It might sound like the title to a bad B movie, but the flap of a virtual butterfly’s wings in Master Data Management could result, for example, in something of a tornado in a company’s warehouse inventory. Experiencing what is popularly called the butterfly effect, some hapless companies would be forced to agree—a relatively small event in the scope of things led to a proper kerfuffle on down the line because bad data wasn’t properly identified, evaluated and dealt with conclusively.
According to the online dictionary Wikipedia, chaos theory demonstrates that one tiny change in a nonlinear system can result in a very different outcome, a concept linked to Edward Lorenz, a 20th century mathematician. Lorenz repeated a computation with a rounded value for weather models that had originally included the number extended to six digits. The result of the second computation forecasted a completely different future than the first. Simply by rounding off the numbers, the projections amplified until the original model was totally eclipsed.
Of course, Master Data Management (MDM) is nothing like a weather system, but chaos theory abides and might possibly upset a company’s best intentions. Unmanaged data could be likened to the old parlor game of whispering a secret, repeating it from one person to the next until the last person in line relays the secret back to the group. Invariably, the secret reported at the end has little resemblance to the original tale.
If Master Data Management is held unalterably to the plumb line of truth, there would likely never be a problem as the data is accessed and transmitted throughout the company. But, without the infrastructure in place to make it a single core system of record, a virtual tornado wreaking havoc within company data may not be far off the mark.
The Golden Record
Master Data Management includes making sure that a business is always working with and making decisions based on a single source of truth: the golden record. Failure to set this standard for accuracy and all kinds of problems will assail a company. In other words, a data butterfly is vigorously flapping its wings and distorted information is proliferating throughout the company in ways management and other company stakeholders may not even suspect.
An issue that can arise with significant complications is a particular item not being in the warehouse when it’s called for and even though the Material Masters show that it is, in fact, in the inventory. Depending upon the item, this could lead to disaster. Every company has what are typically called critical spares. These are items that are absolutely indispensable to keep in inventory, either for company use or for customers who are depending upon them to have the item available when requested. Not providing the correct item when needed can effectively hamstring a company or even bring business to a screeching halt—likely with costly consequences.
Failure to participate in regular inspections regarding product viability for items sitting in the warehouse or provide required maintenance on a critical spare can also result in customer loss or fronting substantial dollars in an attempt to retain the customer if expectations aren’t met.
Even seemingly minor items can interrupt a company’s business. A valve used in heating and air conditioning might seem like a small thing, but if a company needs that particular valve on a blistering summer day to repair a waiting customer’s system and the only one sitting on the shelf is not usable because a warehouse employee dropped it and chose to just put it back in the inventory—too embarrassed to admit that the valve was subsequently damaged. The disappointed customer might just get a little hot under the collar, in more ways than one.
Safety is also a huge area for concern. When the part is misidentified by the people who order, receive, transport and request an item, things can get ugly fast. For example, companies always have first aid kits available in the warehouse to address inhouse safety concerns, as well as those stocked for customers. Suppose there is a basic kit including an eyewash to be used for those requiring mere eye irrigation. Perhaps there is also a similar kit that has a therapeutic eyewash for the employee dealing with caustic battery acid splashed into their face. Two kits, with two vastly different eyewashes for two separate issues. Now suppose that, mistakenly, both kits have been identically labeled. When the kits are put into play, some employees might be at serious risk for a medical issue that isn’t going to be treated immediately. That kind of mistake reaps all kinds of sorrow for the workers, but also for the company that has failed to adequately provide protection for their employees, with whatever implications that holds for the future.
Benefits of Top-Notch Master Data Management
- Lower operation costs: Differing versions of data may cause a negative chain reaction throughout the company: i.e. the butterfly effect. Keeping the data consistent saves money.
- Redundancies are eliminated: Collapsing data into one trusted repository reduces IT costs in overall network architecture.
- Deliveries can be made faster: Shared and reliable data speeds up the delivery process.
- Compliance is simplified: Regulations like HIPAA, PCI, CIPA, GDPR and others are more easily satisfied; standardizing data takes the headache out of required compliance reporting.
- Customer service is maximized: Quality MDM provides real-time customer engagement and opportunities for feedback.
- A 360 point of view: The golden record provides a source for marketing personalization and to identify web prompts for future opportunities.
- Business intelligence is optimized: A clear snapshot of all operations helps management target timely openings and spot global trends.
Master Data Management doesn’t have to be sabotaged by virtual butterflies relentlessly agitating company data. Our QuadraDot Six-Sigma Black Belt led team of consultants and Granite Material Masters™ software will quickly sort out your MDM issues. With four levels of engagement from which to choose, there is sure to be a precise level for your company’s needs. In all cases rest assured, at QuadraDot the butterfly net is out and we’re ready to restore calm to the chaos.