Master data is a crucial element that is the life of various elements of a business such as products, raw materials, vendors and so on. It therefore becomes critical to manage it well. OK, the two statements above will surely get nominated for the ‘Understatement of the Year’. However, the fact remains that many organizations still do not have a well-defined master data strategy, especially in the case of material master data.
Just to illustrate, let’s consider the production chain. It begins with the procurement team rooting for the best vendor to get the supplies from. The supplies then move to the production and manufacturing departments where the actual conversion and production of goods begin. No one can deny that this is a critical process and in order for it to run smoothly, it needs to be backed by data elements such as the raw material costs, vendor and supplier details, plant locations, market statistics, down time information and so on.
Systems often fail because of untimely, inaccurate and outdated data, generally material master data. When the business expands, a lot more data comes into play. However, improper master data management can lead to issues such as inconsistent data, duplicated records, and so on. So how best can this be avoided? By first identifying the loopholes in the master data. This can be gauged by analyzing the master data lifecycle.
Right from the time any data comes into existence, it goes through many stages wherein it is used, modified, edited and added to, by several resources and departments across locations. This is especially true in the case of item master data. When uniform data standards are not in place, the issues that crop up with the master data begin right from the data creation stage. What’s worse is that it persists throughout the later stage as well, thereby spreading unreliable data across business.
This unreliable data can further go on getting replicated in various other systems accessing the master data. This unreliable information spreads through all the systems that depend on it, thereby bringing down the systems performance and value delivery. Systems that take the maximum hit include the supply chain, inventory, and finance and so on, resulting in losses that arise out of down time, additional plant and machinery, demand-supply disparities etc. which eventually affects the main motive of your business-Profits!
What all this means is that proper item master data management should be a priority for you and your organization to ensure that unreliable data does not negatively affect the efforts of your employees.
Blog: Leveraging Item masters in Procurement
Blog: Material (Item) Master Data’s impact on Procurement Organizations
Case Study: Process Improvement for a Large Agricultural Nutrient Provider
Latest posts by Jessica Banks (see all)
- Data cleansing- what it does for your business - February 5, 2015
- Tips and strategies for enterprise data management processes - September 12, 2014
- Master Data Governance is Re-shaping the Enterprises - August 22, 2014