DSM drives spending analysis, commodity coding with SAS

DSM creates innovative products and services in life and materials sciences. DSM's products are used globally in a wide range of markets and applications, supporting a healthier, more sustainable and enjoyable way of living. DSM is committed to continuously providing outstanding products and services for human and animal well-being.

With its worldwide reach and extensive manufacturing operations, DSM found itself with a real need to improve and more effectively manage the amount it was spending on direct and indirect items. Any gain in efficiency could deliver a significant return on investment — and improve profitability.

The challenge

DSM was seeking a solution that could uncover and fix general data quality issues, as well as help the company manage data specific to its industry and operations. To support its manufacturing processes, DSM manages extensive product, inventory and item data. As a result, spending reporting and analysis were critical needs within the organization. However, DSM found that it had no enterprisewide system for spending categorization — and frequently not even spending categorization at the business-unit level. DSM sought to assign expenditures to defined spending categories for reporting and analysis purposes.

To better manage this process, DSM needed a solution that would allow for coding to eCl@ss, the international standard for the description and classification of products and services. The solution had to be seamlessly integrated into DSM's existing SAP SRM systems in real time through a service-oriented architecture (SOA).

"Worldwide, there were a thousand people raising purchase orders, and we were asking them to make consistent judgments about which of the 27,500 codes was applicable to every order," says Joachim Beurskens, Global Data Manager of Purchasing for DSM. The company saw that automating the assignment of classification codes would eliminate the inevitable errors from assigning these codes manually. Ultimately, the company sought to use the improved data for more accurate direct and indirect spending analysis. To achieve these goals, DSM turned to SAS.

The solution

The company selected SAS to give DSM's business users an intuitive interface to find problems and develop rules to fix these errors. Once these rules were complete, the technology offered the ability to integrate these business rules seamlessly within DSM's existing SAP systems.

For eCl@ss commodity coding, SAS offered an intelligent, automated matching system that could analyze DSM's existing data and correctly assign eCl@ss codes based upon the available data. The patented matching technology drove the eCl@ss classification, automating what would have otherwise been an extensive and time-consuming manual effort.

For easy ongoing maintenance, SAS used a code matching list based upon a continually updated industry-standard eCl@ss list. As new items were added to the SAP system, the staff could quickly update these items with eCl@ss codes, continuing the process of organizing spending data over time.

The results

SAS provided DSM with reliable and consistent data — and enriched that data with industry-standard eCl@ss codes. The SOA-enabled approach allowed the data quality processes to be reused across systems and architectures. This enhanced data quality enabled DSM to adhere to its data governance strategy, leading to measurable results and more efficient achievement of business goals.

"Users enter the text for the item they want to buy, along with any item codes that they have, and a screen pops up saying: 'Here are the top five recommended eCl@ss codes based on what you've typed.' It looks exactly like the normal purchase order process, but behind the scenes it is matching the text against hundreds of thousands of keywords in several languages, and generating eCl@ss codes," Beurskens explains.