The term “supplier master data” refers to vital information about the suppliers with whom you work. Although this information appears to be straightforward to maintain on the surface, things can easily go wrong if there isn’t enough care or attention to detail when entering and maintaining supplier data.
All critical information about your suppliers who are part of your strategic supply chain portfolio is referred to as Supplier Master Data. This information (e.g. contacts, addresses, bank details, etc.) may appear basic and simple at first sight, but there is an underlying complication that many organisations overlook: the maintenance of features across many systems and apps.
Supplier data usually contains important data, such as:
- Contact information/business point of contact
- Location / regional information (very important if the supplier has business/offices in multiple areas or countries, etc.)
- The goods or products delivered by the supplier
- Legal information of the suppliers
- The supplier’s necessary certifications
Naturally, collecting and maintaining supplier information is not a one-time task that can be completed and then forgotten.
Supplier data management practices must be established in order to preserve the quality of supplier information over time and minimise difficulties caused by poor data (as well as the requirement for frequent data cleansing).
Why is supplier master data so important?
Supplier Master Data Management (SMDM), also known as supplier information management (SIM), is critical since it encompasses more than just keeping authentic supplier data. It enables you to utilise that information to answer critical questions and confidently report to other units of the business.
For example, if you want to have a clear insight into what you’re spending with suppliers and how they’re performing and then subsequently make intelligent decisions based on that information, you’ll have to implement a robust supplier data management process.
3 business benefits from supplier master data
- Single Version of the Truth
Without an online platform like SourceDogg, supplier information is most likely distributed across many platforms and divisions inside any business. When staff must make manual changes in various systems regularly, they are more likely to make mistakes. For example, one department may have correctly named the supplier The Kroger XYS Company, while the other may have simply labelled the company Kroger. While each department may be aware of the differences, this leads to the creation of two distinct supplier records. Establishing a data governance strategy for your suppliers will help you to keep clean and reliable information of your suppliers, resulting in significantly easier business transactions.
- Ensure Compliance
New standards are always being established in today’s technology-driven economy. Important governmental regulations apply to the daily operations of many companies. Although your business may not use anyone without certifications or accreditations directly, you must also ensure that your suppliers do not use them, either.
Your business might be at risk for non-compliance if you don’t know who the source suppliers are. If a business is placed on the ineligibility list and you already have a whole pallet of ketchup produced using their supplied tomatoes, you may be in for a problem. When regulations and policies change, having a clear, trustworthy, end-to-end view of the supplier data in place makes it easier to adapt.
- Strengthen Supplier Relations
If your company is highly dependent on its suppliers, the relationship you have with them is critical to success. The way you handle your information about them and their performance is an important part of that relationship.
Using data governance and tailored business processes, you may work more closely with your suppliers to ensure that their data is valid and in the right format by establishing a single, unified view of supplier data. It’s also easier to track performance, manage contracts, and even provide self-serve access to specific sorts of supplier data with a single supplier record. This can help save money and improve efficiency across your whole supply chain.
Similarly, establishing a centralised hierarchy of your suppliers and their parent businesses helps you to have a more comprehensive picture of your network, allowing you to improve your procurement, contracting, and engagement efforts.
Supplier Master Data: Key Business Processes
- Supplier Onboarding
This is how a company starts a new business relationship with a supplier. If it is new for the entire company, then a new supplier is set completely from scratch. If the supplier currently operates in conjunction with one of the businesses, it could be an extension of the supplier.
- Updating Supplier
This is the procedure through which an existing record is updated. This can affect the common global/central data and will require some kind of global governance body to do so effectively – it won’t always be an efficient strategy for every team who uses the supplier to approve an update. A better way is that a supplier can make changes via a portal.
- Supplier offboarding
This is usually referred to as Supplier deactivating, however, the user requests to deactivate the supplier and afterwards approve and update it to properly lock it in the respective systems.
- Reactivate Supplier
This process is often overlooked but, let’s say, a supplier has not been working for the previous three years and a business wants to reuse it immediately. Would it be used by the organisation? Perhaps not. Many things would have changed during this period and the reactivation process in most circumstances is quite similar to the initial on-board supplier, because the data, certifications etc., would have to be kept updated and legitimate.
Supplier Master Data Challenges
Most businesses already gather master data from their suppliers, but many still struggle with it. That creates a significant business impact.
There are seven major supplier MDM challenges:
- DATA SILOS
Different kinds of data sources are utilised within and outside the company. Because data is kept in the unlinked (legacy) systems, duplication, omissions and inefficiencies are created.
- DATA QUALITY
Incomplete, insufficient, and incorrect data was utilised within the company and transferred to various channels. Unstructured data can make your entry on new channels and markets complicated or even blocked.
- DATA ERRORS
Manual entry results and poor data sources cause data errors. They are then magnified or amplified throughout all the channels from your ERP and CRM and possibly to marketing catalogues and e-commerce websites. As a result, your teamwork, customer service, returns and communication suffer.
- DATA SYNDICATION
Failure to regulate what data is transferred to which channel leads to product data that may vary per retailer or supplier.
- LOSS OF TRUST
Not knowing whether parts of your data are old or inaccurate is a problem in data. Traceability is poor throughout the product life cycle.
- CUSTOMER EXPERIENCE
Due to a lack of accurate and reliable master data, your customers’ interactions could also be inconsistent. It’s impossible to create an Omnichannel experience.
- LACK OF DATA GOVERNANCE
Data governance is nearly impossible without a centralised data infrastructure. This makes it almost impossible for your company to completely comply with regulatory compliance and safety standards.
All of these issues arise from the lack of a central repository for creating and sharing a single version of the truth. These issues will become less of a problem if a company uses only one master data record that is constantly improved in terms of accuracy, traceability, and consistency.
Outperform the Competition
“Data is the new oil” so mastering your data is the key to offering relevance and value in the information era.
Customers will be happy doing business with your company if your decisions are consistently strong due to being data-driven. With MDM in control of your master data, you can outperform the competition with better, quicker, and more consistent results.
Sourcedogg’s Supplier Master Data Management solution minimises the time, effort and technology required in manually gathering supplier data and is a unified solution in multichannel operations to manage organisation-wide supplier master data. Supplier MDM allows the maximum integration of data from suppliers across all of your business processes.
As a result, all interactions among suppliers are gathered, rectified, standardised, stored and shared, enabling the general visibility and monitoring of risks for procurement and supply chain experts.
Supplier MDM not only increases desirable outcomes of compliance audits; it also gives confidence for stakeholder decision-making in a company. Your business should consider a Supplier Master Data strategy, it’s not just for the manufacturing sector.