Supply chains in today’s dynamic environment involve multiple stakeholders and span continents. Not only are they complex, but they’re also under pressure to run faster and at lower costs while overcoming all potential disruptions. This is where access to high-quality data and Master Data Management can be a game-changer. While siloed data can create hurdles and slow down a company’s ability to respond to supply chain challenges, trusted data can drive informed decision-making and optimize operations. Let’s find out more.
Importance of Data in Supply Chains
Businesses need accurate, complete, and consistent data to sustain upstream operations like sourcing raw materials as well as downstream operations like warehousing and distribution. Some of the ways data can make a difference to your supply chain are:
Enhanced Visibility
Data gives supply chain managers end-to-end visibility on the movement of raw materials and finished products. This information can be critical in dealing with disruptions related to transportation, especially across international boundaries. Take the Suez Canal crisis of 2022 for example. Supply chain managers who could pinpoint the location of their cargo could take steps to reroute it and thereby cut down on delays.
Improved Decision-Making
Access to high-quality data is critical to making informed decisions. This includes multiple aspects of supply chain management ranging from choosing suppliers to optimizing inventory and selecting transportation routes. For example, if a supplier were unable to deliver an order on time, you could search your database to find an alternative vendor.
Cost-Efficient Operations
Access to good-quality data helps supply chain managers optimize processes to lower operational costs. This could be in the form of minimizing excess inventory, picking the most fuel-efficient last-mile delivery routes, etc.
Increased Agility
When businesses have reliable data, they can use it to predict disruptions, assess risks, and design contingency plans to minimize disruptions to their supply chain. This empowers them to quickly respond to operational challenges as well as changing customer demands.
Data Isn’t Hard to Collect; What’s Limiting Its Use?
Given the many ways data can help build resilient supply chains, it’s surprising to note that data isn’t really being used to its full potential. This is mainly because although data is abundantly available, supply chain managers don’t always trust their data. According to a survey, only 53% of supply chain leaders have access to master data quality.
Supply chain data comes from multiple sources and hence, is, unfortunately, often siloed in different systems and formats. This creates a fragmented view of the system and makes the data unreliable. In other cases, the data sources may not be dependable. Thus, the data gathered from here may be inaccurate, incomplete, or outdated. Rather than help, basing decisions on such poor-quality data could have negative ramifications.
Master Data Management: The Key to Tackling Data-Quality Issues
In the face of the above-mentioned hurdles, it becomes essential for businesses to have a single source of trustworthy data irrespective of where the data came from or who ‘owns’ it. Master Data Management (MDM) is the easiest way to achieve this.
MDM is an umbrella term for a broad range of practices for data cleansing, enriching, transformation, and integration used to create a unified repository of trusted data or master data. Here are a few key aspects.
Data integration
The first step is breaking down siloes and bringing data from multiple sources into a single database. For example, customer data may be gathered from order records, customer service files, newsletter subscriptions, etc. Integrating all of this data helps businesses get a more holistic view of their customer base.
Data cleansing
Data often includes errors. ‘Main Street’ may be miswritten as ‘Man Street’ or the customer may have given his name as ‘John’ when placing his order and subscribed to your newsletter as ‘John Smith’. This causes confusion and creates duplicates that affect data analysis. Hence, all incoming data must be verified before it is added to the database. All you need for this is a data verification tool. These tools compare the data entered in your input forms against reliable third-party databases to minimize the risk of error – a process best handled through professional Data Cleansing Services.
Data standardization
To ensure data is comparable, it must be stored in standardized formats. For example, you might choose to record all product dimensions in inches. Similarly, all customer mobile numbers must begin with a ‘0’ followed by 10 digits. This maintains consistency across systems and departments and minimizes the risk of duplication and ambiguity.
Data enrichment
Sometimes, data may be captured incompletely. For example, a customer may enter his address without mentioning the street name. This can cause logistical issues for last-mile delivery. Data enrichment involves completing the available data with information sourced from third-party databases. This is often a step that can be processed through data verification tools.
It could also involve updating information. For example, let’s say the city administration changed a street name and the customer entered the old street name. MDM tools could then update the submitted information.
Data governance
Finally, businesses must create policies, designate roles and responsibilities, and create processes to ensure that the above-mentioned data management practices and quality standards are adhered to.
Building Resilient Supply Chains with Master Data Management
Master Data Management ensures that businesses have access to clean, timely, complete data. This allows them to use data to its full potential for analysis and lean supply chain management. It also supports accurate forecasting, coordination between departments and makes bottlenecks easy to identify and resolve. According to a survey conducted in 2022, supply chain leaders with access to trustworthy master data were 1.5 times more likely to report no challenges from the impact of the previous year’s supply chain issues as compared to their peers.
Supply chain disruptions are often out of your control. But, you can control how you respond to them. Having clean, consistent data ensures supply chain managers have complete visibility over
The post Master Data Management: Building Stronger, Resilient Supply Chains appeared first on Datafloq.
