Four Steps to Effective Material Master Data Management in Production

Why does good master data management require digitization and what advantages does high data quality have, especially for manufacturing companies?

There is tremendous potential for digitization in the production processes of manufacturing companies. But it often fails in the initial stages due to poorly maintained master data. Why is good master data management a prerequisite for digitization, and what are the advantages of high data quality, especially for manufacturing companies?

Master data: at the very top of the agenda

A year ago, Lünendonk determined that out of 155 managers and data controllers surveyed 58 percent classified the master data quality in their own company as fair to poor. According to a current study by BARC, the subject of master data management is now the top priority in company strategy. The importance of sanitized master data in companies appears to have reached the executive suites. Trust in correct master data is indispensible for the development of a data-controlled company. But if the data are not consistent and lack control mechanisms which ensure smooth data maintenance, the analytical systems and thus the decision making in the company are in question.

These four steps ensure good data quality

1. Embedding in the company strategy

Like the red blood cells in the human organism, master data form the foundation of the company. They are part of the entire value chain. If you want to improve your data quality, making minor adjustments is not enough. Rather you should consider the entire subject in its entirety and for the long term.

2. Single source of truth (SSOT)

The single source of truth describes a universal database in the company. If there is no overview, and employees from various departments maintain the data differently, there may, for example, be duplications. The master data will not be reliable and may be out-of-date.

3. Data governance in the Company

Data governance ensures that master data in the company are checked for availability, integrity and security, that data management is continually monitored and that processes for higher data quality are implemented – irreplaceable for maintaining high data quality over the long term.

4. Efficient technological support

Companies may invest in digital solutions for master data management, but still fail to digitize suitable processes and structures. The reality often consists of central data management, but manual data capture, so that the data are still quite inconsistent and characterized by transmission errors.

How production benefits from correct master data

The entire production process – from the creation of the material master data and parts lists to purchasing, supply and production, including the complicated coordination between the departments, up to delivery – holds great potential for errors and delays. In short, an engineer only needs to enter a material into SAP multiple times and there are duplicates and with them incorrect calculation values. Companies in the manufacturing industry particularly benefit from a digitization of processes which is as seamless as possible, such as automated material master data creation, thus achieving decisive competitive advantages: adapted replenishment times, optimized lot sizes and minimum order volumes, reliable exchange of information, shorter cycle times and supply chains and thus measurable cost savings.

Why you should push digitization forward

For production companies, extensive usage scenarios regarding automated controls and even automated corrections are possible. Data evaluations of setup times, production times, wait times and maturing time, but also of material consumption and minimum stocks are possible.

In summary, sophisticated master data management leads to better data-based decisions and ultimately to company growth.

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