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Gartner Reports

Digitizing master data and optimizing processes.

Industrial companies are optimizing their entire supply chain and logistics is increasingly becoming the focus of value creation. For warehouse management systems (WMS) to be used effectively, master data has to be entered consistently and updated regularly. If you want to increase the efficiency of your logistics processes, generate savings and minimize the frequency of errors, you have to rely on smart solutions to enter, evaluate and pass on master data.

Digitizing master data and optimizing processes

If you want to increase the efficiency of your logistics processes, generate savings and minimize errors, you have to rely on smart solutions to enter, evaluate and share your master data. We explain what master data is and the data you need and provides some tips to set your company on course for functional master data management. You can also download our checklist, included with the whitepaper, and find out right now how well you are doing with master data entry and analysis for your logistics processes!

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Master Data – the definition.

Master data is information that describes a stock item and helps to classify it and find it again later. It describes the specific characteristics of products, which affect how they are handled within the supply chain. How many parts do I need in stock? How many parts can be kept in the warehouse? When do I need to replenish stock? You cannot answer these questions without complete information for your inventory. Item information, such as dimensions, weight and – in the best case scenario – a photo that can be used to identify the item also tell you about the suitable storage location. Fast movers (items included in 80 percent of orders) need to be particularly easy to access. There are also legal restrictions to be followed, not least for safety reasons. Rules such as bans on mixed storage or the requirement for batch splitting, for example, specify what goods must be stored where and how. Once such information on products and storage locations is carefully documented, the WMS can optimally manage the logistics processes.

Process optimization using logistics software.


What are the consequences if master data is not properly maintained?

The worst case scenario in the warehouse is that an overloaded shelf collapses. Obviously, the shelf has been filled incorrectly. But how did it happen? One possible reason is that the shelf capacity or the weight of the items were not stored in the WMS. The second possible explanation is that the company is not using a WMS at all to enter and coordinate the weight of goods and the capacity of handling units.
Properly functioning warehouse planning is not possible without access to the master data, such as the weight or the size of items/warehouse objects. IT systems can only be used appropriately when the master data is available. The majority of the functions and options provided by a WMS are left unused while basic information is missing. A suitable WMS can considerably simplify and shorten the time-consuming process of data entry. For example, you can run a preliminary calculation on a sample with analysis functions for maximum efficiency when using the data.

Why is master data management often neglected?

Entering and continuously updating master data is time-consuming. And it is precisely what puts off a lot of companies. Master data management is perceived as an annoying task, and logistics managers often recruit students for the job. The result is incorrect and incomplete data. The potential benefits of properly functioning master data management are often overlooked. Master data is really the basis of Logistics 4.0 – a field in which a lot of businesses still have catching up to do, as a recent DHL report on digitalization in the supply chain demonstrates. Of 350 supply chain and operations professionals surveyed, 95% are not making optimal use of the possibilities of digitization, for example in the area of information technology and analysis tools. Over 75% of professionals recognize the potential cost reduction and process optimization benefits of information technologies, but feel they do not have sufficient support in their company. The potential of networking has already been recognized in highly competitive sectors such as automotive spare parts and retail, but the full potential is still far from exploited in such sectors – because no master data is entered. One reason for this is that many companies do not know how and where to start with master data management.

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