Why is Master Data Management (MDM) system crucial in supply chain organization?

27.02.2020 Angelika Siczek
red-lettered MDM white hexagon surrounded by hexagons with different symbols in red

The right MDM system is the key to achieve success in data management and to create a consistent and compatible database that will underpin the profits in an e-commerce store. Enterprises that provide supply chain services are responsible for master data about customers, products, locations, sellers and suppliers.

How MDM can help

Consistency in data management is crucial for the supply chain organization. Therefore, the leaders of this segment must carefully look at MDM systems and consider them as an implementation solution. The scale of e-commerce business turnover is increasing, and distribution networks are in a state of continuous development. The supply chain must therefore keep up with its partners.

An effective data management platform is at the heart of the supply chain’s business because it takes responsibility in storing and retrieving information. Contemporary companies of this type rely heavily on data management. If they are converted to information, they will give you an excellent insight into the relationships governing your e-commerce organization and can help you discover the right recipe for success.

Disadvantages of missing MDM

Usually, companies specializing in the supply chain operated on many different systems. They included enterprise resource planning (ERP), customer relationship management (CRM), finance accounting and storage systems. They all worked together to collect data. In theory, this arrangement is good, but if all these elements were not connected together, they formed disordered and ununiform data sets. This worked counterproductively for the entire supply chain enterprise.

The effect of a poorly designed platform are companies without adequate access to data, which also leads to unsuccessful cooperation with business partners. Most companies in the data chain segment have a problem with data availability because they are in silos in many different forms. This is because of inconsistent tools and standards, or simply because the information is incorrect. Fragmented and inconsistent data delay time-to-market value, increase the risk of bad forecasts and, as a result, unsuccessful trading strategies. They are the reason for errors in inventory planning and eventually reduce the possibilities of up-sell and cross-sell, i.e. the sale of a better product than intended by the customer and an additional product.

Advantages of having an MDM system

Express access to ordered and correct data is inseparable for proper communication with suppliers, partners, brokers, but also for product promotion and innovation. So how do you extract data that will affect the quality of services in the easiest and most efficient way? The answer may be MDM.

It is a tool to overcome most of the challenges of collecting and organizing data and creating a single database from them. It provides equal and secure access to information for the entire enterprise. It is equipped with the function of presenting data analytically in charts. It also has a user-friendly control panel. Supply chain organizations can use MDM systems to get rid of incorrect data and to digitize easily. Such an operation will be carried out consistently and in a specific standard.

One proper data source

IT companies now have more data than ever before. How can they be sure that they are ordered and organized to a degree that positively affects the quality of decisions? Data must be distributed over all channels. With increasing dependence on data, their complexity, but above all their overwhelming amount, the right platform becomes a pragmatic coercion. It will centralize and synchronize all data feed channels into a single database. Thanks to this, the MDM system enables consolidation and comparison of attributes and verification of information. It provides a precise picture of the behavior and needs of the customer and business partners exclusively for the e-commerce store owner.

Homogeneity and transparency

Silos in departments within the organization of the supply chain are still a big problem and the reason for data opacity. This, in turn, has a negative impact on management decisions, which should be based on transparency. Its increase would have a positive impact on the improvement of the company’s operations in each department.

A broad strategy based on the MDM system can act as a communication bridge between supplier systems and ERP and CRM systems. All attributes are in the system – product descriptions, bar codes, product quantities, cold chain requirements, supply methods, shelf life, size and color. A consistent database, maintained in every product marketing zone, is crucial for success, and browsing this information and drawing conclusions from it gives you the opportunity to create complete transparency.

MDM especially demonstrates its advantages during acquisitions or mergers of companies or departments. When accepting new partners, establishing cooperation with new suppliers, or when implementing a new system, the greater the transparency in the enterprise, the easier the operation is finalized. You can see the possibilities of increasing profits or improving the operation of internal systems and working methods.

Predicting trends and managing the range

Assortment management and forecasting go hand in hand. If both operations are carried out simultaneously, and even considered as one, customer satisfaction expecting immediate product availability will increase. The e-commerce store will then generate the feeling of a stationary store, where purchases can be made instantly, without waiting for the assortment to be imported. Appropriate management of the contents of the warehouse means quick distribution on many channels and shortening the time that the product must lie on the shelf.

Creating the right habits for supplying the warehouse on time improves the knowledge of the supplier’s inventory and responds to customer demand throughout the year. Appropriate database management using MDM results in lower costs, because greater precision in response to customer orders means greater satisfaction with purchases and a chance for the buyer to return to the store. Along with increased monitoring and assortment efficiency comes a better source of information for further planning and creating sales strategies.

Help in global operations

Trading operations on a global scale carry great risk, but also great potential for success. However, with increasing sales range, new legal regulations and more competition are coming. Another change will be a rapid increase in the amount of data collected. With the growing information chain, the number of nodes will also increase, and this will make collecting data between internal departments more difficult. Any inconsistency can result in large losses.

Supply Chain Risk Management (SCRM) is crucial in the face of international trade agreements, customs, laws, regulations and even social norms. MDM will ensure smooth cooperation with GSDN (Global Data Synchronization Network) systems by standardizing formats and standardizing internal databases. This will reduce the need for administrative work, and improve the accuracy of financial data and, as a result, accelerate transactions with suppliers.

Intelligent management and development

In times of widespread business integration on the market, managing the full delivery cycle in a dispersed manner based on many systems and standards is outdated. The remedy for the growing level of complexity in commercial operations is adequate fluidity of processes thanks to visualization of deliveries, optimization of the assortment and estimation of demand for the future. The answer to the challenges of the modern e-commerce market is a strong and maintenance-free database with real-time access, the ability to configure the degree of access, but above all – comprehensive data management.

MDM system built on a single platform, giving the possibility of continuous configuration, is a strong tool in the hands of a seller focused on development and success. Eliminating data silos and integrating information across multiple channels imperceptibly offers the opportunity to create a single portal that will meet all the challenges of modern e-commerce business. MDM will not only maintain a database continuously, but will also continually improve the overall state of management. The right MDM system will remove the huge burden from the shoulders of the seller, giving him time to improve services in other aspects.

Have a question?

Write to us

    PDF, DOC, DOCX, JPG lub PNG (max 5MB)



    Andrzej Szylar

    Chief Executive Officer



    Magdalena Paczyńska-Kamienik

    HR Manager



    Aleksandra Bielawska-Clegg

    HR Business Partner



    Michał Duława

    New Business Developer



    Katarzyna Zajchowska

    Marketing Partner