For everyone who’s spent years arguing the importance of great supply chain management, this year showed just how true it really is.
Great supply chains don’t just happen. They’re solidly built on pillars of people, process & technology – and continually improving best practices. Think of supply chain as an ecosystem that needs all four.
Important to supply chain greatness is item master management. Already managing yours like a boss? Or still have room to improve? While many organizations have gained ground, a few fundamental steps can spark improvements. Item master management is never one and done.
It’s worth it. Every item master improvement helps to…
• Streamline work and increase automation
• Ensure best pricing
• Achieve hard and soft dollar savings
Take 7 steps to item master mastery
1) Give yourself a grade. No bell curving. Evaluate the current state of your item master by answering fundamental questions like: Is your item master the single approved formulary for your organization? What percentage of spend isn’t going through your item master? Do you follow a process to identify and add recurring items, and manage data elements like unit of measure and contract price? (We can help you with more detail here if you need it!)
2) If your item master isn’t an “A,” improve it. Identify the most relevant products and ensure they’re in your item master. Pull PO history for 12-18 months and find frequently purchased products that aren’t in the item master (or even on contract). Conversely, eliminate products you no longer use, discontinued items and duplicates. Don’t upload vendor’s product catalogs; you may add items you don’t buy.
3) Build greatness in product descriptions. Make sure all product descriptions are updated, cleansed and normalized, classified with UNSPSC, with correct units of measure. Normalize descriptions to a specific standard for your organization. Start with the noun, then adjective / attributes. Example: Gloves, size 7 powder free latex. This way, it’s easier to find items you’re looking for (and it’s easier to identify duplicates).
4) Verify correct contract price with your GPO. Be sure you’re getting your best available price and also, that you have updated pricing for automated 3-way match with invoices.
5) Consolidate and simplify! Is the same item carried by multiple vendors and listed multiple times in your item master? Consolidate to save time by maintaining fewer items and fewer vendor relationships.
6) Standardize your process for maintenance. Decide who can add to the item master and what rules will be followed. Larger organizations often have a team that can make updates; smaller facilities usually designate a single person. Ensure clear guidance is in place for anyone authorized to make additions.
7) Now, enable the right purchasing decisions. Drive buyers to your approved formulary, where requisition templates guide purchasers to approved, on-contract products.
Unlock item master success
Your accurate item master is a key to purchasing automation. As the source of truth for your organization – whether nationwide or a single facility – it unlocks the door to efficiencies and savings.
Learn more about Envi modules that support and improve your supply chain processes, or check out recent ideas that help improve your item master.