How Do MDM Tools Support The Functioning Of A Business?

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    Feb 15, 2014
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How Do MDM Tools Support The Functioning Of A Business? Photo by Jessica  Bank

Irrespective of its sector of operation, every organization ultimately aims towards the achievement of two important aspects that are vital for its survival in a competitive business environment, i.e. growth and enhanced productivity. While the nature of the organization, its size, operations and workforce also fluctuate with the growth of an organization, they come with their own set of risks and challenges that need to be resolved on a timely basis. Though there is always a solution to every problem, it requires a thorough analysis and sufficient time to effectively deal with them. Inflation and the increasing competitive attitude have forced many entrepreneurs to implement various cost-cutting techniques to increase their productivity and manage their resources efficiently. For example, a business may employ inferior data governance tools to fulfill their short-term objectives instead of concentrating on achieving long-term results.

While it is always beneficial for an organization to curb unwanted expenses, many bear a misconception that investing in MRO activities is an unnecessary expenditure that needs to be restricted. As acquisition of direct materials and tangible goods is important, so is the maintenance of the facilities that are already being used by the company. For a healthier environment that is free of breakdowns and management failures, it is essential that the companies dedicate time and resources for regular maintenance, repair and other business related operations. Material master data management is one of the important factors that leverages the lifespan and growth of an organization by focusing on MRO. Though the implementation of MDM tools alone can be productive for a business environment, the MRO chain can be fully optimized when tools are combined with an MDM strategy.

The main advantage of MDM is that it solely relies on planning and prevention rather than reaction and correction, a management strategy that was prevalent in business before the idea of data governance strategies. Implementation of data management tools plays a crucial role in the successful execution of MRO activities, as it provides accurate information on a timely basis that aids in efficient utilization of the available resources. This helps shorten the downtime that results from sudden equipment failures. Furthermore, as the assets of the company are managed through a single source, it allows more flexibility to the experts to monitor, analyze, implement and execute different strategies from time to time.

Material or Item Master data needs to be harmonized for optimum performance. Material data harmonization is composed of two integral elements – historical data cleansing and on-going data maintenance (ODM). While the historical data cleansing process focuses on standardizing, enriching and rationalizing the data that already exists in business systems that are used by an organization, ODM is a strategy that focuses on the maintenance of MRO data on a regular basis, as new material parts are published onto the ERP. Effective execution of both these phases can provide more transparency and flexibility to the MRO data, while enhancing the effectiveness of day-to-day business activities. This helps to free up to 12% of indirect inventory holding costs, and is a core reason why corners should not be cut when a business invests in master data management tools.

Author's Profile

Jesica Banks has immense experience in the field of material master data management. She writes articles to spread awareness on the advantages of MDM.

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