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Is it Easier to Produce a Quality Customer Product or Quality Business Data?

By Philip Franz March 27, 2017 by Kelly Kuhlman
SAP-Centric Supply Chain

By Philip Franz

The answer to this question depends on who you talk to in any organization.  Organization employ many people whose job responsibility is to provide research and development, product engineering, manufacturing, quality and logistics. The focus of all of these roles are to ensure a quality product to the customer.  Unfortunately, few companies understand how to create and manage quality business data.  Unlike quality customer products, quality data doesn’t just happen because quality data is needed. Without quality business data, supply chain planning and execution is extremely constrained and inventory, labor and transportation costs increase over time.

Information Technology’s is not responsible for Business Data Quality

The Information Technology function within an organization is responsible to support business needs. Part of this support is selecting and implementing software applications to improve the effectiveness of business processes.  The Information Technology function IS NOT RESPONSIBLE for business data quality.  When companies began implementing integrated software solution prior to Y2K, business quality became a limitation.  The fact that your ERP solution is integrated is both a blessing and curse.  Low quality data in an ERP solution affects all business function and all business processes it supports.

Business Functions owns Business Data Quality

Business people enter data into applications every day to support business processes.  The quality of the data is affected by many factors including the initial accuracy of the data and the fact that most business data is dynamic and changes over time.  As supply chain consultants, we see many organizations treat business data as static and not in need of ongoing maintenance.  When we examine their Master Data we see that much of their Master Data is incomplete and has not been changed since they implemented their ERP solution years ago.  In our supply chain optimization engagements, we see incorrect lead-times, wrong batch sizes and incorrect MRP controllers as impacting product and material planning functions resulting in excess and obsolete inventory.

How does a company improve and maintain the Business Data?

Improving business data is not a business project.  Rather, it is an ongoing development and maintenance discipline that needs to be imbedded as a daily process. Master Data are the rules to run a business and when business variables change, and they always do, the rules (Master Data) must change to align with the new reality.  World class organizations establish formal business governance programs to monitor data quality and work with business data owners to ensure the quality of the data is improving. These companies understand and value their business data and they understand the inter-connection between high quality business data and business results.

Summary: Business data needs business owners

Like the multiple business functions that are responsible for new product development, multiple business functions within an organization and between supply chain partner are responsible for creation and the ongoing maintenance of quality business data. Business conditions change requiring business processes to change. Updating business data is critical to address these changes and need to be owned by those closest to the changes, the business.

 

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