Getting a handle on all the data that flows through your business and making sure it's all clean and accurate can be a daunting challenge, especially if you have globally dispersed business units, each with its own software applications. But, as more manufacturers ramp up operational excellence initiatives and deal with global regulatory issues, they are finding that a data governance strategy is essential to ensuring consistency across the enterprise.
And, increasingly, manufacturers are making master data management processes and tools a major part of such a data governance strategy. MDM, which essentially describes an ongoing process for reconciling and managing enterprise-wide data, can be hard to wrap one's head around. That's because the discipline often involves more than one type of technology. More and more, however, it's gaining mind-share among manufacturing business executives as well as IT types, experts say.
Research firm Aberdeen Group has found that as many as 98% of companies struggle consistently with data integration, quality, and communication issues. The firm also says that, regardless of whether companies have formal MDM plans or initiatives in place, many are striving to achieve the elusive goal of establishing a "single version of the truth" from multiple, disparate data sources.
"People have finally realized that master data accuracy is the biggest problem they have in getting value out of their enterprise application investments," AMR Research Vice President of Research Bill Swanton told Managing Automation in a recent interview. "It's not just a data cleansing problem; it's [about] keeping the data clean on an ongoing basis."
Industry experts agree that while the goal of establishing and maintaining one version of the truth within an enterprise is not new, certain factors in today's business climate have dovetailed to produce a particularly urgent need for a consolidated view of qualified data. These include increased M&A activity as well as operational efficiency and supply chain visibility projects driven by competitive pressures. Following a merger or acquisition, or even a burst of organic growth, for example, organizations are invariably left with disparate data silos containing information about customers, products, and suppliers.
"The basic problem is that you have multiple applications within an organization that have been built for a very specific purpose, like inventory management, order management, or planning, each running off a separate database," says David Corrigan, master data management product manager at IBM. "There are multiple repositories of certain types of data and multiple business processes for which the data is changed and updated, and they're not all in synch with one another."
Companies also often struggle with regulatory compliance and the need to sort out data about tangled webs of customers and suppliers, says David Feshbach, global master data management competency leader at HP Services. "Not only are there problems with knowing the quality of suppliers, but, in some cases, suppliers are also customers," he says. "There are synchronization and data quality problems in certain countries where systems don't provide quality reference data needed to establish one version of the truth."
A common scenario is a global manufacturing company running separate ERP systems in each country in which it operates, even though it may be manufacturing and marketing one product or set of products throughout the world.
Take the case of consumer electronics maker Panasonic, which looked to MDM to help manage new product introductions. The company's product introductions were being held up for weeks at a time, Corrigan says, while its marketing staff worked to gather and organize product data residing in various systems throughout the organization. IBM's WebSphere Product Center (now known as IBM InfoSphere Master Data Management Server for Product Information Management), which is used to manage the process of creating, enhancing, and distributing product information to customers, dealers, websites, and other applications, provided Panasonic with a central point for product description data. Using the tool, Panasonic cut down the introduction process by two weeks, or 10%. The result was a 2.5% increase in profitability, Corrigan says.