Courtesy of APGC

Many organizations have multiple software systems supporting their supply chains. Warehouse management systems, ERP systems, and other software used for procurement, inventory, and transportation processes can have conflicting data.

The isolation of these different software systems can lead to confusion within the enterprise, as different areas wonder whose data is "right." A far more serious result is that an organization can have an incomplete picture of its inventory, which can then lead to overpurchasing, stockouts, and disruption in manufacturing operations. For procurement, inconsistent data can lead to higher order fulfillment times and increased transaction processing costs. Organizations using the services of third-party logistics providers (3PLs) can see even more confusion if the 3PLs have completely data from the organizations.

One solution to data inconsistency is material master data management, or the standardization and centralization of data into a uniform set. Adopting material master data management means that the entire enterprise gets a single view of supply chain data. This can lead to more efficient manufacturing operations, better inventory management, and reduced cycle times, which all translate into reduced cost. The material master data set can be used by various applications across the enterprise, including those for purchasing, inventory management, and materials planning.

There are challenges to adopting material master data management. For a large company, supply chain data can be dispersed in different business units located in different geographical areas. Available data may have poor descriptions or inconsistent naming conventions. Moreover, organizations will need to establish ownership of the master data and processes for data creation.

Has your organization adopted material master data management? What challenges did you encounter? What benefits have resulted from it?