The energy sector is the lifeblood of our modern world. Powering cities, driving industries, and fueling our daily lives. But behind the scenes there exists, in nearly every organization, a battle against a mess of inconsistent material data. This is the challenge that many energy companies face when managing their essential materials.

Our story begins with a mid-sized energy company, a vital player in keeping the lights on and the energy flowing. Like so many in their industry, they were grappling with an ever-growing crisis. Their material data was a mess, and it was only getting worse. The ‘Cost of Business’ annual write-off keeps getting larger. Information critical to their operations was scattered, inconsistent, and often downright wrong. Their maintenance teams, relying on the ERP system to keep their equipment running, were constantly frustrated by their inability to quickly locate the right parts. Procurement specialists, working within the SCM environment, faced similar headaches, struggling to reconcile conflicting data from a multitude of suppliers.

Think about the everyday chaos this conflicting data created:

During routine maintenance, a critical piping system needs a short piece of pipe to be replaced. The maintenance crew dives into the SCM system, searching for the replacement pipe required. Unfortunately, lack of standardized data prevents traceability from Engineering (Drawings and Material Specifications) to Purchasing to Receiving and Inventory. Ultimately the wrong pipe is installed resulting in a catastrophic fire. This disaster caused 10’s of millions in damages and downtime.

A procurement manager tries to order a specific component. Supplier A calls it one thing, Supplier B another, and their internal systems use yet another term. The risk of ordering the wrong part looms large, threatening delays and cost overruns.

This wasn’t just an IT problem; it was a business problem with real-world consequences. It was slowing down operations, driving up costs, and hindering their ability to adapt and thrive. The company knew they needed a solution, a way to bring order to the chaos and unlock the true value of their data. The vendors and suppliers are more than happy to keep the problem going as it means more orders and more hours for them.

 

The Quest for Clarity: A Phased Transformation

The energy company embarked on a journey to transform their material management, adopting a phased approach to implement the powerful Energy Edge AI solution. This wasn’t just about leveraging new software; it was about fundamentally changing how they managed their information.

 

Phase 1: Laying the Foundation for Intelligent Data

The first phase is always crucial, making the plans and setting the stage for a company-wide transformation. It involved a proof of concept and a carefully designed pilot project, focusing on a specific business unit and a selection of essential materials.

Here’s what this phase looked like:

• Proof of Concept (POC): This initial stage demonstrated the raw power of the solution. It showed that the platform could effectively process the company’s existing data, regardless of its original format.
  
  
• Pilot Project with a Twist: Establishing Internal Standards: The pilot project went further, focusing on a larger scale and a wider range of materials. But crucially, it incorporated the energy company’s own commodity coding system. The Energy Edge tools were configured to use their standards, ensuring that the solution would speak their language. This step was vital for long-term success and company-wide adoption.
  
  

What did this early stage reveal?

• Data Flexibility: The platform proved it could handle data from various sources, adapting to the company’s existing systems and workflows.
  
  
• Standardization Power: The solution effectively standardized material descriptions and coding, eliminating inconsistencies and creating a unified data view.
  
  
• Improved Efficiency: Even in this limited scope, the solution demonstrated its ability to streamline material searches and improve operational efficiency.

 

Phase 2: Company-Wide Rollout and the Promise of Transformation

Energized by the success of the pilot, the energy company is now poised for a company-wide implementation of Energy Edge AI, planned throughout 2025. This is where the real transformation takes hold, promising to reshape their operations from the ground up.

This ambitious undertaking involves:

• Full-Scale Integration: The solution will be deployed across the entire company, connecting all relevant departments and systems. It is important to clarify here: rather than directly “connecting to” or “writing to” the SCM and ERP databases, the solution processes the data provided by those systems, ensuring that the cleaned and standardized data can be used effectively within them.
  
  
• Data Transformation: Existing material data will be processed and transformed to align with the company’s established standards, ensuring accuracy and consistency on a massive scale.
  
  
• Empowering the Workforce: With everyone talking the same coding and language for materials, the workforce speaks another common language and enforcing the company’s strong commitment to excellence.
  
  
• Continuous Improvement and Adaptation: The company is committed to ongoing monitoring and refinement of the solution, ensuring it remains aligned with their evolving needs and continues to deliver maximum value.
  
  

A higher-level look into the history of the problem and why the Energy Edge AI materials model application is so valuable to the Energy industry.

Think about building a massive structure, like a refinery or a power plant. You need thousands, even millions, of individual parts – everything from nuts and bolts to specialized valves and complex electronic components. These parts come from hundreds, sometimes thousands, of different companies, each with their own way of describing and labeling their products. It’s like trying to build a house when every bundle of wood, every box of nails, every spool of wire has a different name and measurement system. Sounds chaotic, right?

This is the reality for many companies in the energy industry when it comes to managing their materials. For decades, a fundamental challenge has plagued the sector: data integrity. This fancy term simply means making sure the information they have about their materials is accurate, consistent, and easy to understand. Without it, things can go wrong – and they often do, costing the industry untold millions of dollars every year.

Imagine a scenario where a crucial valve needs replacing at a power station. The maintenance team searches their inventory system, but the valve they need might be listed under five different names by five different suppliers. Maybe one calls it a “high-pressure control valve,” another a “flow regulation unit,” and yet another uses a cryptic internal code. This confusion can lead to:

• Wasted Time: Engineers and maintenance crews spend countless hours trying to decipher inconsistent data, track down the right parts, and verify specifications. This wasted time could be spent on actual maintenance and improvement work.
  
  
• Mislabeled Inventory: As a former quality control manager at Honda famously stated over two decades ago, “Seventy percent of the problems that affect the production lines are a result of label errors… if parts in inventory or in a process are mislabeled, they are basically lost.” This quote, though from the automotive industry, resonates deeply within the energy sector. Imagine a critical component being mislabeled in a vast warehouse – it becomes effectively invisible when needed most.
  
  
• Incorrect Ordering: When data is inconsistent, ordering the correct replacement parts becomes a gamble. This can lead to ordering the wrong items, causing delays, and further impacting operations.
  
  
• Lost or Underutilized Inventory: Millions of dollars can be tied up in inventory that isn’t properly cataloged. Companies might unknowingly have the part they need sitting on a shelf, but because of poor data, they end up ordering a new one, wasting money and space.
  
  
• Compromised Budgets: Whether it’s Capital Expenditure (CapEx) for new projects or Operational Expenditure (OpEx) for maintenance, “bad data” bleeds into every aspect of the budget. Inefficient processes, incorrect purchases, and project delays all inflate costs.
  
  

The inability to effectively manage material data has long been recognized as a major drain on resources in the energy industry. Experts estimate that the effects of “bad data” regularly compromise CapEx, OpEx, and infrastructural budgets by a significant margin – often in the range of 5-10%. Think about that: for every million dollars spent, up to $100,000 could be wasted due to problems stemming from poor data management. That’s a staggering amount of money!

 

The Long Quest for Order: A History of the Challenge

The need for a unified system to manage material data isn’t a new revelation. Back in 1993, the Construction Industry Institute (CII) – a respected research organization – formed an Electronic Data Management Task Force. Their mission? To tackle this very problem and explore the possibility of “Common Commodity Codes.”

In their executive summary, the Task Force highlighted the industry’s long-standing desire for a standardized way to share material requirements. They recognized that the ability for different organizations – owners, engineers, contractors, and suppliers – with different computer systems to easily exchange material management and other crucial data was essential for the growth of electronic data transfer.

The potential benefits they envisioned were significant: automated transfer and integration of data for common materials, leading to greater efficiency and accuracy across the entire supply chain. However, the Task Force also acknowledged a major hurdle: “achieving such a standard would require considerable time and effort.”

Fast forward three decades to today. While technology has advanced in leaps and bounds, the fundamental challenge of inconsistent material data persists in the energy industry. In many ways, the problem has become even more complex due to the sheer explosion of data over the past few decades. The number of vendors, the variety of materials, and the volume of transactions have increased exponentially, making the task of managing this information even more daunting.

Numerous attempts have been made to address this issue, both at an industry-wide level and within individual companies. Standards organizations have proposed coding systems, and multiple systems have been implemented to mixed and typically incomplete results. Yet, the reality on the ground often remains the same: the ubiquitous spreadsheet, with all its inherent limitations in terms of scalability, consistency, and error-checking, continues to be a primary tool for managing critical material data.

Why has it been so difficult to achieve a lasting solution? The “time and effort” factor identified by the CII Task Force three decades ago remains a significant barrier. Implementing a standardized coding system across a large organization with numerous vendors is a monumental undertaking. It requires:

• Manual Data Cleansing: Countless hours spent manually reviewing and correcting inconsistent data.
  
  
• Vendor Collaboration: Getting hundreds of different suppliers to adopt a new coding system or change their internal processes.
  
  
• System Integration: Ensuring that a new standard can be effectively integrated with existing legacy systems.
  
  
• Ongoing Maintenance: Continuously monitoring and updating the data to maintain accuracy and consistency.
  
  

These challenges often push data standardization projects down the list of priorities, overshadowed by more immediate operational concerns.

 

The Revolutionary Solution: Energy Edge and Intelligent Standardization

Now, imagine a different approach – one that bypasses the need for massive manual effort and doesn’t require all your suppliers to change their ways. This is where the revolutionary Energy Edge service comes in.

Manual Data Cleansing becomes Automatic Data Categorization – As soon as material data is identified it is coded and categorized to the corporate standard.
Vendor Collaboration becomes irrelevant, keep sending exactly what you have been sending – Energy Edge AI standardizes at your gates regardless of what material data they send.
System Integration becomes irrelevant, the Energy Edge API can be consumed where it makes sense to you and works for any of your systems – providing clean data.
Ongoing Maintenance becomes trivial, with a robust administrative console material changes and tweaks to the model happen very quickly; as change inevitably encroaches the Energy Edge Model stays agile and up to date.

Energy Edge utilizes the power of cutting-edge Artificial Intelligence (AI) and Machine Learning (ML) to tackle the problem of material data inconsistency head-on. Our service offers a fundamentally different way to achieve data integrity across your entire supply chain – without asking for anything different from your suppliers.

Think of Energy Edge as an intelligent translator for your material data. It can understand the diverse “languages” used by your various vendors and automatically align all your materials to a standard coding structure that is perfectly suited for your Maintenance, Repair, and Operations (MRO), Operational Expenditure (OpEx), and Capital Expenditure (CapEx) workflows.

Here’s how it works in simple terms:

• Effortless Data Input: You don’t need to overhaul your existing systems or force your suppliers to adopt new formats. Energy Edge can ingest your material data from virtually any source – spreadsheets, existing databases, procurement systems, engineering documents, and more.
  
  
• Automatic Standardization: Based on its intelligent analysis, Energy Edge automatically assigns a standardized code to each material, aligning it with a clear and consistent structure that makes sense for your business needs. This happens in real-time, without the need for manual intervention.
  
  
• Data Enrichment: Energy Edge doesn’t just standardize codes; it can also enrich your data by adding missing information, correcting errors, and providing valuable insights into material properties and usage.
  
  
• Seamless Integration: The standardized and enriched data can then be seamlessly integrated with your existing internal systems, empowering your teams with accurate and reliable information.
  
  

 

The Game-Changer: Eliminating the Time and Effort Barrier

One of the most exciting aspects of Energy Edge is that it has effectively eliminated 99% of the time and effort traditionally required to achieve material data standardization. Remember the “considerable time and effort” that the CII Task Force identified as a major obstacle? Energy Edge bypasses this hurdle through the power of automation.

More importantly, Energy Edge provides a permanent solution to the problem. Once our AI is processing your material data, it will be automatically aligned and useful for all stakeholders – now and in the future. You no longer need to undertake periodic data cleansing projects or worry about new inconsistencies creeping into your system. Energy Edge continuously learns and adapts, ensuring that your data remains clean and standardized over time.

 

A Ripple Effect of Benefits Across Your Organization

The implementation of Energy Edge doesn’t just solve a data problem; it triggers a cascade of positive benefits that empower your team and significantly impact your bottom line:

• Empowered Business and Elimination of Bad Data: By providing your teams with access to accurate and standardized material data, Energy Edge empowers them to make better decisions, work more efficiently, and have greater confidence in their information. The pervasive issues caused by “bad data” become a thing of the past.
  
  
• Permanent Solution Integrated with Any Infrastructure: Energy Edge offers a lasting solution that can be seamlessly integrated with your existing IT infrastructure. It’s designed to work with your current systems, minimizing disruption and maximizing compatibility.
  
  
• Data Organized for Inherent Process-Level Management: Energy Edge organizes and catalogs your data in a way that reflects your inherent business processes. This allows for more effective management of materials at every stage of their lifecycle, from procurement to disposal.
  
  
• Commodity Codes: The Foundation of Data Integrity: Commodity codes are the fundamental building blocks of a robust material management process. By establishing a standardized coding system, Energy Edge ensures data integrity across multiple departments, systems, and stakeholders.
  
  
• Improved Delivery and Supply Chain Efficiency: With clear and consistent data, you gain unprecedented visibility into your inventories and potential surpluses. This enables more efficient delivery processes, better forecasting, and a more streamlined supply chain. You can track materials effectively, reducing delays and optimizing resource allocation.
  
  
• Enforced Standards and Improved Quality: Using standard codes and specifications enforces consistent standards across your organization. This leads to improved overall quality of work, enhanced reliability of information, and reduced errors.
  
  
• Compounded Savings for the Future: The savings generated by Energy Edge are not just a one-time benefit. As all future material data is automatically conformed to your corporate standard, the positive impact and cost reductions will continue to compound over time.
  
  
• Versatile Neural Network Applicable to All Data Sources: The powerful neural network at the heart of Energy Edge is not limited to material data in the energy industry. Its capabilities can be applied to any data source that requires intelligent coding and categorization, bringing the potential for similar benefits to organizations across various industries.
  

 

The Energy Edge Advantage: Key Benefits at a Glance

Implementing a commodity coding solution with Energy Edge, built upon a sophisticated materials model, offers a clear and compelling set of advantages:

• Easy Path to Standardization:
  
  
  • Provides a pre-built standard model based on extensive industry experience and best practices.
    
    
  • Offers the flexibility to create custom models tailored to your organization’s unique and specialized requirements.
    
    
• Instant Data Harmonization:
  
  
  • Leverages cutting-edge neural network technology to intelligently codify and standardize your material data in real-time.
    
    
  • Works seamlessly across multiple data sources and is completely database-agnostic, meaning it can connect to and process data from any system you use.
    
    
• Inherent Efficiency Improvements:
  
  
  • Empowers your organization to perform common material management tasks more effectively and with greater accuracy.
    
    
  • Enables the easy application of practical AI-powered insights across your entire organization, driving further efficiencies and improvements.
    
    
• Solid Security and Privacy:
  
  
  • Operates on a fully encrypted public API cloud service, ensuring the security of your data during processing.
    
    
  • Does not store your sensitive data; it only transforms and returns the enriched, coded information, providing a high level of privacy and security.
    
    

“Seventy percent of the problems that affect the production lines are a result of label errors…….. if parts in inventory or in a process are mislabeled, they are basically lost.”
– Powered By Honda, circa 1998

 

Unlock a Trifecta of Benefits with Energy Edge:

• Reduce Costs: Eliminate waste, optimize procurement, and minimize downtime.
  
  
• Boost Efficiency: Streamline processes, empower your teams, and improve decision-making.
  
  
• Ensure Accuracy: Gain confidence in your data and eliminate the risks associated with inconsistencies.
  
  

“The industry has long sought a set of common commodity codes that organizations could use to share materials requirements in a standard form… achieving such a standard would require considerable time and effort.”
– CII Electronic Data Management Task Force, 1993

By embracing Energy Edge, you’re not just adopting a new technology; you’re investing in a future where your material data is a powerful asset, driving efficiency, reducing costs, and empowering your organization to operate with greater clarity and confidence. Say goodbye to the chaos of inconsistent data and hello to the intelligent standardization of Energy Edge. Empower your business and eliminate bad data with AI and machine learning today!