Mission Possible – Valmet Item Management Process Conquers the World
Global item management is even more challenging than business bookkeeping. Bad accounting entries can always be corrected, but an incorrect or duplicate item is like changing a faulty engine valve: you have to dismantle everything before you can replace a valve that you already paid for once. The procedure is purely a cost that adds no value at all.
A faulty item may also be taken into use globally in the ERP and spares lists of several companies with numerous duplicated items. Despite this, most of Valmet´s staff take smooth item management granted and have never encountered problems in this field. The background to this new business reality is aMission Impossiblethat began at Valmet fourteen years ago. So what did it take for item management in disjointed global ERP systems to become the “best process” at Metso Corporation, successfully providing current item data to global users in a standard format?
In 1996 Valmet purchased a new ERP system and also decided to realise its long-term ambition of applying systematic common items. Although the main emphasis would focus on commercial items, a standardised format was also introduced for items designed in-house. The idea was to launch commercial items in a new series, with the first three characters (“VAL”) serving to distinguish Valmet items from those used elsewhere, the remaining seven characters comprising a sequential serial number with no inbuilt intelligence, and everything else managed through item attributes and riders.
Our specialist team initially designed a classification tree for commercial items that would facilitate bulk processing and accelerate searches. We promoted the existing item standardisation process and began formulating rules, guidelines and format items. While various specialist teams put together future VAL item families with example items, other groups identified old item fields for conversion into common items.
Shall we get a larger bailing bucket or a new drain plug?
The first VAL items were coded into Item Master by the late summer of 1998, with work subsequently proceeding in a controlled and disciplined manner. Global ERP system deployments nevertheless soon led to growing pressure to accelerate the creation of new entries, with creation privileges granted to a growing number of users.
The first quality problems emerged with the number of VAL items already counted in tens of thousands and the specialist team increasingly focusing on tidying up and supplementing the item stock.
Incorporating the entire body of automation items into the global system was one of my duties at this time as Head of Logistics for the Valmet Rautpohja Automation plant.
Our team meetings in 1999 became increasingly bogged down in the challenge of enhancing quality before I finally realised that we were trying to bail out a boat with no drain plug.
The only prospect of restoring order and discipline was to confine creation and management privileges to staff members who had been continually involved in high quality work in specialist teams, but this also had to avoid delaying or hampering business processes.
Taking full charge of the process at one fell swoop
I designed an application for the Lotus Notes environment that enabled users to create a request ticket quickly and easily. A new item family (electrical component, bearing, fastener, etc.) forwarded the request to the correct processing team.
A Notes application called Item Requests was launched in summer 2000. Instead of the previous 300 item creators, there were now 30 specialists responsible for creating new items, and for tidying up and maintaining the total stock of some 80,000 VAL items that had emerged by this time.
Off to a flying start
Even though new and even overlapping items were being deployed all the time, the team of specialists retained for the launch stayed on board, and work to formulate rules and guidelines continued. We also allocated very considerable resources to translating items. Besides the fact that general materials had to be mastered in 16 languages, the process of globally harmonising commercial names (directional valve, hydraulic cylinder, etc.) called for a great deal of standardisation work, as only one name could be used at a time.
A growing number of corresponding requirements were incorporated into the process as the project advanced. For example a particular spare part for a paper machine might need to be purchased as much as 40 years after first installing the machine. To ensure future technical availability, we linked data sheets to VAL items.
A project that began as centralised item management has now grown into Valmet Master Data Management, administering such areas as:
customer and supplier information
common items, data sheets, 3D models, etc.
electronic intranet standards
signs for products and equipment
safety signs and stickers
brand products (packaging materials with logos, etc.)
management of technical drawing caption translations
category management classifications
eService applications with product photographs
system development to meet business requirements
The Item management has gradually secured a rising number of new customers by developing a customised IT application in-house to facilitate daily item management. The Gizmo platform enabled us to design and develop special applications for business requirements and to production test them in real-time using real data. We even used Gizmo for initially constructing future production data before subsequently transferring this overnight into a dedicated production application that had been completed in the meantime.
The original item management team is currently continuing its work at Valmet, and the basic process model is also still used at Metso. The most astonishing aspect of the process was finding that the basic operating model was perfected more or less at one go, with all fundamental practices and principles remaining unchanged since the outset. Service response times are short and we can readily see how efficient the system is by noting that the original specialist team has now been reduced from thirty to fewer than ten members, despite a fixed workload and a steady rate of creating new items.
Although item management must continually respond to the challenge of cost control, one thing has become quite clear over the years: you must get it right first time and allow for global quality and availability. Otherwise the exercise is entirely pointless.
Olli-Pekka Tuikkala has worked at Valmet/Metso for more than 25 years, initially in designing duties and subsequently in various procurement and logistics capacities before becoming Senior Service Manager for global Master Data management and standardisation.