Multiple factors contribute to a company’s success or failure, including operational decisions and financing. One way manufacturing companies can reduce their business risks and increase operational efficiency is by utilizing master data management software. Here you can learn more about master data management (MDM), how to manage inventory with MDM, and how MDM inventory management benefits your company.
What is master data management?
Master data management refers to collating information from multiple data streams. With master data management services, companies can effectively integrate data from all sources to ensure they base their business decisions on comprehensive, accurate data. MDM software draws from all information sources and combines the information to make it usable, and more streamlined for busy users. It can generate detailed case analytics about sales, staff, clients, and operational processes, which can help you improve operational efficiency, and put best practices in place.
What is inventory management?
Your inventory is the collective term for the items you have in stock, or a specified storage location. Inventory management also encompasses items that you have ordered and sold. It isn’t limited to simply what is on hand, although you can extract that data. Inventory management refers to the entire process of acquiring stock or supplies, receiving them, and then using, selling and distributing them.
Inventory management involves locating inventory, identifying suppliers, and tracking customer satisfaction. For example, your company may need self-sealing washers to assemble products. A regular self-sealing washer may be suitable for some merchandise, but you may need self-sealing lock washers for other products. Self-sealing lock washers have teeth. The teeth on a self-sealing lock washer enable it to attach to the fastener head and prevent the washer from coming loose. Effective inventory management ensures you know how many self-sealing and self-sealing lock washers you have on hand, and what current and upcoming projects they’re needed for.
How does inventory management benefit your business?
If your company runs out of any supplies that are needed to manufacture products, you may have to suspend work on that line, which can be expensive. You may have to assign workers to different tasks, that aren’t as high a priority while waiting for materials. Suspending work on a product can also cause delays. If you’re under contract to deliver goods on a deadline, you may have to pay for overtime when the materials arrive to meet your deadline. This makes it more expensive to produce the goods, which will affect your profit margins. With effective inventory management, you can anticipate your needs and order sufficient supplies before running out of stock.
How does master data management facilitate inventory management?
MDM programs allow your business to draw from multiple data streams to anticipate needs, and determine timelines for ordering and using or selling stock. This information benefits your warehouse staff, management, finance department, and sales teams.
Warehouse staff can use this data to determine when to order stock. With a clear understanding of client needs, your warehouse team will anticipate supply needs and can use MDM to determine how long it will take to receive stock. They can also determine how long they should store stock before it’s used or sold. Using this information, your warehouse staff can prepare sufficient storage space for the materials. They will also be able to schedule staff to receive and unload the materials when they arrive. Ineffective inventory management can lead to overscheduling deliveries and storage shortages, and putting more strain on already busy users and workers.
Management can use reports from MDM to determine when supplies will be available to determine staffing assignments. Managers can adjust work shifts and be confident the required resources will be available to perform assigned tasks, and keeping the workflow swift and effective.
Your finance department benefits from master data management because they can identify the timeframes between billing clients and receiving payments, as well as the billing cycle timelines for the payment of materials. When materials are stored for longer periods, they cost you money. Your business will be required to pay for those materials sooner and provide storage space without recouping the investment in the supplies through sales. In that case, having the right product data will prevent unnecessary payments being made.
Sales staff secure contracts or orders, which generate revenue. With master data management, sales teams can accurately determine the length of time required to fill orders, keeping them from making unrealistic promises. They can also determine if operations are focused on a different contract, which could delay your company’s ability to start manufacturing a new item. Master data management enables your sales team to provide accurate information to clients, which promotes client satisfaction.