In the digital world, reliable and valid data must be provided both within a company and across companies. One of the main problems with data exchange is the lack of structure and low quality of the item master data provided. The reason for this is that data is not always exchanged in Excel formats or via interfaces across multiple systems; PDFs are still sent or even documents are sent in paper form. If the product data is not stored digitally, the retailer has to enter it manually into their system. This results in a lot of work and a high error rate, which has a negative impact on the quality of the product master data.

What is master data?

Master data is data that contains basic information about operationally relevant objects (e.g. customers, suppliers, products) and is changed relatively rarely. It is therefore relatively static. Such data could be ID, designation, address, name, founding date, e-mail, telephone number, postal code, etc. This data is not updated regularly, but periodically.

Master data differs from transaction and inventory data. Transaction data is data on orders, purchase orders, payments, reminders, etc. This data is in constant motion. This data is in constant motion - new data records are constantly being recorded. The transaction data creates the basis for the inventory data, as this changes as the transaction data is processed. Stock is a good example of this.

What is item master data?

Item master data is basic information about an item, i.e. data that characterizes a product in the long term. This can be supplemented over time, but only rarely changed (e.g. to correct errors). The item master contains information on all items that a company procures or manufactures, stores and sells. This information is stored in individual item master records for each item. This data record contains all the information required to identify the product later in the catalog, e.g. when placing an order.

The item master data contains various information from the Global Product Identification Number GTIN to prices, properties, product images, etc. This includes all sales-relevant data. This includes all sales-relevant data for the respective item, including data for writing offers and displaying products on websites, in product catalogs or in apps.

The item master data includes information such as this:

• Basic data (item name, EAN number, dimensions, technical data, description, media such as product images or videos);
• Logistics data (delivery time, country or company of origin, packaging size);
• Purchase data (purchase price)/sales (stock level, sales price), etc.

Maintained item master data is often stored in a ERP system and forms the basis for all merchandise management processes.

Challenges and benefits of item master data management

The demand for reliable item master data is constantly growing. The reasons for this are new standards, legal changes, high consumer demand for information, etc. Item master data management is used to optimize the business process. It has two objectives: to increase data quality and to ensure the availability of item master data.

On the one hand, item master data management constantly presents companies with new challenges. The biggest challenge is to optimize and maintain item data along the entire value chain, as the data must comply with legal and operational requirements.

Item master data management can take place in a separate system such as a PIM system or an MDM system and generally offers several user benefits:

• Reduction of maintenance effort and costs,
• The data is simply transferred and imported into a central data source,
• errors in item master data and subsequent processes are minimized
• data quality increases as manual data transfer is eliminated
• collaboration with business partners is optimized
• new item can be easily created or imported at any time.

What role does item master data quality play?

Studies indicate that almost 50% of companies still maintain their item data distributed across several systems. This means that the biggest problem in obtaining item information is the high amount of work involved in synchronizing the data. The effort involved increases enormously, especially when there are several sources and different formats of equally different quality. The provision of high-quality and up-to-date item master data is a crucial prerequisite for efficient business processes within and between companies. If the quality is poor, data exchange will be problematic, error-prone and time-consuming.

Examples of poor quality are errors in the item master data (such as incorrect weight, incorrect dimensions) or incomplete content (incomplete technical product description, out-of-date prices). All of these can result in high costs for the company. It is therefore important for a company to create a quality standard to which everyone adheres. All such problems can be solved with the introduction of a PIM system.

Conclusion

Valid, complete and digital - this is how item master data should be maintained, as it forms an essential part of many business processes. Qualitative data makes digital communication with business partners and consumers easier, faster and more informative. Retailers have access to up-to-date item data and can automatically enter it into their systems using interfaces. The analysis of existing item master data quality and its improvement by means of cross-company master data management is becoming a critical success factor.