The importance of master data in successful planning

Ankita Jha
April 11, 2022
Master Data Management

With data becoming the key to any organization's progress, the necessity for improving its quality and consistency, too, has turned imperative. This necessity led to the genesis of Master Data, which encapsulates the core of business information. It includes structural and hierarchical references needed for a specific enterprise and is easily shareable. In the absence of Master Data, one cannot do any business in present times. If excelled at Master Data effectively, companies can see a direct impact on boosted sales, reduced risk management, and improved profitability.

Master Data is data of a company that is built in-house and cannot be outsourced, generally maintained internally. However, missing discipline and strategies in its management with a lack of IT support results in bad data quality. And therein lies the issue of fragmented or inconsistent data, which negatively impacts cross-sell/up-sell, delays time to market, increases supply chain inefficiencies, and reduces an organization's overall market penetration. This is why the importance of Supply Chain Master Data Management cannot be overstated. Master data management refers to the process of managing, organizing, and centralizing data for marketing and operations in an organization. It addresses the pain point of fragmented data by facilitating quick and accurate access to data for proper information management.

Why do Planning processes fail due to poor Master Data Management (MDM) Systems?

For example, the planning systems are used by different users inputting different bits of information about the same product. No individual exists that knows all product information. The sales guys might know the catalog of similar products, order quantities, and transportation mode. But another person from the transportation team will possess knowledge regarding the preferred supply point in the network and lead times. A production team member would know the manufacturing lead time and testing scenarios for it. It is beneficial to assume that all entered data by various key users cannot be used as is, the ERP forms have a list of mandatory and non-mandatory fields, which has no control over the completeness of the data network. While a material can be coded, the relational item list cannot be prepared if the BOM does not exist in the master data.

It is important to understand that the master data creates an infrastructure for executing transactions and building planning systems.  

How to simplify Master Data maintenance, and why maintain Master Data?

To simplify master data maintenance, managers must put their faith in automation and data governance. These are the two notions that describe the best, quickest, and safest approaches to handling Master Data.

Automation can reduce manual entry by 99 percent, improving data accuracy considerably. By automating the entry of the materials' stock value, production time, weight, language content, and so forth, the number of values the staff must enter per material comes down dramatically.  

Regulatory concepts related to Master Data, such as where and how it should be stored, are provided by Data Governance. This supports business processes. Users should be able to easily access Master data from multiple systems and modules by recording it once and centralizing it. While Central Data Governance can be one of the options to go for, the best governance structure must fit with the business model and strategy. Hence, companies must choose what suits them the best.  


It is advantageous to incorporate country-specific legal requirements and preconfigured workflows into the solution. Simplifying is primarily about making it easy for people to interact with and maintain Master Data. If the company's processes change, users must be able to modify data governance easily. Plus, it must also be simple to get facts for swift business decisions.  

Benefits of Master Data Management

In the digitized world, data delivers competitive advantages if you know how to exploit it. The key to leveraging data for business benefit is data management. The potential of Master Data Management to supply integrated, insight-ready data in real-time lays the groundwork for producing corporate value through data. The following are the benefits of Master Data Management:  

  • Data Availability: The key reference data is entered into the system as a part of the setup. These are static and stable data inputs related to currencies, profit centers, materials, suppliers, and customers. With changes, the stable data gets added, deleted, and modified over time. The effectivity and end dates to these data objects in master data help the planning teams function accurately.
  • Information flow: Streamlining company operations necessitates the integration of data from customers, organizations, employees, assets, locations, and products. Staying in sync with emerging Master Data Management trends is critical for a seamless transition. An MDM platform links data across company silos and suggests relationships and insights that users would not have discovered if they had only looked at data from their department or business function. This enables you to access data from a single source, gain critical business insights, and power company processes. It can also include data from external or third-party sources to provide a rich context for customer profiles and supply chain visibility.
  • Efficiency: The efficiency of day-to-day processes of receiving and fulfilling orders through purchase orders and sales orders is depicted by the time taken to complete these transactional processes. Accurate forecasts, supply plans, and optimum inventory are signs of a healthy supply chain and result from a good quality Master Data Compilation.
  • Transparency: In a data-driven business model, reporting numbers in sales, inventory, and P&L is fact-based. Hence, Master Data is an important asset for operative processes and reporting to get wide-ranging transparency to adhere to the business model.

The below picture shows how Master Data plays an important role in organizational processes.


Effective MDM is a complete solution for defining and managing all vital data. It offers a unified, trustworthy view of data throughout the company and agile self-service access, and an easy-to-use dashboard. Good MDM can help supply chain leaders eliminate faulty data and succeed in digitization.  

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Meet the Writer
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Ankita Jha
Ankita has 6 years of experience in the Supply Chain domain, particularly in the areas of Demand and Supply Planning. She gets an adrenaline rush from solving complex issues for clients in their Supply Chain operations.


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