Where’s the value?
Mary Gorczynski 1100006B54 firstname.lastname@example.org | | Tags:  supply-chain-management ibmsoftware software tivoli erp asset-management ibmeam ibmontwitter assetmgmt service-management maximo eam
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Today's blog is from Talat Meraj and Kevin Buonagurio.
Where's the value is a question comes in many forms of course, but the one we will focus on here is: “Where’s the value in using Maximo for our supply chain needs?” This after all is a follow-up to the earlier “Bridging the Gap Across the Seam” article.
As before, this article is meant to spawn more questions then it answers. The fact is that value is a very specific thing that is tough to arrive at, as it is different for every customer. The basics are simple, money. Value often is viewed as money earned or saved as a result of the use of the product. The sales folks would be happy to tell you about the return on investment numbers you could see from your implementation but what we are talking about here is the less tangible value to your users and your business.
With increasing frequency we are seeing customers opt to put all of their maintenance operations business into a single system. This is to say their maintenance, asset and location management, inventory, purchasing, vendor invoicing etc, all on one common platform. This has been the case even in situations where there is overlapping functionality in another system the customer already uses, such as an ERP system.
Where’s the value in this model? ERP systems perform some of these functions and also handle a company’s financials and corporate purchasing. It’s attractive to think consolidation as much as possible on a system like this would be advantageous. On the flipside, niche players focused on purchasing or payment reconciliation or catalog management might be considered a good way to go, by choosing vendors and software a la carte based on who best satisfies each individual piece of their business.
The fact is that many customers are finding their best option is the route that is in between the two. Niche products integrated together create challenges with usability between the products, as well as increased implementation time and maintenance headaches due to the number of integrations. ERP systems at their core they are a financial system with extraneous functionality to support this and other business functions. Using a dedicated system such as Maximo provides the customer a maintenance and asset management system at the core, with supporting functionality to handle all the tasks related to this discipline. Purchasing, contract management, inventory, invoicing etc, all designed with these flows and requirements in mind. They are supported and maintained in one environment with a similar look and feel throughout. In a nutshell it allows the customer to manage their entire asset and maintenance management inside a bubble and pass the requisite financial data to a GL system for incorporation in the enterprise’s other business activities.
Maximo Asset Management system provides robust supply chain management (SCM) features for procuring maintenance parts and managing their inventory. Traditionally, customers would generate demand in Maximo and execute their purchasing cycle in the ERP system and pass the cost information back to Maximo. However, this model created headache and unnecessary burden of maintaining various interfaces - during product upgrades (Maximo and/or ERP); IT will have to be heavily involved to ensure interfaces have not become inoperable.
With Maximo ramping up its SCM features, customers are now moving their purchasing operations from the ERP system to Maximo. Demand is now created in Maximo and fulfilled via purchase order if external vendors are involved. Subsequent receiving and invoicing is executed within Maximo to close the purchasing cycle. If the material is already available, it is simply transferred from the storeroom to the appropriate work order location. In addition, buyers negotiate contracts with vendors and maintain them within Maximo to utilize contracted price, terms and conditions. At the end of the day, information stays within one system available real time, and users do not need to wait for the interface to “run” to get the information synchronized with the ERP system.
We will stop short of championing one approach over another as there is no ‘silver bullet’ for this. We invite you to join your colleagues in discussion about this or other topics by attending a meeting of the Maximo Supply Chain User Group, more information at www.muwg.org, and by attending IBM Pulse 2012, more information here.