← blog

Examples from real world: Some actual problems and related costs caused by incorrect master data

06/04/2018
Ordered and correct master data – information about products – is the cornerstone of successful electronic document exchange(EDI).If product data is standardized in format appropriate for each industry, it is easy to cooperate with trading partners.
 

Golden rule – first bring master data in order, and only then start exchanging business documents

 
In the real world though, data is usually not aligned, and a lot of time is spent correcting, explaining, re-transmitting the documents and returning the goods.
Here are two common situations that arise from incorrect data about products:

  • The same product code means one thing to supplier and another to buyer – product code shouldn’t be the only information to rely on in Electronic Data Interchange (EDI). Codes must be synchronized and standardized (using one of global standards, preferably). If this is not the case, buyer could be ordering one product and receiving another. Common mistake is when the buyer thinks he’s ordering 10 boxes of an item, and 10 pallets arrive. Buyer does not need excess goods, but if it has short life span, supplier has problems accepting returns. If supplier already had to decline another buyer, because of big order, costs and loses simply accumulate. All because of non-aligned product codes. The moral of this story is simple: first align and standardize master data and then start doing EDI.
  • Changes in volume or design of products – producers continually improve their products. Sometimes, this means minimal changes in packaging volume, different packaging because of new features and so on. For example, changing the height of consumer unit, automatically increases the height of transport unit, which in term increases the height of the pallet. Change in consumer unit is multiplied by number of layers in transport unit, and then again multiplied by number of layers on the pallet. If warehouse workers are not made aware of this change, fork-lift operator will simpy try to fit new pallet in the old position by applying more throttle. And soon, the entire shipment of crystal vases is reduced to a pile of shimmering ruble that someone is going to have to clean, incurring yet more additional costs. It is imperative to have up-to-date master data, and to have business processes in place which force all participants in supply chain to exchange these information.

 

Global master data synchronization network – GDSN – is reliable source of accurate product data, entered and maintained by producers, and available to trading partners around the world.

 
To prevent the described situations from happening, best tactics is to keep master data synchronized by using Global Data Synchronization Network (GDSN). This system is available to great majority of companies in the world. Through it, companies – big and small – synchronize master data about more than 24 million products. Integration of of this system into local IT system of the company does not require major overhaul of existing infrastructure, nor does it imply changes in business processes.

 

Business Technologies Ltd employs top experts with multi-annual experiences in master data management and EDI. Apart from being applicable in companies from all sectors, these systems are compatible with global standards, such as GS1. SyncGuide is certified solution, that ensures complete and accurate product information management, both within an organization as well as synchronizing information with trading partners. For more information about our products and services, please click here.

Leave a Reply

Your email address will not be published. Required fields are marked *