Master Data- The Hidden Anchor on Your Profits

Master Data Anchor Profits

Master data may be the least exciting topic of all time, so you might wonder why I would put pen to paper to talk about it.  Frankly, because it’s vitally important to your decision-making ability. In spite of this importance, master data management is often undervalued and under-managed in commodity companies.

Companies undervalue master data

Why commodity companies tend to undervalue master data is a  puzzle I’ve thought about deeply.  One primary reason is that commodity companies are usually very cost conscious. Without robust data analysis and supply chain software, which many don’t have, they simply don’t see the need or the ROI.  However, when you begin to attempt to analyze your sales, rationalize your packaging, simplify your product lines, or any of the hundred other tasks that are needed to maximize profits; being able to sort your products and customers correctly across every important attribute is critical.

I have worked for commodity companies that had very little master data management and I’ve worked for companies that were militant about master data management – one to the point they had a master data Czar empowered to stop anyone trying to force something through against their protocol.  The difference between the data management culture in these companies was night and day.  

Master data makes answers accessible

In one company, if you were asked how many boneless pork loin codes we had you simply had to sort the product hierarchy to the correct Primal>Sub Primal>Product Category combination and the answer was easily accessible.  The same went for any analysis that needed to be done: all the systems were built around the product and customer attributes.  The real benefit to that is that the culture was such that people trusted that the data was correct.  As any good manager knows, trust creates speed and in the commodity business there are no more important factors for success than speed and trust.

One can see how important the ability to quickly and confidently cut and slice data is in the modern data driven world.  You want to know what you have left to sell for tenderloins? Simply sort to tenderloins and every code that has product available to sell is there in a second.  You then realize this customer only buys Julian dated 30# boxes, so you sort by those two attributes as well and you’re able to go on about your day in a matter of seconds.  

Now, let’s contrast this to the same question without having proper master data applied to your product codes, and/or not having confidence in the correctness of the master data.  What do you do?  Well, you have to hope you remember every code or have a list of all the codes handy (and hope that the list is current) and then go through each code’s spec to see if it has the correct attributes.  Don’t laugh, I have spent far too many hours of my life doing just this, and mistakes happen: product gets sold incorrectly or not sold because you don’t find what you are looking for, money is lost, product is wasted…I could go on forever and this is just one example. 

Your company needs a master data leader

My suggestion: if you have master data issues, find someone in your company or hire someone to be the master data Czar.  Pick someone who will stand their ground politely when they get pushed to cut corners and as an executive give them your unwavering support.  Create a culture of good data and you, and your bottom line, will never regret it.  

A great time to improve the master data is at the onset of a supply chain planning software implementation.  Far too often companies get this reversed and think they need to solve everything from culture, to master data, to personnel prior to implementing a transformative product like a supply chain planning solution.  It seldom happens and they continue to trudge along, losing ground to their competitors until the next regime comes along.  A software partner that can’t work with you to improve your data and guide you toward fixing the data that matters is not someone worth partnering with.  Find a software partner like us that knows your industry as well as data science and can help you streamline your master data project and integrate it with the software solutions you need to run your business. 


We’re eager to help you solve the challenges like this in your business.

Reach out to us today!

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