How Itron Optimized Its Data-Gathering Processes and Developed More Effective Part Risk Management

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Industry

Utilities

Company Size

5K-10K

Location

Liberty Lake, Washington

The Background

Headquartered in Liberty Lake, Washington, Itron helps a range of customers—including cities, municipalities and utilities—to better manage energy and water, and achieve greater visibility and control over their resource management and consumption. The organization maintains an integrated, intelligent platform of endpoints (such as sensors, switches and meters) that collect data, control devices and take action in the field. Itron’s communication networks harvest that data and deliver it where it’s needed; and the company’s software and services turn that data into insights. With Itron, customers achieve more efficient operations, ensure system resilience, better engage consumers, keep pace with demand and enhance profitability.

Itron currently operates in over 100 countries, serving upwards of 8,000 cities and utility companies in markets all over the world. Its annual revenue for 2023 was $2.2 billion. In recent years, the firm has also emerged as a leader in the smart city movement, which seeks to equip the world’s largest population centers with smart technology that uses data to guide metropolises toward efficient resource use and sustainable operations.

Challenge

Itron manufactures a wide array of technological devices ranging from meters, sensors and communication modules to grid management tools and streetlight control hardware. Due to the breadth of its products and the scale of its customer base, the organization draws heavily from the electronic component supply chain.

Until mid-2022, Itron was under contract with a well-known parts management software vendor, a partnership that spanned nearly a decade. While the platform had served Itron reasonably well, Itron was looking to streamline the way they analyze their bills of materials (BOMs), gather data on parts, and implement derisking strategies. When the opportunity to find an alternative solution appeared, Megan Thalman—a product lifecycle management manager at Itron responsible for carrying out BOM reviews and managing part risk—saw a valuable opportunity for the company to reassess its relationship with the vendor.

Carrying Out a Comprehensive Strategic Review

Thalman and her colleagues decided to conduct a comprehensive strategic review. The goal was to identify inefficiencies with their vendor and explore whether an alternative solution could deliver better results. “I took charge of understanding, ‘What functionalities do we need?’” Thalman recalled. In order to be as precise and nuanced as possible in defining what they were looking for in a parts management tool, Thalman mapped out her team’s most essential component database requirements and evaluated the software’s performance in those categories.

Issues with Concurrent Users

During what would prove a highly clarifying process, Thalman found several areas for improvement regarding the procurement team’s ability to seamlessly track, manage, and analyze parts. Itron felt that multiple professionals—both within the procurement vertical and across other departments and teams—should be able to access and utilize the parts management system at the same time. “One of our basic requirements was concurrent users,” she said.

Big Limits on Component Information Requests

Another limitation Thalman came across concerned the search quotas that the platform had in place—a maximum number of component information requests that customers could make related to issues like compliance, lifecycle status, and parametric features. “Our AML (Approved Manufacturer List) is fairly large,” Thalman pointed out. As a result, the procurement team drew on the parts database for a lot of data related to those suppliers’ parts. “We were finding that we were meeting our quota with the vendor fairly quickly.”

Too Dependent on Manual Surveying for Part Compliance Info

Finally, Thalman learned that Itron was not able to access product compliance information for its customers with the level of responsiveness that the company believed was crucial to meeting its high standards. Whenever a customer asked whether a specific product was RoHS or REACH [AM1] compliant—to name just two key environmental regulations—the team “would have to do a manual survey every single time,” she said. “It was very time intensive.”

From a broader, 10,000-foot perspective, what Itron was asking for was completely understandable for a $2 billion company specializing in devices and hardware made up of myriad electronic components: as much seamless, unimpeded access to parts and supply chain intelligence as possible. “We wanted the ability to upload BOMs, return component life cycles, environmental compliance, multi-sourcing risks, commodity segments, country of origin,” Thalman pointed out. “Basically, anything that we could get our hands on as far as our supply chain goes and any risk that would associate with our parts and our BOMs.”

What was clear was that the needs of the procurement team, and Itron more generally, all but demanded a tool capable of meeting an extensive, multifaceted set of data requirements. The question that remained unanswered, however, was whether Thalman and her colleagues would be able to identify a substitute detailed and comprehensive enough to meet those lofty requirements.

Solution

By the summer of 2022, Itron’s contract with its parts management vendor was nearing its expiration date. Rather than renewing the deal, the company opted to explore other possibilities.

Around that time, one of Thalman’s colleagues on the Itron procurement team, Ginger Ellis, had held a few conversations with another Itron employee about a different platform, one that appeared to hold promise as an effective alternative: Z2Data. “The timing was good; we were coming up on renewal,” Ellis said. They decided to move forward with a demo. “Let’s do an RFQ and some more discovery of Z2Data,” she recalled thinking at the time.

Scorecard Evaluation: Comparing Z2Data to Itron’s Current Tool

Thalman, Ellis, and the rest of Itron’s procurement team used a free two-week trial to test out Z2Data. Ever the analytical, meticulous professional in her approach to her responsibilities at the tech company, Thalman used the trial period to carry out a scorecard-based comparison between Z2Data and Itron’s incumbent parts management tool. Over what would eventually evolve into a three-week trial, the procurement team asked for an additional week to continue testing the platform’s capabilities. Thalman found herself impressed with the sheer depth of data the software was giving her and her team direct, unfettered access to. “I think what scored high was the amount of supply chain information that we were able to dig into,” she recalled. “The level of insight that it was able to give us was far superior than what we had seen before with our incumbent solution.”

A Major Boost in User Friendliness

In addition to recognizing the depth and expansiveness of Z2Data’s database, Thalman also saw just how quickly her colleagues were taking to the platform’s intuitive interface. “I think everybody who served as the trial users for Z2Data noted how much easier and more user-friendly Z2Data was to manage,” she said. “It was organized in such a way that it was very easy for people to learn it if they just spent a little bit of time working in it.”

“From a Relationship Standpoint, They Blew Me Away”

Although Ellis was not as involved in the trial process as Thalman, she had her own distinctive reasons for growing into an advocate of Z2Data. Whenever she would get on a call with the platform’s customer success team to discuss her experience with the tool and its functionalities, she found the experience “extremely engaging,” she recalled. “From a relationship standpoint, or a service standpoint, they just sort of blew me away.”

By the time Itron’s contract with its previous parts management system was up, the final decision was not a difficult one to make. During the third quarter of 2022, Thalman and her colleagues officially made the transition to Z2Data.

Result

Today, Thalman draws on Z2Data’s suite of tools multiple times a week to carry out her tasks reviewing BOMs and looking for opportunities to derisk specific parts. “I use Z2Data quite a bit, I’d say if not daily, then every other day, with a lot of the work that I do,” she remarked.

The procurement team uses internal documentation to track BOMs and components for all of Itron’s high-revenue products, and Thalman draws on Z2Data’s databases for a wide range of critical information that is ultimately fed into those files. Using the supply chain risk management platform, Thalman pulls out her parts’ country of origin, obsolescence risk, and sourcing, among other critical intelligence. “That’s been really helpful,” she notes. In fact, Z2Data now serves as the chief fulcrum for the procurement team’s information-gathering processes. Only after extracting as much data as the professionals can find from the tool will they turn to Itron’s global commodity managers (GCMs) to reach out to suppliers and obtain the rest manually.

Despite the obvious challenges inextricably tied to transitioning multiple teams to a new parts management system, Thalman actually found the entire process of moving to Z2Data fulfilling and memorable. “Honestly, it was a wonderful experience, at least for me, leading everybody on board,” she remarked.