With the inevitable fluctuations in consumer demand, market disruption has become a common occurrence. This trend has historically caused large market leaders to crash and burn while some underdogs rise to take their place. Considering this intense atmosphere and ambiguity, companies are under pressure to increase efficiency and boost output in a timely manner. The most common routes taken accomplish this are through M&A or by outsourcing. While investing in these decisions may yield a breadth of opportunities, there are many potential challenges that may arise. Of the many possible problem areas of focus, one of the most significant includes enterprise resource planning integration and effective data governance.

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One of the tools that companies can utilize in complex scenarios is SAP Master Data Governance Module (MDG). SAP MDG is state-of-the-art master data management solution that offers central governance to change, create, and distribute master data. It also functions to consolidate master data across the complete enterprise resource management landscape. Additionally, SAP MDG uses SAP Analytics cloud to provide a dashboard showing Realtime data abstracts on data quality along with history of master data quality.

Why SAP MDG?

The main hurdles and warning signs that companies are facing often go overlooked, and force the system into a negative feedback loop that results in continuous decrease in output. Using CMOs and CMDOs requires companies to share lengthy data with each other. These processes of data sharing and integration add more complexity to the company’s system e.g., by creating duplicate data or different versions of data that result in an overload. This can be commonly rooted in a company’s choice to outsource the delivery of online purchases to a vendor.

Scenario 1:
If a solid, consistent record of customers is not properly managed and shared with the Vendor Standard of Master data, delivery issues are likely, including: delayed deliveries, delivery to the wrong address or no delivery at all.

Scenario 2:
Another example issue that may arise is with different material numbers logged in Company and Contract manufacturer. This is bound to cause inventory visibility issues that then domino effect into a larger problem involving an incorrect forecast of procurement or production of materials.

These scenarios can become even more problematic for a company that operates on many continents with multiple CMO and vendors. A single mistake in data logging or faulty master data can trigger a chain reaction of catastrophic events, ultimately leading to company-wide failures.

The Warning Signs

It is unquestionably important for companies to be cautious of the master data warning signs. These signs are often mistaken as issues in the business process, subsequent energy is directed at tackling the wrong source. These hidden warning signs can help companies preemptively eradicate problems and leverage the full potential of their ERP. The places to look include:

• Delayed manufacturing affecting ATP (available to promise) dates for customers or another CM
• Reported Quality from CM for materials used during manufacturing
• Faulty inputs during Good Receipts (GR) delaying GR process at the CM
• Billing inconsistencies from CM or Supplier
• Poor visibility of the providers for materials needed for CMs – raw materials, semi-finished
• Discrepancy in payment items causing cash flow issues
• Confusion surrounding inventory available by CM location
• Troublesome or confusing customer return process

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To conclude, there are many issues that may arise in the continuous effort to overcome ambiguity and conquer market disruption. Companies looking to merge, acquire, or invest in outsourcing must be prepared to eliminate big data risks that pose a threat to the system. SAP MDG is an excellent tool that can help drive company-wide consistency, accelerate operations, and reduce the costs associated with data. To learn more about the benefits of SAP MDG, click here.

Contributions by Alexandra Hatsios