By Philip Wessels, Senior ERP consultant, Epic
Modern businesses have become extremely reliant on software solutions to ensure real-time visibility of data. However, if your master data is incorrect it can have massive implications for your business. This is especially true if yours is a manufacturing or distribution company as these types of organisations are highly reliant on product data.
If your master data is incorrect, you are unknowingly introducing a handbrake to your business processes.
For manufacturing companies…
Incorrect master data could lead to manufacturing delays due to incorrect procurement of raw materials and system restrictions to incorrectly issue material for jobs, resulting in the incorrect inventory being shipped. If you have a requirement of serial tracking components. The serial number integrity need to have a physical product serial being matched to the serial numbers on your system. If there is a mismatch you could end up having difficulties with assigning the correct component serials for your manufactured item.
For distribution companies…
Procurement and planning are always top of mind in distribution companies, where business products are usually set up by buyers or product managers. If a product is purchased using an incorrect unit of measurement, this will hamper the sale of goods. In addition, when a product description is misrepresented, operations will invariably be directly affected.
Similarly, if products are changed when inventory already exists, this will affect stock holding. Your inventory team will need to correct this post procurement error and adjust inventory accordingly. Relabelling products could also be required.
Synchronise your systems
If you are running multiple systems and inconsistencies occur in product data reporting, it could have a massive impact on your business, especially when volumes are large. Most importantly your income could suffer as waiting customers might cancel orders that take too long to deliver. This leads to reverse logistics and a drop-off in customer satisfaction.
How to prevent a master data disaster
Have good supplier agreements in place regarding labelling of products, including UPC barcodes and serial numbers.
Make sure you have system controls in place, with the well-defined rules laid down to govern and control all your processes from start to finish. In cases where no system controls are in place, make sure to implement a product creation policy. This will ensure that the person creating product masters is fully aware of the implications of an item being incorrectly purchased or incorrectly classified.
The best way to prevent a master data disaster is to have an already-integrated solution where functions do not rely on integration between systems. A good ERP system ticks all the right boxes and prevents your master data from acting as a handbrake in your business.
