Why Master Data Management Lies at the Heart of Supply Chain?

A sound MDM solution can help supply-chain managers to achieve data completeness, consistency, coherence and compatibility. Supply chain organizations need to be responsible for master data about customers, products, locations, vendors, and suppliers.
MDM is the future of Supply Chain Management - Pimcore

With data quality and consistency becoming critical in supply chain performance, supply chain leaders must pay more attention to MDM. Sales volumes are increasing, distribution networks are developing, and supply chain professionals are trying their best to cope up with evolving business imperatives.

A sound MDM solution can help supply-chain managers to achieve data completeness, consistency, coherence, and compatibility. Supply chain organizations need to be responsible for master data about customers, products, locations, vendors, and suppliers. Effective master data management platform around data accountability and ownership must be clearly defined and leveraged by supply chain leadership.

But why’s the focus on supply chain data management? Because today’s supply chains are highly data-dependent. When turned into information, this data delivers insights that can either surge or slide down in success charts. Companies that fail to properly track and manage supply chain data lack the ability to make informed decisions, let alone optimize overall performance.

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Master Data Management is the future of SCM

Traditionally, supply chain specialists implemented multiple systems, such as enterprise resource planning (ERPs), customer relationship management (CRMs), financial and warehousing software to take advantage of every opportunity to collect data. This sounds good in theory: but left disconnected, these systems lead to “unclean” data that could severely harm the efficiency of a supply chain.

As a result, organizations today lack quality data and interoperability of data sets across different trading partners. Most supply chain leaders agree that available data is difficult to correlate because it is siloed in a number of ways, due to disparate tools and standards, or simply because it is bad data. Fragmented and inconsistent data delays time-to-market, increases forecast errors, produces wrong production and inventory planning, affects cross-sell/upsell opportunities, and creates inefficiencies.

Timely access to clean, consistent, and accurate data is therefore pivotal not only for better communication between suppliers, partners, brokers and shippers, but also for product commercialization and innovation. So how can you extract the right data that will benefit your business? The answer is Master Data Management (MDM).


MDM is a comprehensive solution to define and manage all critical data. It provides a single, trusted view of data across the enterprise, agile self-service access, analytical graph-based exploration, governance, and a user-friendly dashboard. Supply chain leaders can use MDM to get rid of bad data and succeed in digitization. It ensures improved consistency, harmonization, standardization, and helps to manage data extensively throughout the supply chain.

Here are a few reasons why MDM is indispensable in today’s supply-chain management environment:

1. A single source of truth in the ever-evolving data landscape

With more data than ever at your fingertips, how can you make sure you have the right insights to make truly informed decisions? Data has expanded across multiple touchpoints. With increasing dependency, escalated complexity, and the sheer volume of data in the present day; a consolidated platform for its synchronization and centralization is imperative. MDM helps in the consolidation and cross-reference of attributes. and cleansing and validation of information. It provides a precise, all-inclusive depiction of customers, products, suppliers and partners.

Consider this: products move first from suppliers manufacturing units to the warehouse, then get further transported to retailer’s storage and finally to store shelves where customers buy the product. With the help of MDM, information like barcode, description, price, size, color is standardized and made accessible to everyone across the value chain. This allows data to move faster, more accurately, and with better efficiency.

2. Homogeneity and transparency across the organization

Siloed departments remain a big issue in supply chain design since it is a major factor in failing data visibility. This in turn is a crucial drawback since a variety of decisions and functions rely on visibility; and bringing together all business systems and merging data across enterprises is the first step towards transparency.

A wide-ranging MDM strategy can act as a communications bridge between the myriad supplier systems, ERPs, and CRM systems. All the attributes are containedin the system (like product description, barcode, vendor pack quantity, warehouse pack quantity, cold chain requirements, replenishment methods, shelf life of the product, size, color, MRP and so on). Consistent, reliable end-to-end data is the key and the cumulative collection and screening of all this information ensures utmost transparency.

During mergers and acquisitions, MDM is especially instrumental in the on-boarding of new partners, suppliers, systems, and products onto the platform. The better the transparency, the more convenient it is to identify revenue-generation and cost-cutting opportunities.

3. Accurate prediction and optimal inventory management

Inventory management and forecasting goes hand-in-hand. When implemented correctly, together they can increase fill rate, with better in-stock handling in brick and mortar shops, facilitate proper storage in warehouse and store, enable faster movement of goods, and increase efficiency of distribution channels. This allows companies to keep track of the availability of supplier stocks, meet customers’ year-round requirements, and address issues that can impact inventory up-keep, such as seasonal variations. By ensuring timely access to information, MDM reduces costs, increases order-fulfillment rates, and improves customer satisfaction, thereby decreasing the burden on inventory. With improved efficiency and inventory monitoring, it also provides a single source of truth for predictive and prescriptive analysis and planning.

4. Assistance in global operations

Global operations welcome opportunities and challenges in equal measurement. With greater customer-reach comes new competition and regulatory compliances. A substantial consequence is data proliferation. With growing value chain, number of nodes in between also increases, and data handling becomes difficult amongst internal parties. Any inconsistency in it can result in major losses. 

Supply chain risk management (SCRM) controls are essential in such cases to comply with global trade agreements, tariffs, legalities, regulations, social norms etc. Through coupling with standardized supply chain data pools such as Global Data Synchronization Network (GSDN), MDM facilitates smooth information exchange and accessibility between all parties. It enables data standardization and improved collaboration amongst both internal and external parties, reduced administrative labor, accurate financial data and faster payment for suppliers.

5. Smart management and sustainability

In an era of interconnected businesses, a fragmented approach towards managing the complete supplier lifecycle across multiple business units and regions is outdated. A process-driven workflow involving visualizing delivery routes, inventory optimization, the productivity of assets, and estimating future demands is the solution to the crisis of growing operational complexities and costs. Agile self-service access to trusted data, real-time analytics, consent management, and holistic data governance can address the rising challenges in SCM.

An MDM that is built on a consolidated, scalable, and single platform binds master data throughout multiple domains, eliminating silos and integrating information seamlessly across systems. It can offer a single portal for all suppliers, not only to handle product data but constantly improve upon the overall management.

Read More: Facing Data Management Dilemmas in Supply Chain? Eliminate them with MDM


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Author:Dietmar Rietsch
Dietmar Rietsch
  • Managing Director
30 articles by this author

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