SAP MDG – A best practice for Oil & Gas industry

Oil & Gas industry is one of the largest asset-intensive industries in the world. The industry is characterized by heavy investments, complex organizations, tremendous technical challenges, political and work-related risks.

Also, it is witnessed by the deployment of niche talents across the world to extract the scarce resource. The number of stakeholders involved in the upstream, midstream, and downstream sectors are huge. Also, the quantum of data storage, maintenance, exchange, and retrieval with regard to internal and external cost centers, business units are substantial.

SAP MDG – A best practice for Oil & Gas industry

Challenges faced by the Industry

  • Accuracy of Plant Maintenance and work plans,
  • Accuracy of spare parts and material management
  • Accuracy of customer and vendor master database
  • Lack of 360-degree view of Supplier, Customer, and material data
  • No Instant access to integrated reliable data on costs, assets, people & processes
  • Presence of fluid teams who form and dissolve for short term contracts
  • Crowd sourced work designs that engage people with different work metrics
  • Loose hierarchies with decentralized decision making
  • Swift prototyping work methodology
  • Instant feedback system on the projects
  • Aggressive work protocols
Challenges faced by the Industry

One can feel the need to consolidate the data generated from each of the business units & cost centers centrally. And then convert them into holistic, real time information for effective decision making.

Many Oil & Gas industry giants have achieved it and have become agile by mastering both stability as well as dynamism with the help of effective master data governance solutions. Implementation of SAP MDG to the business processes and to the entire master data life cycle can be a game changer and a best practice for Oil & Gas industries.

It is typical for oil & gas companies to resort to Customer, Material & Supplier Masters. It could be on SAP platform or any other third-party ERP to manage their data in hand and generate insights for decision making.

Customer Master

Companies use customer masters to enable them to manage customer data and customer relationships. These attributes are shared across multiple systems, departments and business units. It includes data pertaining to address, terms of payments, captures how business transactions are posted to customers and how the transactions are processed.

Material Master

The material master is being used by companies to manage data on all the materials that a business procures, produces, stores, sells. It is the material storehouse and the company’s central source for retrieving material specific data. Information like the base unit of measurement, weight, purchasing data, accounting data, description of the materials are captured in the master data.

Supplier Master

It is normal in projects to manage data pertaining to its suppliers through vendor masters. The quality of data contained improves the accounts payable process. It includes all relevant information about the goods & services sourced from the suppliers including procurement history, supply categories, inventory data, purchase, contract records and other key information regarding the supplier and the business relations.

But there needs to be a central force coordinating the different masters to provide comprehensive insights to be on the winning side for decision making.

What is SAP MDG_

What is SAP MDG?

It is an extension of business processes in the SAP Business suite to centrally govern the master data. It is an add-on feature with master data hub which provides governance mechanisms to manage various master data centrally.  Once it is installed in the landscape, all the master data governance will be done from the hub system of MDG. From there the data will be circulated to all the connected systems in the landscape.

It is a targeted tool to reduce silos in various master data and allow masters function better with its rich features listed below.

Features of SAP MDG that makes it a best practice for Oil & Gas industry

Integration of Master Data

The feature creates high quality records with key mapping and avoids duplicates. The framework enables to identify, match and merge records to create best records based on intuitive and flexible processes

Integration of Master Data

Mass Processing

The feature allows update of multiple master data at the same time. Bulk changes can be made to Business partner, customer, supplier, and material master data simultaneously

Mass Processing

Centralized Data Governance

Creation, maintenance, and distribution of data through a hub system that extends to diverse systems. The overall cost can be minimized through centralized business processes which consolidates and centrally governs the data

Centralized Data Governance

Standardized Pre-built data models, Workflows and User Interfaces

The workflow allows owners of different masters to add their expertise to the master data. The process is made reliable with appropriate authorizations and facilitates an audit trail by tracking all the approvals and changes made to master data

Standardized Pre-built data models, Workflows and User Interfaces

Benefits of Implementing SAP MDG in Oil & Gas Industry

Benefits of Implementing SAP MDG in Oil & Gas Industry
  • Acts as a roadmap by managing data centrally
  • Avoids duplicates and redundant data across masters
  • Produces high quality master data
  • Induces confidence and transparency through statistics, change indicators and validity checks
  • Reduces overall costs by centrally consolidating and governing data
  • Ensures data consistency, quality, accuracy
  • Saves time by enabling modifications on one set of data rather than on multiple applications
  • Allows multiple collaborators to manage and maintain master data
  • Reliable data with high standards of authorizations for modifications made along with audit trails
  • A feature like SAP MDG BP is a great advantage for organizations dealing with multiple stakeholders. Leveraging the benefits of SAP MDG Business partner becomes a business imperative. And one cannot oversee the benefits that SAP MDG Materials offers in terms of preventing business interruptions due to incorrect or missing material data.

Hence Implementing SAP MDG is certainly one of the best practices especially for oil & gas industries. And it is increasingly becoming a bloodline for many industries in this era of data oriented business governance.

SAP MDG key business benefits for Oil and Gas industries can be best summarized as

  • Cost saving due to centralized procurement
  • Efficient inventory management & avoidance of stock-out of mission critical parts
  • Maintains a single source of truth along with transparency across the organization.
  • Enhances asset availability & management through reduced MTTR
  • Reduce maverick spending through effective check on critical MRO supply chain metrics

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At LMTEQ we enhance the accuracy of SAP Plant Maintenance (PM) plans, Task list and spare parts in Material Management (MM). This is crucial especially for companies from the oil and gas industry who are planning to automate and untangle their plant maintenance operations.