Two weeks ago I wrote the article “ERP software: a blessing or a curse?” about a number of prerequisites for the implementation of ERP software. In short, it is important that the software has the functionality your company needs, that your business processes are correctly “translated” into the software and that employees are given time and training to start working with the new ERP software.

What I didn’t write about in that article, is the importance of master data in ERP software. ERP master data contain all possible data on products, raw materials, customers, suppliers, production lines, warehouses, etc.  You might not be aware, but poor master data quality can be very costly… First of all, poor data quality causes inefficiencies: invoices get sent to the wrong address, purchase orders are being sent to late because the supplier’s e-mail address wasn’t changed in the ERP, trucks are overloaded because the product weight isn’t correct in the system… Hundreds of seemingly small errors with consequences that can be as small as resending an invoice, but also as important as a production line that stops due to late delivery of materials or heavy fines when the police picks out your truck to put on the weigh station.   When inventory parameters (safety stock, reorder quantity,…) are poorly managed, you will end up having too much inventory, tying up capital and risking to become obsolete. Or you end up having too little inventory causing stock-outs and inferior service towards your customers.

A lot of costly disadvantages related to poor master data quality, and yet a lot of companies are constantly struggling to get their master data correct.  How come? Perhaps, because managing master data is quite a boring activity for most of us.  Certainly when it is not clear who is responsible for the data, employees will quickly prefer other tasks over scanning through lists of thousands of records.  The fact that company managers/directors often underestimate the importance and workload of this master data management, does not help either.  If a salesperson exceeds his targets, he might get a pat on the shoulder from the director. But I haven’t come across much of directors who congratulate the master data manager for having  data in order.  Often these functions are too easily made redundant and their tasks divided among several others, resulting in a lack of ownership.

When implementing a new ERP software, the data upload usually gets sufficient attention. Often, however, there is no proper process in place to subsequently keep the data in order. Below I give you some tips to benefit from an up-to-date system also in the months and years after implementation:

• Provide a clear point of contact for the adjustment of master data: the fewer people, the better, but make sure that you have a backup in case of absence

• Create easy, short communication lines: avoid lengthy forms and approval procedures that cause annoyance and frustration

• Make sure you have sufficient reporting options: the master data manager must be able to create reports that help to proactively guide internal “customers”. An example could be a list of all products where the order quantity is left blank.  The purchasing department should benefit from going through that list and complete where necessary.

I am convinced that also your company can benefit from an efficient ERP software if the master data management function is well valued and has its place in the organisation. Hopefully, the above has inspired you to accept the challenge and tackle your master data issues. If you lack time or you don’t know where to start, do not hesitate to contact me at and we can discuss how I can help.

Did you like this article?  Every two weeks, I post another one on topics related to supply chain and inventory management. Don’t forget to follow me on LinkedIn if you want to stay posted!