Master data management (MDM) allows an organization to tap the potential that was not even thought to exist. It acts like a double-edged sword, where one edge cuts expenses and the other is paving way to more profit. In indirect impact, rightly done MDM reduces risks of many kinds and eases the pressure on staff and IT systems.
Effective procurement of inventory means having exactly what you need where you need it and when you need it. This applies to raw materials, expendable materials, products, spare details for equipment, and other stuff like that.
There are two types of negative situations if procurement processes fail or even are absent: too much of stock and lack thereof. MDM makes it possible to avoid the both through running a database with accurate and timely renewed information on what a company has at its warehouses at the moment and the movements of inventory. Relying upon correct information enables well-timed and fast and right decisions.
There is more to it. An organization enriched by data on movement of products, raw materials, etc. during a business cycle, which for most businesses is a calendar or financial year, can build a forecast model. Such a model predicts highs and lows in inventory with high accuracy. That results in supply chain optimization which in its turn transforms into the reduction of costs.
Cost efficiency also can come from unification of purchases of certain categories. Various company’s divisions often buy the same services or goods from different suppliers. A centralized corporate purchase system would decrease costs through dealing with a single supplier of a certain item, with the supplier giving large discounts in exchange for a big volume or/and a long contract. But before you switch to a single source to enjoy discounts, you need to know what and how much you buy. That’s where you will need a good master data management system that would provide you with this information.
Higher Operational Efficiency
Messy data can cause failure in production, logistics, sales or any other aspect of business. Poor quality stock records filled with omissions or incomplete data can lead to a stock-out of critical parts, a situation when equipment must be stopped or operations must be considerably limited.
Strict and consistent MDM procedures in place designed with proper knowledge and pursued across all organization’s units prevent the company from such failures. They streamline business operations as processes are based on accurate data. Staff don’t lose time on ill-informed decisions or attempts to clear up issues that emerged because of incomplete or incorrect records. For instance, searching for a spare detail is done in seconds due to a well-organized information system while without a properly governed database it could take much more time or lead to a wrong result.
Optimization is more a process than a result as it requires regular action and review of results. The ongoing improvement philosophy is founded on constant analysis and a search for new decisions, not always lying on the surface. That’s why any business concept arising from this philosophy bases its calculations and recommendations on data. This approach called data-driven was boosted in recent years by intensive digitalization which makes MDM a necessity.
Increased Customer Loyalty
It’s always good to keep in touch with your customers even those who made a one-off order only and never came back. And even if there are millions of them. Congratulations on a birthday is a strong and low-cost option to keep relationships running as well as a way to subtly market some offers. But this data must be first collected, stored and then used without vexatious errors in dates or names or whatever else.
The example with congratulation can be applied to any kind of communication with the customer, from a cold call to tackling complaints.
Client records managed with care and used wisely give you a lot of insights into who your customers are, what they want and how their tastes are changing over time. If an MDM approach adopted in a company envisages a regular analysis of master data on customers, it brings many useful discoveries.
Insights Into Future
While the previous chapter about customer relations concerned insights into the existing trends, though often hidden or obscure, there are possibilities to look into the future. This doesn’t have anything to do with crystal ball, all you need is master data management and some other advanced technologies.
The task requires prolongation of current trends to see where things are after a while. Or using intuition enriched by discoveries and consistent patterns retrieved by big-data technologies. No matter which way you choose or combine the both, you need solid ground to be right in conclusions about new products, markets or areas with a cost reduction potential. It’s not all that’s required, but it’s indispensable. And high-quality data is impossible without master data management.Synopps comes to share its experience and insights into how to establish an MDM system that will drive an organization’s efficiency up to a new level. This experience shows that getting MDM in place may be a challenging journey, but in the end it’s generously repaid.