Northrup, PMP Customer Master Data Governance Leader Six Sigma Black Belt, + Lean

Contents Introduction Honeywell International The current state Governance Begins Measure and Model – Six Sigma Lean as a core focus What is Lean Lean concepts applied Current and Future Focus Wrap up Appendix

Honeywell’s Strategic Business Groups (SBGs) 2006 Sales Total = $31.36B Diverse Businesses, Technologies, Products, Channels 35% 15% 35% 15% Aerospace Specialty Materials Automation and Control Solutions Transportation Systems

Summary of CD2 Usage Reflects the Need Multiple uses for cross Honeywell view

It’s All About Growth Is this customer also a vendor? How is the Customer’s business growing and changing? Do other Honeywell business share this Customer? Source: Adapted from BI presentation D.Clark Dir. BI SM Dave needs it by Monday

Pre-Customer Data Integration Standard financial code names But definitions are not standardized Data maintenance at the individual line of business level But no central repository No Customer Relationship Management controls Limited customer interaction awareness Mergers and Acquisitions create additional complexity Acquired competitors continue competing Customer Knowledge Sharing Done by “Talking” High Labor Costs / Low Return Constrained Growth

Finding Barriers and Enablers in Honeywell Historic autonomy in a diverse company Accountability for strategic initiatives at the operational level Integration of multiple versions of SAP Enormity of legacy data quality issues Complex distributed customer creation authority in a global corporation Continued growth through mergers and acquisitions Barriers Buy-in of top management Engaged middle management Business Case for CMD quality Well-executed communication plan Inclusive council membership Goal-driven program Regular progress measurement & reporting Distributed decision-making Data standards and best-practice processes Tool support for data cleansing, maintenance and system integration Data stewardship and quality activities integrated with the day-to-day processes Real benefits for front-line workers Enablers

Define Phase Begins Structured approach using Six Sigma DAMIC Define, Measure, Analyze, Improve, and Control Engage expertise Dun & Bradstreet Experts in commercial information and insight on businesses DUNS# : site and division specific code provided by D&B Data cleansing and family alignment Incorporate Lean toolsets Value Stream 5 S Supply chain management Cycle time management and cost control Load Balancing

Customer Family Analysis is a Starting Point Deep dive on select group of Customers Researched the data for match candidates Categorized why the candidate did not match to high confidence ( ≥ 8) Framework to understand Dun & Bradstreet (D&B) processing Results are the basis of CMD Governance Council kick-off Unknown address Not Matched By D&B Not sent to D&B Confidence <8 Not matched Under Global Ultimate Quality Actions Generate More Improvements Sharing match results with D&B Drive CMD Governance Business Case Quantifying impact to users Support CMD guidelines Projects and tools for: Data transformation Standardization—codes, naming conventions…

CD2 Value Proposition Enable growth through expansive customer views Establish Honeywell view of strategic customer account sales and purchases Support informed Customer and Supplier visits and negotiations Enables quick response legal and business development inquiries Serve as clearing house for D&B requests to reduce duplicate requests and costs Source: IBM CD2 Study Enable Improved Customer Master Data Governance Facilitate transaction productivity & success Complete customer “sold to” information 360  customer relationship management Provides standardized postal addressing Enables business intelligence reporting Strategic Business Groups (SBG) and Corporate entities aligned on data standards for self-governance and ownership Aerospace Specialty Materials Automation & Control Solutions Transportation Systems Honeywell Customer Creating “ One-Honeywell” Aligned to the Customer

Problem Statement Honeywell is unable to consistently and clearly identify the complete relationship with our business partners which impacts: Assessing credit risk management Analyzing the full relationship for cross sell & up-sell Maximizing value exchange in the relationship Understanding the full relationship with a partner and impact on working capital Providing consistency in product offerings and services, where appropriate Exxon, Exxon/Mobil Buy/Sell position **Dollars are for demonstration purposes only and bear no resemblance to actual data Calendar Year Year 1 Year 2 Honeywell Organization Purchase Sales Sales $$$ $$$ $$$ CORPORATE $$$ $1,000,000 $$$ AUTOMATION & CONTROL $$$ $3,000,000 $$$ SPECIALTY MATERIALS $5,000,000 $$$ $$$ TRANSPORTATION SYSTEMS $$$ HONEYWELL AEROSPACE SOLUTIONS

Honeywell CMD Governance Approach Define the Problem Identity Data & Sources Define priorities Define Core Data Measure Current State Completeness Conformity Consistency Accuracy Duplicate Integrity Control Quality Standardize Monitor compliance Utilize common tools, services, processes Identify & share best practices & lessons learned Improve Data Integrity Ensure validity Establish baseline Re-design processes Promote reuse / best practices

Customer Data on Demand (CD2) Overview Improve service & growth: Establish Honeywell view of strategic customer account Provide information expediently to support business development Provide information to support informed Customer visits and negotiations Improve Customer Master Data Governance: Facilitate transaction productivity and success Complete 360  view of customer relationship management SBG’s and Corporate data standards for self-governance and ownership ERP DW CRM D&B Customer Master & Summary Info Staging User Interface Administration User Interface 360 ° View Transaction Processing Customer Data on Demand Hub Business Unit Applications & Technologies Cleanse, match & append: DUNS, Parent Global Ultimate & SIC Code User Interface SAP BW Datamart Reporting Business Unit SAP Environment Data & Service Vendors

CMD Governance Council Vision Improve Establish business case for CMD quality Share lessons learned, techniques and tools across organization Establish and implement CMD guidelines and standards Guide, Monitor, Control Implement audit and metrics to ensure compliance Composition Business process owners Order Management Accounts Receivable Stakeholders Information Technology Users and creators of CMD Customer Service Sales and Marketing HCS

Governance Council Principles and Responsibilities Strive for a core set of customer master data (CMD) standards and guidelines, globally common across Honeywell Implement and oversee effective and efficient processes for managing and ensuring the quality of the core set of CMD Build Data Quality into the stewardship processes, creating and managing data at the source Set objective metrics and reasonable targets for managing data quality Share lessons learned across SBGs Guiding Principles ground all design and recommendations

Customer Master Data Management Program Charter Mission: Provide common master data standardized, agreed-to, consistent format across Honeywell for Customer Master Data (CMD) records independent of source system but with an SAP focus. Value Proposition: Data Integrity: Correct customer alignment Improved productivity through common process Improved reliability and validity of reporting & analytics

Customer Master Data Management Program Charter Scope: Global Honeywell Organization Information domains—core customer master data Processes—customer master data creation & update supporting common processes Technology—ERP (SAP, Seibel, Oracle), data cleansing tools, MDM solutions (i2, WCC, SAP…) Boundary Statement: This project will not attempt to “fix” legacy systems despite their continued operation through 2012, but highlight areas impacting the move to SAP for pre-load data remediation. Implementation: Due to the independent schedules of SBG SAP implementation efforts, timelines will be negotiate with each SBG.

Customer Master Data Management Program Charter Mission Enablers: Enterprise Customer Master Data Governance Council Clear data ownership and supportive staffing Common data management and cleansing processes Data harmonization & consolidation process Unified ERP platform with appropriate tools Goals: Develop business case & priority focus Establish Enterprise Customer MDM program Customer MDM education & communication Solution & services aligned with SAP Enterprise Architecture direction and roadmap

Enterprise Data – Requirements Customer Data is a Valued & Respected Resource Accessible Data access is independent of source or structure Available Data is available when, where & how needed Quality Completeness and accuracy are defined Consistent Consistent data definitions are used across the enterprise Auditable Managed audit trails cross the enterprise Secure Data is secure

Measure and Model Incorporate 6 ơ Lean Principles (The Toyota Operating System)

The History of Lean Thinking Waste triggers root cause analysis Determines opportunities for improvement Process redesign for improved flow Load balanced work groups End to end performance management Standard Work VOC/VOP Quality Cost Alignment Taguchi & Deming Lean Manufacturing Global Supply chain Control/Ownership Henry Ford - River Rouge Plant 1915 Cars for income levels - Paying by installments Collect Requirements Collect historical defect data Alfred Sloan - GM Variation 1926 Resource constraints WWII Focus on productivity Noise isolation Process Robustness 1950 Toyota Operating System USA buy-in to teachings of Deming Customer Metrics Process Control Metrics Functional Metrics Predictive ability (SPC) Scorecards Lean transformation requires changes to tools methodologies, standards, & procedures 1915 1980+

Value Stream Common Repository Driving Common Metadata Incoming SBG CMD Diverse Quality definitions Scrap: incomplete data Files not on time to request (OTTR) Outgoing Reporting Process D&B file CMD Hierarchies Industry Reports Customer Visit Preparation Revenue Reports Send errors to SBGs Load validated CMD into CD2 for reporting DUN & Bradstreet Separation & Cleanse Validate, correct, standardize , enrich with hierarchy Apply confidence codes ID new CMD for D&B send Add established customer and revenue to CD2 for reporting NVA NVA VA VA NVA Supply Chain Management is Cost Management Speed through Standard Work Re-work decreases Cycle time decreases Voice of the Customer Predictable Quality Continuous Improvement

Measure the Baseline Customer Master Data (CMD) Revenue Alignment Honeywell Revenue 64% Revenue ready for CASH recovery and Growth alignment The hidden customer - one customer, many definitions No cross Honeywell standard CMD definitions, or attributes No system independent identifier to enable leveraging strategic customer management Empower the Employees Many source systems, little or no data ownership Data resolution owned & largely executed by CD2 team Little understanding of DUNS#, D&B coverage, or the need to align revenue for recovery Information sharing void No centralized forum for data management No Best Practice sharing through a stewardship network Rejects / Repair Excessive Motion Over Processing Transportation Waiting Over production Excessive Inventory Defective Information Process Failure Wrong or Sub-optimized Decisions

The 5 Lean Principles – Managing Change Specify value in the eyes of the customer - VoC survey for CD2 Engage cross functional team for Governance Make the processes flow – Material Flow Analysis Perform 5S Identify all the steps along the process chain Enable process re-design Make only what is pulled by the customer Reporting Strive for perfection by continually removing waste End to end performance management Empower the employees - The business owns the data Ownership & Responsibility Activates Problem Solving Predictable Trainable Measurable

Load Balancing: Leverage Business Knowledge Year 2 SBG Data Stewards own data integrity. Project Manager trains, tracks, & reviews progress Driving Business Data Ownership Institutionalizes Stewardship Year 1 Project Manager / Data Steward SBG N/A N/A SBG N/A N/A I’m tired

Lean Maturity Pyramid – Data Quality & Completeness Assess the maturity level Sort, Store, Shine, Standardize, and Sustain 5S Workplace Organization Share Information Share Standards Build Standards into the Workplace Prevent Abnormalities (Error-Proof) Stop Abnormalities (Prevent defects from moving on) Warn About Abnormalities (Build in alarms) Visual Display Visual Control SBU CMD Sold-to Transactions Feed CD2 Governance Council Kickoff Metrics Management Managed State Lean Begins with Information Sharing Data Cleansing Effort Define CORE CMD Standards Standardize DUNS# Storage Define Metrics Tracking & Trending Mechanize CORE CMD Standards, stage II Mechanize CORE CMD Standards, stage III Enterprise MDM alignment, stage I Enterprise MDM alignment, stage II Enterprise MDM alignment, stage III Mechanize CORE CMD Standards, stage I Year over Year Effort 6 5 4 3 2 1

5 S Process SUSTAIN Monitor / Measure Utilize documented standards STANDARDIZE SHINE Take corrective action STORE Create a place for everything SORT Keep only the necessary to perform the task

Sort Establish goal and standard definitions Goal: Deliver continued improvement in CD2 quality Establish Scope and Criteria High confidence D&B DUNS# match to Sold-to customer records aligned with sales dollars Define ownership - SBU owned and managed, CD2 team assisting Store Shine Standardize Sustain Sort

STORE Determine required quantities Label needed items Maintain transaction traceability Define D&B DUNS# as key code – system independent & family linkage Create a place for everything Define scrap and remove from the process Enrich CMD records through the D&B process Develop shadow boards aligning CMD by family Sort Shine Standardize Sustain Store

Shine Corrective Action - Resolve CMD returned from D&B with a low confidence (LC) or non-match (NM) SBG created and owned Maintain audit trail – source system & customer number Utilize Standard Work process Enlist resources Identify SBG Data Stewards Track & drive results in weekly status meetings Create standard work Provide consistent format Conduct Training on documented process Provide D&B suggested low confidence match Enable mechanized correction Sort Store Standardize Sustain Shine

Standardize Sort Store Shine Sustain Standardize Create CORE Customer Master Data Define elements and attributes Obtain consensus across organizational lines Define unique identifier System independent D&B DUNS# Install in SBG systems SAP FI Credit Master Credit Info.No. (KNKK table)

Sustain Measure Quality & predictability Definition: Percentage Honeywell yearly revenue aligned with D&B DUNS# Measure Re-work Drives Cost Containment & need for mechanized standards Definition: Cost of employee time + opportunity cost Measure Scrap & On Time to Request (OTTR) Drives Data Completeness Definition: Scrap (unusable record) for first pass yield per file Example: CMD record with no associated dollars, blank customer name, blank country, unusable record Sort Store Shine Standardize Sustain

One Honeywell Focus Build in Quality: Populate SAP FI Credit Master with DUNS# Create SBG specific Roadmaps for Change Roll out Informatica Data Quality Tool Process Improvements: Standardize data stewardship processes Leverage CMD Governance Council for cross Honeywell best practices sharing, stewardship support, and decision making body Leverage CD2 as D&B central

Quality and Completeness Key Data Requirements: Customer master data from all SBGs and source systems providing a comprehensive understanding of customer entities and relationships Defined data quality Properly identifying business organizations enabling building corporate families & associations Providing complete & consistent name, address & codification Name Source identifiers (source system name and customer number) Address lines, city, state and country Telephone number Honeywell organization identification

Source System Data Quality Common Errors: Blank, special characters Name – “ Do Not Use, Unknown ” Address (lines 1 and 2) - “ Accounts Payable, Directives ” City - “ unknown, numbers, concatenated ” State - “ unknown, numbers, concatenated ” Country - “ unknown, numbers, concatenated ” Postal code - “ all zeros, punctuation ” Phone numbers - “ all zeros, punctuation ” Lack of naming / codification standards Trigger and compound errors Store location numbers, country spelling, territories identified as states, etc. Captured on Monthly Scorecard

2006 - Corporate Drives Enterprise Data Management Forming Governance Council formed Storming Corporate leads in data cleanup Norming Data Quality tools assessment Conforming Agreement to seek CMD alignment Kickoff - Charter / SIPOC Sub-teams 86.7% achieved Informatica Data Quality Tool Baseline data gathering CMD Core field straw-man

Business Drives Enterprise Data Management Goal Alignment across One Honeywell Automated Control Solutions Common Standards Aerospace Data Quality Integrity Specialty Materials Strategic Management Transportation Systems Business Reporting Corporate One Honeywell Honeywell Credit Services Improve Working Capital

Customer Data Integration Standard financial code names But definitions are not standardized Data maintenance at the individual line of business level But no central repository No Customer Relationship Management controls Limited customer interaction awareness Mergers and Acquisitions create additional complexity Acquired competitors continue competing Customer Knowledge Sharing Done by “Talking” High Labor Costs / Low Return Constrained Growth CD2 is a central repository for Customer Data Integration Consistent code definitions Report requests OTTR 1 or 2 days CD2 enables view into customers across Honeywell Insight into the customers of other Honeywell businesses M anaged CRM CD2 enables view into industry codes aligned to Honeywell customers Alignment of customer by business through SIC codes (industry type) Enabled competition Managed and Enabled Customer Knowledge Sharing

Positive Feedback but What have you Done for me Lately? It helps to see in total what Honeywell means to the customer The tool is really valuable! CD2 information is critical because each business unit is on a separate system. CD2 helps identify our potential leverage and risks, particularly for big contracts It helps to understand our risk exposure The visibility that CD2 provides really changes the game! The people that use it frequently should think about the 5 things it has caused them to do differently and start tracking it It used to take me 1-2 weeks to pull the information together that I can now get from CD2 in 24 hours! CD2 saves a massive amount of time and improves the quality of the data We’ve had One Honeywell chats forever, until you use these reports you don’t start thinking outside of your business unit. CD2 is fostering collaboration across Honeywell. Source: IBM CD2 Study

Data Governance Reality Check Don’t think that a tool will solve all your problems Don’t forget that Data Governance is required & on-going Do remember that life is made up of baby steps Do pick your battles – be flexible Don’t ignore the significance of data stewardship Don’t over do it or do it at the wrong time Don’t think it will be easy

Lean Master Data Management

More Related Content

What's hot (20)

Viewers also liked (20)

Similar to Lean Master Data Management (20)

Lean Master Data Management

Editor's Notes