Prior to the pandemic, the supply chain was more of a back-burner issue for product-based organizations and enterprises. Of course, business leaders and decision-makers were certainly cognizant of it, but it was not their primary concern. Leaders and managers had larger issues to attend to, from cash flow, to filling open positions, to ensuring customer satisfaction.
Fast forward to today. The supply chain has made its way to the forefront – and not just for franchises and multinational corporations. As a poll from the National Federation of Independent Businesses reveals, nearly one in five small business owners points to the stability of their supply chain as their primary concern, topped only by the ongoing labor shortage and rising inflation. Since disruptions are currently the norm for virtually every industry, organizations across the globe have witnessed first-hand just how reliant they are on the stability of their supply chains. Now, more than ever, they are concerned with what can happen when a single link in the chain comes apart, be it factory closures, unloaded shipping containers at ports, shortages of raw materials, or numerous other manifestations of a broken supply chain. Many organizations try to address their concerns through the use of AI/ML and IoT, but there are some challenges associated with the data these technologies rely on to improve supply chain efficiencies. While some of these concerns originate externally, there are also internal challenges in related to the supply chain that are the direct result of poor data quality.
If only there were a way to future-proof one’s supply chain to avoid getting burned by inevitable supply chain disruption. With master data management, or MDM, there is. We will explain why master data management, paired with an MDM tool, helps ensure your supply chain only bends when it is stretched to the limit, but never breaks. In short, it is the key ingredient to supply chain resilience and performance.
What is master data management?
Master data management is a business process that involves organizations teaming up with IT to integrate and align an enterprise’s master data. This includes creating a single master record for each person, place, or thing in an organization, including data from internal and external sources and applications. There are a variety of ways to ensure the uniformity, accuracy, and consistency of a company’s data, from leveraging master data management software (i.e., an MDM solution) to establishing a data steward to assist with data governance by identifying the owners of various aspects of master data. One of the key imperatives to achieving these goals is the creation of a data dictionary. The process that is utilized largely depends on the type of enterprise data that is being collected and the purpose of the data, be it reference data, customer data, key performance indicators, or some other data source or data product.
More than anything else though, effective master data management centralizes information, providing a single source of truth to the people and organizations who are using it. Working together as data stewards, those overseeing the data can help ensure semantic consistency, especially when enterprise data comes from multiple systems or silos. Since data helps leaders make smarter business decisions, master data management facilitated through an MDM system ensures that those decisions are drawn from accurate observations and intelligence.
What is master data specifically?
As its title suggests, master data refers to data that is truly essential to the operation of the business. Without this data, a business would not be able to operate as effectively or would lack the proper context to make important decisions about what is produced, how the business is run, to whom the business sells (i.e., the customer), and where actions take place.
There are also different types of master data. While the type can vary depending on the industry, they can be broken down into four categories:
- Parties: Organizations (e.g., vendors, suppliers) as well as individuals (e.g., customers, buyers, employees).
- Products: The merchandise that is manufactured and sold as well as the commodities needed to make end-user products.
- Financial structures: The assets or capital that are needed or leveraged during production (e.g., accounts, equipment, documents, currency).
- Location: Where products are made and merchandise is sold.
Master data unifies and coordinates this information across the entirety of a business and between organizations if more than one party is required to produce something that is in demand.
Benefits of MDM
What are the core benefits of master data management and how do they relate to the supply chain?
Single source of truth
Digital transformation has led to an explosion of data, both in the type of data and where it originates. The incredible amount of data makes it impossible to fully dissect, analyze, and organize. With an MDM solution in place, data is assessed, gaps are identified, and then consolidated, validated, and cleansed so information related to the supply chain is both accessible and understandable. This is a result of better data quality. Data governance puts a continual emphasis on data quality by establishing the processes around the creation, modification, and termination/deactivation of a master data element.
Enhanced visibility
Because so much data comes from multiple sources and is often stored on different systems, it can easily fall through the cracks. This is the case for organizations with multiple departments that are siloed from one another. An MDM solution binds them all by serving as a communication bridge, enabling users to see the big picture. Transparency across the organization drives better outcomes by recognizing the potential for problems before they occur and by addressing sticking points as they happen, rather than long after the fact.
Improved collaboration
From hot tubs to video gaming consoles, end-user products are composed of thousands of parts and components, often sourced from all over the world. Lacking visibility into supply issues may create ripple effects that reverberate all the way to the end user. Master data management improves collaboration by facilitating the flow of information to the relevant parties regarding bottlenecks or departmental dilemmas, whether internally or externally. Data synchronization fosters understanding so there are no surprises when complications arise.
Optimized inventory
From the customer’s perspective, the question is not so much if they will receive their merchandise, but how quickly, as numerous organizations now promise packages by a certain date. An organization’s ability to meet promise dates hinges on the effectiveness of its inventory management, a key business process. Reference data and inventory monitoring provide teams with instantaneous insight into inventory, which allows businesses to better determine when order fulfillment will be completed. An MDM solution can also assist with traditional warehousing activities that are involved with inventory, such as picking and packing, assembly, shipment, and more.
Customer satisfaction
Today’s consumers do not base their satisfaction solely on the quality of the products they purchase; they base it on the entire experience, starting with the moment they begin to research or buy an item. Master data management software not only helps to improve production processes via better collaboration, visibility, and data quality, it can help businesses more fully evaluate customer data, enabling them to gain deeper insight into what their customers care about the most before, during, and after the sale.
With over 15 years of MDM implementation and system integration experience, Inspirage has the master data management knowledge and data integration capabilities to provide your business with that single source of truth you need to power your business and make the right decisions. For more information on our Enterprise Data Management solutions, contact us today.
