Data quality, or lack thereof, is a common challenge that companies face in today’s business environment. As manufacturing and asset-intensive organizations grow and evolve over time, so too does the volume of inventory and electronic data that is required to maintain operations. Whether growth occurs by natural progression, or via acquisitions and mergers, it adds a new degree of complexity to the already challenging master data management process. In addition, changing technology and outdated or unclear business processes often contribute to the difficulty of maintaining high quality Material Master data.
Today we’re going to outline why that high quality data matters by discussing what causes your data to be low quality, what exactly it means to have low quality data, and why that matters.
Causes of low data quality
While there are many factors that can affect the quality of your data, the most common factors attributed to low data quality include:
Unrestricted system access. When employees are able to enter data and make changes at every level, they may make mistakes or feel like they need to enter values that are not actually for them to enter.
Employee turnover. If your company has a lot of turnover, it can affect the level of training employees receive, leading to new employees not entering data consistently. A lack of staff can also pressure new employees to complete work they’re unsure of quickly, without adequate quality checks.
No data standards or limited compliance. Similarly, if your company lacks the appropriate standards for employees to follow, your data will contain inconsistencies.
Mergers and acquisitions. Merging together companies’ data sets undoubtedly comes with difficulties, as the data has likely been handled differently. To merely put the two sets together will lead to a difficult to use Material Master data set, likely rife with duplication.
Multiple ERP/EAM/CMMS platforms. Using multiple systems is bound to get confusing and lead to discrepancies in data entry as well as duplications across systems.
Multiple sites/plants. Different sites or plants are likely handling their data entry differently, especially if they are operating autonomously of one another. That makes it difficult to have one, company-wide Material Master data set to use.
Multiple languages. You may have sites and plants across global regions. Since employees will be entering data in multiple different languages, data may be inconsistent or you may not be able to properly determine matching items when they’re entered in different languages.
Issues in the data
We talked about the data quality being low, but what does that actually mean? As a result of the factors above (and others), your Material Master data progressively deteriorates, becoming less reliable and usable to the company for making critical business decisions. Some of the major data quality issues that companies face include:
Spelling mistakes
Multiple names and codes for the same manufacturer
Missing manufacturer names and part numbers
Duplication
Incomplete descriptions
Inaccurate part information
Inconsistent data format and naming convention
Incorrectly classified materials
If these issues sound familiar, you’re not alone. But it’s not too late to understand how this data affects you and remedy the issues.
Consequences
With only inconsistent and unreliable data available, maintenance and procurement struggle to efficiently maintain operations, manage inventory, and source parts when needed. Some of the most costly inefficiencies and consequences of low data quality include:
Unidentifiable items. Employees face more work trying to find or stock a part that isn’t easy to identify. This can be caused by poor entry standards.
Difficulty searching and locating parts. This can cost you valuable time, whether it simply shortens what can be done in a shift or costs you significantly due to equipment downtime pending a part replacement.
False stock-outs. When data’s not consistent, employees may search for a part and not find it, even though it’s actually in stock. This issue can result in wasted time, excess orders, and significant cost to the company depending on the urgency of the parts in question.
Increased spot buys and expedited part orders. When you can’t tell if you have a part and need one urgently, perhaps to fix a piece of equipment, you will inevitably be forced to buy the part again, spending more money than necessary to do so.
Excess inventory accumulation. If items are entered differently, you can end up in situations where you’re stocking based on inaccurate information. For example, if you find you have 100 BALL BEARING, you may decide to order more not realizing you already have 200 BEARING, BALL as well.
Limited spend visibility. Without clear data, it’s harder to make and keep track of your purchases. Plus, you won’t see the benefit of spend leverage that you otherwise would.
Unreliable reporting. Reporting is an important aspect of monitoring and improving your functionality. However, it’s only as good as your data.
Compromised ERP/EAM/CMMS functionality. To fully take advantage of the systems you have in place, thereby increasing your efficiency, you need consistent, high quality data.
How do you fix the issue?
Unfortunately, we find many manufacturing and asset-intensive companies struggle with low quality Material Master data. The good news is that it can all be resolved through a data cleansing initiative and maintained by implementing a corporate data governance strategy.
What will a data cleansing initiative do? Typically, all of your data will be standardized in the same system, using a schema determined by your company. This can be an internally developed schema, or one provided by a data cleansing partner. For example, IMA has a proven schema that we’ve developed and adapted over the years. Many of our customers choose to use this schema or adapt their schema to take advantage of ours.
Once you have all of the data in the same place, cleaned to the same standards, your data is actionable and can be used to improve the efficiency of your company. Maintenance and procurement will be able to rely on your data again and remedy the issues that cost your company money. In fact, our customers typically see 4 to 6% savings from a more efficient procurement strategy. Of course, it will also be important to put a long term solution in place to continue to clean new data to the same standards!
What can IMA do for you?
IMA is the leader in Material Master data management; no one has more experience than us! If you’re ready to take on a data cleansing project, we’re here to talk through your options. Our services offer the most flexibility to meet your needs, whether that’s full or partial support. IMA also offers ongoing governance of data, to make sure your company can continue to grow and add data without regressing to the same pain points you had before the cleansing initiative.
You can learn more about our services here or send us a message at info@imaltd.com. And don’t forget to take advantage of our no cost, no obligation Data Evaluation, to see actual cleansing samples and a detailed ROI projection!
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