The Invisible Bottleneck: Why Master Data Quality Determines Operational Success

Generative AI promises to transform supply chains. But if your master data is broken, you're just automating chaos

There is lot of excitement with generative AI transforming SCM processes, automating manual work. Well, opportunity is certainly there, but true benefits do take a lot of effort. How have your new technology implementation projects worked out, which have succeeded, which seem to bring no tangible outcomes?

Getting basics right first is key to the results. Often overlooked area is the master data quality in the corporate tools. Reflect honestly, do you have verified analysis of your ERP data correctness? What is your assumption on the data quality, single percentage variations perhaps?

I challenge you to have a chat with any leading AI companion to familiarize with research findings on data quality and more importantly related business impacts. Spoiler alert, results are consistent and truly shocking. As example BOMs are indicated to have 10% error rates, it’s common to have 20% of duplicate master records, changes are not updated leading to out-of-date pricing, lot sizes, lead times etc.

In Lean philosophy catching quality issues at origin is essential. Why? This is because of the “1 – 10 – 100” rule for costs. As the issue travels downstream, every step in value chain increases the cost to fix it by 10 times. Same is valid for master data, poor quality drives material negative cascading impacts to business. Referring to chat results above, estimation based on academic research points up to 20% productivity loss, 15-25% revenue leakage and never mind the reputation damage on missing orders, delivering wrong products. It’s a mystery for me why this does not gain more attention?

In Zeal Sourcing we have decided to roll up our sleeves to tackle master data quality endemic. As every leader is challenged to deliver fast tangible outcomes from AI and technology implementation in general, we believe this is great area to focus with fast concrete results.

Few questions for your consideration. Do you know your ERP data quality? Would you be keen to gain leap in productivity? Would it be beneficial to have right contract prices, lead times and payment terms utilized in POs?

We at Zeal Sourcing are looking forward to help and learn with you how to tame this monster. Let’s have a discussion!