Supply-chain design and management encounter constant struggles to cope with the modern-day business imperatives, and finally, entrepreneurs have turned their way of looking at the supply chain challenges through master data management. In recent days, businesses have been realizing that there cannot be any compromises in the flow of information.
Many businesses fail to understand that managing data through spreadsheets and outdated ERP systems and several other applications may not help them with accurate information. They require timely access to clean, consistent and accurate data for enabling better communication between suppliers, partners, shippers and brokers and also for premier product commercialization and innovation.
To obtain and follow this in a consistent manner, a specialist like master data management is required. Master data management ensures enhanced consistency, standardization and harmonization of sharing of information across the globe and helps in maintaining data effectively through the supply chain. Here are some challenges you should definitely know and understand the role of master data management in today’s supply-chain environment.
#1: Lack of data visibility greatly impacts your agility and decision making
Supplier data remains often incomplete, obsolete and fragmented over hundreds of systems like supply chain management, supplier relationship management, any data management software, enterprise resource planning and several other accounts payable systems throughout your product lines and demography.
Most important data is hidden in spreadsheets, remote file stores and databases, all in individual structures. Therefore, this data gets piled up in each business unit, procurement team and all regional offices, making it impossible to access them easily. Moreover, it is not assured whether these data are consolidated and complete and may not create a trusted view of all your suppliers and sub-suppliers to take action immediately.
Let us see the fact notes here:
- Deloitte says that around 65% of procurement leaders get restricted or sometimes no visibility to data beyond their tier-1 suppliers.
- Similarly, Accenture states that 76% of CFOs agree that without all staying on the same page and transparency in information, it is difficult for the company to achieve its business objectives.
Therefore, the need for relying upon a trusted 360-degree view of their supply chain becomes a priority. Moreover, automation is required in every aspect of the supply chain to make more efficient and effective workflows. Master data management gives centralized access to everyone related to an organization with providing improved visibility and transparency into your supplier data, thereby helping you in enhanced supply chain insights and decision-making.
#2: Unsorted data quality leads to a loss of millions
First, data feeding should be maintained properly; otherwise, using the best supplier information management solutions also cannot help in this case. Therefore, no data should be incorrect, incomplete or obsolete while entered in the main system.
There are many proven cases for poor supplier data quality leading to a loss in millions with respect to poor decision making in business, ineffective operations & logistics, upfront increase in opportunity cost and missing important procurement information.
Here are some facts supporting this point:
- Deloitte in one of its statements had said that 93% of CPOs rate cost reduction occurred, which is a priority for the organization, in the next 12 months.
- Moreover, 60% of CPOs highlight poor master data quality, governance and standardization as the biggest challenges to procurement.
If automated data quality checks are embedded in your supplier management workflows, it can effectively enhance the supplier data quality, substantially decreasing manual workload and costs.
#3: Manual data processes can highly slow down your time to market
Managing your supplier data should be friendly for everyone who uses it and who access it also. Manually handling your supplier data can be ineffective and inefficient and may result in repeating your workload and gradually slow down your product’s time to market. While onboarding new suppliers takes weeks and weeks, it highly shows the tangible opportunity cost and loss in your business.
Here are some real statements from companies on manual data processing:
- The CFOs of Bain & Company have kept improving and automating procurement processes as a top priority goal of their organization.
- It also says that 60% of companies do not use any tools or depend on enhanced MS Office tools for delegating workflow tasks and supplier relations management.
Automating supplier and product information management highly reduces the time taken for onboarding new suppliers by up to 80%, which results in the quickest time to market for your new products up to 10 times more than the present and provides a streamlined and automated workflow across every end of the organization.
#4: Lack of following governance standards and maintaining transparency, increases risk
In recent days, we can see a huge impact created by supply chain risk factors and uncertainty in managing supplier data. Organizations find it difficult to assess the risk for a specific supplier along with monitoring their compliance or performance and consider the most common pain point for selected supply chain executives.
Facts to understand:
Almost 93% of CPOs of Deloitte have rated risk reduction in the top list of their organization.
To overcome this, companies should make compliance a mandate factor for vendors; therefore, it becomes easy for them to mitigate supply chain and vendor risk with a 360-degree view. This allows companies to monitor and bring down supplier risk and gives complete accessibility to alternate suppliers if any supply chain disruption has occurred.
This is why you need master data management to excel in all supplier-facing applications, business intelligence tools, up-to-date supplier data, finance, legal and other supplier management associated teams. Master Data Management easily controls their activities and mitigate their risk through ensuring compliance at the beginning itself.
#5: Gaining consumer trust and loyalty through sustainable sourcing & traceability
An important and most critical factor that can change everything upside down is meeting and managing consumer expectations since decision making will be in their hands. Some of the leading brands such as Unilever and top retailers like PVH are primarily focusing on their supply chain and marketing efforts around social sustainability and traceability since they appear to be an important driving factor of long-term success.
The facts that you need to know on trust and loyalty:
- In a survey conducted by Accenture, 63% of consumers declined to buy products and services from companies they do not maintain trust as supply chain traceability was the key criterion that influenced their decision making.
- However, 99% of CEOs believe that sustainability can be an important and most driving factor to the future success of their business.
Therefore, by providing a trusted and relevant product, the ingredient can lead to gaining consumer trust, and sourcing of data can create a unique and seamless brand experience to your consumers. Additionally and mandatorily, making compliance, transparency and sustainability a factor while onboarding and monitoring suppliers can change your entire aspect of looking at data management more effectively and easier too.
Benefits of Master Data Management
Till now, we saw the challenges of supply chain management due to improper flow of data. And how it creates strong impacts across all the ends of a business. Now we will see how master data management can help you gain benefits.
- Master data governance improves your data quality and lowers operation costs. Master data management allows you to effectively consolidate, clean, improve, govern and data. You can edit, update or delete any file and make your amendments easy anytime.
- It helps you launch new products faster. Since master data management offers you quick time to market, you can launch any number of products in the market even faster than before.
- It allows you to deliver exceptional customer experiences with applying prompt marketing strategies for product promotion with updating the right availability information of products to consumers, thereby resulting in customer satisfaction.
- You can render outstanding service to your consumers and maintain healthy relationships with your suppliers without having any confusion in the data maintained and shared across.
- Master data management helps you in achieving regulation and compliance across suppliers and keeps you away from risk factors and ambiguity.
In the age of information, outperforming the competition becomes a non-denying necessity. Therefore, mastering your data is the key to presenting relevance and value to both suppliers and consumers. It makes your decision completely data-driven and gives no room to supplier chaos and helps your customers experience high benefits through omnichannel and personalization of product information.
With using master data management, you can easily maintain and leverage your master data and leap ahead of the existing toughest competition, with a performance that is impressive, better, faster and more of consistent as well. More of all, master data management improves your decision making and makes you take it right.
Conclusion
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