Terumo, a medical device company and part of the Terumo Group faced data challenges that impeded their progress and success on the way to reaching business objectives. In collaboration with Alluvion, they embarked on a journey towards reliable master data almost ten years ago. Here is a summary of their journey.

Terumo as organization

The Organization Terumo EMEA, headquartered in Leuven, was founded in 1971, 50 years after Terumo Japan's establishment. Terumo EMEA has over 1400 employees, a revenue of more than €700 million in FY21, and three manufacturing sites, 22 sales offices, and activities in more than 50 countries in the EMEA region.

The company's sales and marketing activities are split into five business units, offering a range of products, from safety needles and blood glucose meters to guidewires used for the diagnosis and treatment of coronary artery disease.

Situation Before

Before embarking on its journey towards reliable master data, Terumo faced several challenges that were impacting its business processes and operations. These challenges included:

Inconsistent and unreliable master data:

  • Product name variations: Different departments or regions used different naming conventions for the same product, leading to confusion and difficulties in tracking inventory and sales accurately.
  • Inaccurate customer information: Customer records were not standardized, causing discrepancies in contact details, addresses, or account information, leading to difficulties in effective customer communication and service. 

Master data duplication:

  • Duplicate customer records: Multiple systems or databases stored customer information independently, resulting in duplicate entries for the same customer, leading to inefficiencies in managing customer relationships and inaccurate sales reporting.
  • Redundant product data: Similar products were created multiple times in different systems, resulting in redundant data and inconsistencies in pricing, inventory management, and procurement.

Reactive approach to master data management:

  • Data quality issues discovered after the fact: Errors or inconsistencies in master data were often identified during reporting or operational processes, causing delays in decision-making and requiring time-consuming efforts to rectify the data issues.
  • Manual data corrections: Data errors were manually fixed after they were discovered, leading to a time-consuming and labor-intensive process that could have been avoided with proactive data management.

Lack of governance and ownership:

  • Data ownership ambiguity: Without clear ownership, there was confusion about who was responsible for maintaining and updating master data, resulting in inconsistent practices and data quality issues.
  • Lack of data management policies and guidelines: The absence of a governance framework made it challenging to establish data management policies, guidelines, and standardized processes, leading to ad-hoc data management practices and data inconsistencies.

Master Data Management is a continuous process and not a 'one-off.' So, the master data improvement journey will always continue to accomplish business objectives.

~ Niels De Greef

The 5-Step Plan

1. FIRST TIME RIGHT

The start of our expedition, our first real climb or challenge, was focused on eliminating reactive MDM and tackling master data issues at the point of entry, focusing on first-time-right data entry. They moved from an Excel-based solution on SharePoint towards SAP Master Data Governance.

The key to success was challenging the current way of working and capturing the business objectives. To ensure first-time-right data entry, Terumo defined SAP MDG as the single source of truth and central point of integration, eliminating duplicate master data in the system landscape.
They involved the right people at the right time by defining governance flows steered by "sensitive" or "important" fields and implemented Data Validations and Derivations that define data quality.
Like in climbing, we gently made our way up, by introducing additions in an agile way.

This resulted in:

  • Governing our material maintenance processes.
  • Followed by co-development with Alluvion on parts of their SAP MDG add-on, called the Alluvion MDG Productivity Pack.
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2. BUILDING A CLOUD-ORIENTED, FUTURE-PROOF SAP S/4HANA SOLUTION

While making progress towards your goal, you should also take time to appreciate the journey. One way to do this is by prioritizing low-hanging fruit or quick wins such as introducing Fiori applications or enjoying the new Fiori look and feel for older applications.

Additionally, enabling the HANA search feature can improve error-tolerant search results and duplicate detection. This is also a good opportunity to revert the custom coding that has become standard.

Building your master data organization slowly may seem counterintuitive but can help ease the transition and avoid overwhelming your business users. By breaking down the upgrade into smaller pieces and allowing users time to get accustomed to the changes, you can ensure a smoother transition to S/4HANA.

 

3. STANDARDIZING DATA AND ELIMINATING DUPLICATES

Terumo's third step focused on standardizing data and eliminating duplicates, increasing data quality, and reducing data maintenance costs. They achieved this by consolidating their disparate data sources, standardizing data definitions, and implementing a data model.

As climbers must overcome challenges during their climb, we had to and will have to overcome data challenges along our journey since the business objectives and requirements are in constant movement.
That’s why the newest S/4HANA features were activated during the Terumo BeaCON TRANSFORM project, with two main focus areas:

  • ‘Make and keep data clean’
    Introducing the Consolidation and Mass Processing tools to consolidate, standardize, deduplicate and cleanse.
  • ‘Monitor and Act’
    Focusing on gaining insight into the data, its value definition and the processes maintaining that data. By leveraging AI, rule mining is analyzing master data patterns in your system to propose new relevant business rules. Besides just insight, these MDG tools also allow us to take necessary actions to follow up on the gained insights.
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4. TREATING THE COMPLEXITY OF MULTIPLE SYSTEMS BY FEDERATION 

After the first three steps, it’s a good time to look back at the effort and great accomplishments we had already made. However, it’s no option to keep standing still, since your business and its requirements is in constant movement.

Terumo is therefore reviewing and designing their master data integration architecture in a heterogeneous system landscape; Salesforce (of which master data is fueled from S/4HANA, not from MDG) is active and SAP Concur is on the roadmap with probably even more systems or applications to come.

The idea is to align here with the vision of SAP over time:

  • SAP MDG to govern the master data management
  • SAP Master Data Integration (being an SAP BTP service) is the tool for governing master data integration

SAP MDI is not only an integration tool, but it acts like a control tower at an airport to orchestrate the data between various systems until a complete and accurate master data record exists.

This teamwork to maintain a complete and accurate master data record between all of the different systems via SAP MDI is what we call federation.

Sap

5. NEXT-LEVEL AUTOMATION WITH EXTERNAL DATA 

Currently, Terumo uses a manual report to check for erroneous tax data in their Business Partners by using the VAT number validation service of the European Commission, called VIES.

Manually fixing data issues afterwards potentially cause issues. Correcting data also requires manual effort from your business users, which is an action that can be avoided.
The next climb could be to increase the level of automation by using the wide range of external data providers that are available. For example address validation, bank accounts, credit scoring of a Business Partner, and so on…

These can be integrated into your SAP MDG maintenance processes at the point of entry.
And additionally, the 
Alluvion MDG Productivity Pack can eliminate the integration effort and make sure that the results remain available for audits and compliance.

But… wouldn’t it be even better to receive updates if changes have been made?

At Alluvion, we’re currently investigating the possibilities of pro-active maintenance, built on the SAP BTP platform. 

The goal is to eliminate the integration efforts for our customers to various data providers and proactively offer the latest version of the truth.

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Conclusion and Key Takeaways

Terumo's journey towards a reliable master data quality summit took ten years and was similar to a mountain expedition, requiring preparation, resources, and a well-planned approach.

It has been an amazing journey so far in which crucial steps were taken towards higher Master Data Quality.
We would like to provide you once again with an overview of the key takeaways from the Terumo journey:

  • Choose the S/4HANA way since it will lay the cloud-oriented and future-proof foundation for current and future initiatives and make use of the benefits and features that the new foundation brings to the table.
  • Align with SAP’s vision on Master Data Management and Integration, which paves the way for federation.
  • You can achieve next-level automation by embedding external data providers into your processes. In other words, receiving Data Quality as a Service.
  • Master Data Management is a continuous process and not a “one-off”. So, the master data improvement journey will always continue to accomplish business objectives.
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The future is looking bright for Terumo, and we are sure that your organization can accomplish the same, with the right expertise and guidance.

And we would be more than happy to be your guide!

As Alluvion we want to thank Terumo for the amazing climb so far. We can look back on many master data challenges that we have overcome together.

Terumosvg

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Avelon C Karen Van Der Biest 138
Written by

Niels De Greef

SAP Master Data Architect & Teamlead

Certified SAP Master Data Solution Architect and Teamlead with expertise in MDG, EIM, and a track record of delivering high-quality, scalable, efficient and future-proof solutions.

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