MDM - Single window for PSG (in a heterogeneous & ever changing environment)

About PSG (Product Service Group) - Large organizations, with multiple product divisions, have a common team to streamline the process of creation and maintenance of their product data. PSG is responsible for ensuring the completion of product data, such as engineering, production, sales, purchasing, costing, product classification (hierarchy), etc. The group expedites the action needed from different departments to complete the physical task and communication to other teams.
PSG has always struggled to keep up the pace with ever changing (evolving) ERPs; varied attributes for products & components, which are maintained in multiple systems.
Frequent addition of new products & acquisitions being the order of the day, there is sharp increase in the number of master data that need to be handled. This has added a new dimension to the ever-lasting challenge of managing duplicates and redundant master data for FINI, SEMI and RAW materials.
Just with the experience gained by individuals over the years, key personnel in the organization are stuck to PSG, primarily because no one else can handle the complexity involved in the master data creation and maintenance activity.
- A well defined “common” Master Data Management process will not only move such individuals to take better / bigger responsibilities but will also help to move organization from 'person centric' to 'process centric'.
With MDM we can:
- Define a ‘truly’ global data definition process and hence common procedure for all divisions, geography.
- Clear categorizations of products into ‘correct’ product groups as well avoid duplication of material master within product groups / across systems.
- ‘Accurate’ analysis of the inventory based on product groups, to review & revise purchasing contracts for inbound materials.
- ‘Better’ planning of the dependent components (single i.e. undivided ‘net requirement’ for a given physical material)
Though we focus on the strategic materials for cleansing the data across the organization (for a global / wide-spread company), we often ignore the consolidation of non-strategic (MRO & non-stock) items. These are neither under the control of PSG nor are closely watched by strategic purchasing group, which at times amounts to multi-million dollar inventory and high value purchases per annum.
With MDM we can:
- Classify these item using the taxonomy and data modeling in MDM client.
- Identify duplicates using EP based search functionality and avoid multiple definition for the same item, required for different locations
- Promote the purchasing organization towards SMI (Supplier Managed Inventory) and consignment purchases, to better the inventory ratio at each division / facility / country.
- Get simplified reporting of materials, at different levels.
Typically I would classify the use of a master data into -
a) Master data to support core business processes
b) Master data for reporting & analysis purpose
c) Master data for information and support activities outside system
The first two applications of master data are inter-dependent in the sense, a better and more accurate reporting can help - improving the core business process.
We build our core business processes, based on the limitations / constrains posed by the existing master data handling tools. e.g. an organization has taken a decision NOT to centralize the master data for MRO material / services. The valid reason for this is - it’s not worth spending required resources. This has led to the local purchase of all such items (spare parts, services, etc.).
With MDM, not only the initial consolidation of such items is possible but it makes it worthwhile to maintain these items centrally, opening up the avenue for global planning & purchase. This also helps in lowering inventories of these items (at organization level) and negotiate the prices on global spend.
The third use of ‘data for information’ is equally important in day-to-day operations. We maintain a large pool of such data like dimensional data for the product, import code, instructions to procure, manufacturer part number, etc. This data is widely used for establishing the communication and reporting to different governing authorities / business partners.
Organizations with versatile product divisions need to channel the workflow to different group of people for different product line. Current ERP do not provide an easy way to define different rules / validations for different products. (Note- the primary focus of any ERP is to support building a robust business process in different areas and integration between different applications, rather than maintaining the master data).
On the other hand, implementation of any ERP or that of new dimensional products like CRM, etc., requires organizational restructuring to some extend.
In addition to this, shrinking product life cycle has put pressure on ‘innovation’ / ‘R & D’ division to reduce the lead time for product launching. PSG in the organization have often failed to get the data populated / validated by different groups in the company, in time.
PSG needs a system that is robust enough to carry out all the validations needed to completely define the new product and flexible enough to accommodate variations needed, across the product groups.
All this is required to be executed in an efficient manner, with the ability to quickly configure the validations process, separate for different group of materials, supporting the product dynamics demanded by marketing division.
The best part to happen in MDM 5.5 is 'Data Management WORKFLOW'. The newer MDM 5.5 Workflow engine gives you the flexibility of defining the workflow tasks, events and assign individuals to the roles.
This also gives IT managers more liberty to add new applications to their infrastructure, with ease. Thus the decision to add a new system is more focused on leveraging the better technology for the likely benefits of it, rather than the constraints on its integration with the existing system landscape.

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