Procurement matters more for BAE Systems than it does for most other organisations. The aerospace and defence behemoth operates across 40 countries, purchasing products such as advanced materials and jet engines.
As such, it’s not surprising that these procurement decisions are subject to high levels of scrutiny, both by internal teams, governments and commercial customers. Given the nature of the sectors BAE Systems is working in, there’s also a lot of pressure to make sure the organisation’s suppliers meet its high ethical standards.
What data challenges did BAE Systems face?
Starting in 2016, the A&D giant wanted to improve its processes for supplier onboarding and master data management (MDM). Its goal was to establish a global environment, but one which also incorporated local capabilities and workflows where necessary. The organisation considered using its existing systems to see if they could be expanded to meet its requirements, but quickly discovered this wouldn’t be possible.
“This was always going to be a big project but the potential payoff would be large too,” explains Jerry Grable, director of eBusiness at BAE Systems, Inc. “As such we needed to make sure we found the right partner and, importantly, technology that would be flexible to support the changing environment in the long term.”
The new system had to meet the company’s key requirements, namely that it should be a software-as-a-service (SaaS) offering, and that it must be flexible enough to meet both global and local needs simultaneously.
BAE Systems uses multiple enterprise resource planning (ERP) systems, and each has its own processes in place. Added to that is the fact that the organisation has people operating in different locations worldwide, all with their own requirements, making process harmonisation impossible.
Another key challenge to consider was that each department wanted full control over its suppliers, so the new system had to offer sector-level management, along with global authorisation and management.
What solution did BAE Systems choose?
The organisation chose HICX’s platform to establish its ‘single source of truth’ for all supplier information, as well as to act as the starting point for onboarding new suppliers. Following registration, the portal lets suppliers manage and update their own information.
Data that is collected through the system is sent to different groups within the organisation so it can be reviewed and validated. Information that is considered to be ‘global’ is approved by a central group, while supplier compliance and ownership remains with the different sectors.
One of the major benefits of this solution is that, once information has been approved, supplier records are also updated within the relevant ERPs. This allows one ‘golden thread’ of supplier data to be established across the organisation.
What did BAE Systems learn from the project?
By far the most important thing BAE learned from the project was about the value of good supplier master data management (SMDM). When the aerospace and defence organisation realised that it was not doing SMDM well, it became clear that the starting point had to be establishing a supplier data structure. After it had been put in place, they could establish rules regarding the onboarding of good data and how to maintain it in the long-term.
BAE also learned about the importance of process definition. The company needed to define central and local processes, workflows and roles. Without a master data management team in place it would not be possible to complete all processes manually, so system automation was a key consideration because it changed the way the project team could approach setting up new digital processes.
As well as learning about the importance of data quality, the organisation also realised that ongoing success requires you to have the resources needed to support ongoing data changes. Doing what’s required upfront helps you avoid inevitable data issues downstream, and you need the right resources in place to make this a reality.
BAE Systems now has one central data repository in place, where it can find accurate information for its suppliers. Not only does this benefit the company here and now, but it also means that it is excellently-placed to make the most of future opportunities that are presented by advancing technologies, such as AI, robotics and blockchain.
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