High-quality, easily-accessible data is crucial when it comes to optimizing the management of global service parts inventory. The information data provides imparts knowledge and leads to insights that can make or break a company’s after-sales service business, which is responsible for delivering service following the initial sale of a durable product. To collect service and service parts related data, leading manufacturers often implement multiple systems, such as ERPs, CRMs, financial and warehousing.
It’s a great idea in theory, but because these systems are rarely connected they can sometimes generate “dirty” data. For example, when vital information related to the consumption of service parts is updated in one system, the change doesn’t translate to other areas of the business. The lack of one single point of reference makes it difficult to make well-informed, business decisions which are vital to delivering world-class after-sale service.
Master data management solutions understand the relationship between the data in each of the systems and acknowledges that some attributes (like factory costs and lead times, for example) are best maintained at the local level. It cross references the attributes, then cleanses and validates the information to provide an accurate and complete picture of customers, suppliers and products. By creating these “golden records,” the management team, users and customers can easily access and interact with a single, definitive and authoritative source of truth for the company.
Advanced master data management solutions help maintain high-quality data that can provide a competitive edge. The better data found in golden records makes it easier to:
- Enhance transparency and manage risk
- Improve business performance
- Acquire, retain and upsell customers
- Forecast demand, trends and market fluctuations more predictably
Although master data management solutions are extremely powerful, misconceptions have prevented many leaders from uncovering their full potential. To help clear a few things up, I outline common these common misconceptions – and counter them – below:
Misconception #1: Our ERP system provides standard, consistent data across our entire network.
Enterprise resource planning tools are not the be-all and end-all for data management, especially when it comes to the complicated after-sales service parts industry. They are no longer the central source of data, and the volume and complexity of after-sales service data is generally too much for an ERP to handle. A tremendous investment is needed to integrate multiple suppliers and large dealer networks with an ERP. And, it can take years to implement a robust master data management program using solely an ERP system.
Companies using ERP for master data management don’t really have a true view of their customers, products and suppliers. Master data management is complex and a strong implementation requires specialization that considers data domain, industry, use case, organization and implementation style.
Misconception #2: We already have an acceptable Master Data Management solution.
Many companies do have some level of master data management but they fail to leverage all the system’s capabilities. Cumbersome implementation cycles of the past are often to blame – cycles that took a long time and exhausted all available investment before all functionality was fulfilled. A quick audit of a company’s data may reveal the consequences, such as large numbers of unclassified items, invalid ZIP or postal codes or an exceptional amount of error-prone records from one or more systems.
New strategies and products allow for better taxonomy of data, easier integration to third-party data sources, and effortless updating. Plus, advanced analytics capabilities now make it much easier to monitor the MDM hub and produce predefined and custom reports with just a few clicks.
Misconception #3: We can get through mergers and acquisitions easily enough without MDM.
Mergers and acquisitions within the manufacturing industry are not uncommon. They are imperative for growth but create significant challenges for IT departments. Often, the systems being used by the newly acquired company are mission critical or even superior to the parent company’s solution. Thus, IT must integrate data and communication while simultaneously planning and implementing consistent software across the organization.
A strong master data management solution can expedite the integration of new businesses and help identify IT improvement focus areas. Because a comprehensive MDM platform communicates with disparate ERP, supplier and CRM systems, it can bridge the gap during a merger and help the parent company:
- Gain visibility of all suppliers, customers and items
- Consolidate and cross-reference data, such as supplier prices, to find opportunities for savings
- Eliminate inefficient processes and coordinate the customer experience
- Apply advanced analytics to identify revenue and cost-saving opportunities
It is very important for leaders in the after-sales service parts industry to understand their own data and how the quality can affect efficiency, customer experience, and overall revenue. In today’s competitive environment, master data management is the key to making a pervasive and comprehensive impact on business.
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