What is Product Master Data?
Put Simply, a Product Master Data is a collection of all product-related attributes and information that rests in the master database in any given ERP system.
To ensure a unified and accurate view, MDM (Master Data Management) data integration plays a crucial role by streamlining the flow of data across various systems, ensuring consistency and reliability in product information.
A product master helps provide a unified view of all product-related information and ensures consistent information across CRM (Customer Relationship Management), ERP (Enterprise Resource Planning) and PIM (Product Information Management) systems in the organization.
A product master combines data from the item master and material master to create a comprehensive product profile. While the product master covers product attributes and specifications, the item master delves into specific inventory details such as part numbers and stock levels, and the material master details the raw materials and components used in production.
Together, these elements form an all-encompassing view of product and material information, ensuring that enterprise master data is accurately managed across all relevant systems. For more information on strategies for ERP data management, refer to the article here.
As organizations scaled, a high volume of product data was generated across different departments and silos. Quite often, gaps in various processes and an absence of data management and governance practices led to “dilution” or “contamination” of this product data.
Thus, the need for a centrally managed product master database became immediately apparent among leading enterprises worldwide and major ERPs began developing out of the box solutions for PMDM within their offerings.
For example; SAP launched PMDM, a set of features that can help with product development and change processes, and similarly other vendors that launched their MDM tools to help businesses implement the master data management solutions, including product master data as one of the data domains. It helps centrally manage and govern product-related data and integrate the same across internal and external systems
What Fields are Available in a Product Master?
Here are a few examples of fields made available in a Product Master Data instance in any ERP within a company.
These are a few standard examples of product-related data-points that are typically available. These can vary based on the ERP, company industry.
Why Do Companies Maintain One?
For smaller operations involving lean teams and fewer product lines, maintaining product information centrally is not much of a challenge as most teams work in a fairly cohesive manner and product information is stored in a relatively simpler manner.
However, things get far more complex with enterprise companies with over $100 Million in yearly revenues. In these situations, the management of data across various platforms—like CRM systems, ERPs, and external databases—becomes even more complex.
Inconsistencies or mismatches in the availability of data can hamper key processes and lead to inefficiencies in supply chain and go-to-market functions. Cloud Master Data Management (MDM) is where such issues are resolved.
With cloud MDM solutions integrated with ERP systems, organizations can have real-time access to accurate, consistent, and single-source product data. Cloud-based MDM offers centralized control that brings multiple data silos together, enabling enterprises to manage data integrity with ease, enhance collaboration between teams, and take data-driven decisions.
In industries with high distribution, where an extensive product range is concerned, a cloud-based PMDM solution offers effortless data governance, with enhanced control of product information, streamlined inventory management, and optimal supply chain processes, all the while lowering costs and risks.
An oil and gas firm was experiencing inconsistent product information for key items such as drilling fluids, pipelines, and chemicals. For instance, pipeline materials were recorded with varying grades and specifications, like API 5L Grade B and API 5L X65, in procurement, inventory, and maintenance systems.
In addition, the chemical data of the company was disconnected, and different viscosity levels were recorded for drilling fluids, while safety data sheets (SDS) of chemicals such as Xylene and Methanol were not consistent. This resulted in procurement delays, project performance, and regulatory compliance reporting.
The company addressed these challenges by introducing a Product Master Data Management (PMDM) solution. This consolidated all product information, normalizing important characteristics like pipe size, thickness, material type, and chemical content.
Every product was assigned a distinct product code, and all associated data—like pressure ratings, viscosity ranges, and safety handling—was synchronized across systems. The PMDM solution integrated with the ERP and procurement systems, providing real-time updates, preventing duplicate entry, and imposing data validation rules.
Through this, the company experienced substantial improvements in procurement accuracy, project scheduling, and regulatory compliance (e.g., OSHA, EPA). The combined product data also allowed for improved pipeline maintenance scheduling, minimized safety hazards, and ensured that drilling fluids had defined viscosity for maximum performance during operations.
Challenges in Product Data Management
Most companies aren’t able to warehouse and manage product data in a central repository due to a whole range of issues, which underscores the importance of PMDM. The reasons for that are detailed below.
Lack of Data Standardization: Complex organizations that work in silos typically use varying naming conventions, Units of Measure and formats for the same product, this can make centralization of the data quite difficult
Data Governance & Ownership: Every data record that is updated into the system should ideally be vetted for duplicates, mandatory data points, validation systems and should have an approval system in place that clearly charts out accountability and ownership to make the most out of the product master. – these processes and systems are non-existent in companies who haven’t thought through their product master in detail earlier
Technical Complexities: We’ve mentioned earlier that maintaining data across systems for one unified-view is one of the main goals of PMDM. However, this can be technically complex to implement requiring cross-platform expertise.
Scalability Issues: It’s relatively straightforward to maintain a product master for a company with finite use-cases. However, as the size and complexity of the data set increases, the effort towards governance and management of the data is simply not commensurate, leading to challenges with scalability.
Multiple Product Variants: Large-scale enterprises can have thousands of products that have numerous variants (e.g., size, color, pack). It may be a bit difficult to manage these variants and ensure proper data is tied up with every variant.
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Strategies for Product Master Data
In-principle, the strategy for streamlining product master data management is not too different from a generic master data management implementation strategy, which primarily involves 3 key pieces.
Several master data platforms offer out of the box data governance solutions that also include modules for Product Data Management as well.
What are the Benefits of a Product Master?
Organizations globally try to make the most of a product master, primarily to realize the benefit buckets we’ve detailed below.
Supply Chain Operations
Easily one of the most sought after benefits of maintaining a product master. Here are a few supply chain processes that can benefit from this.
Procurement Process
Well-managed procurement master data including Material Master Data in SAP, is key to optimizing procurement processes. Some of the benefits are listed below:
Procurement Accuracy: Standardized product data ensures procurement teams order the correct items, reducing errors and mismatches in purchase orders.
Efficient Manufacturing: Precise BOM (Bill of Materials) data ensures production runs are error-free, minimizing downtime and material wastage.
Logistics Coordination: Accurate dimensional and weight data of products enables optimal freight planning, reducing transportation costs and delays.
Inventory Management
By implementing the right strategies for managing the inventory master data, the supply chain operations are optimized resulting in following advantages:
- Demand Forecasting: By providing a clear, accurate view of product attributes, historical trends, and stock levels, PMDM enables better demand forecasting, reducing the risks of overstocking or stockouts.
- Safety Stock Optimization: Ensures inventory buffers are calculated accurately based on reliable data, minimizing excess storage costs while maintaining service levels.
- Cross-Channel Visibility: Supports real-time inventory tracking across warehouses, distribution centers, and retail locations, facilitating optimized allocation.
Product Management
Lifecycle Management: Maintain accurate product data throughout its lifecycle, ensuring smooth transitions from development to discontinuation. This helps teams stay aligned on product status and next steps.
Innovation: Use detailed product performance data and customer feedback to identify opportunities for innovation. This enables rapid adaptation to market demands and trends.
Collaboration: Ensure alignment across product, marketing, sales, and customer service teams by providing access to the same up-to-date product information, promoting effective decision-making and seamless operations.
Vendor Relationship Management
While these benefits may not be immediately obvious, a seamless and planned PMDM, along with an up to date and reliable vendor master, can significantly improve procurement efficiency, reduce operational risks, and ensure that your supply chain operates smoothly and cost-effectively.
There is a separate module for managing supplier master data, which plays a crucial role in streamlining procurement processes and improving supplier relationships. By integrating this module with other systems, organizations can benefit from:
- Standardized Supplier Communication: Clear product specifications minimize misunderstandings or errors during procurement negotiations or order placement.
- Supplier Performance Tracking: Product master data can link with supplier performance metrics (e.g., lead time, defect rates) to evaluate and optimize vendor relationships.
- Improved Sourcing Decisions: By maintaining a unified view of product specifications and supplier options, procurement teams can identify cost-effective alternatives or dual-source critical items.
Demand Planning
- Alignment Across Supply Chain Tiers: PMDM ensures all tiers of the supply chain operate with the same understanding of product attributes, reducing bottlenecks.
- Fewer Fulfillment Errors: Correct product information minimizes shipment errors, improving on-time delivery rates and customer satisfaction.
- Dynamic Replenishment Planning: Supports data-driven decisions for stock replenishment based on real-time insights into sales trends and inventory levels.
Leveraging Artificial Intelligence in Product Master
Like with most org-wide functions, Artificial Intelligence is changing the landscape in PMDM, and across Data Management in general. This change is primarily effected through a far more accurate, effective and most importantly, less time consuming process for ensuring master data excellence.
Here are a few instances where on how Machine Learning models are breathing life into an otherwise manual and tedious process of achieving master data success.
Automated Data Cleansing
A trained model, especially one that has historical context of industry-specific product data can do a far better job at correcting individual master data records in the following 3 areas.
Automated Enrichment
Procurement, Operations and Product teams typically rely on master data records to have full context of a given product records. During the course of creating and editing the records however, some key information points simply aren’t updated due to human errors, systemic issues or due to unavailability of information.
An intelligent and well thought out product master solution can now leverage AI-modules for enriching information from first party sources, third party databases or through web-enrichment.
Product Data Classification or Normalization
One of the key issues faced in master data management pertains to unstructured data – that is data written in unstructured fields like “short description” or “long description”
This makes it tricky to make decisions at scale since automation and analytics softwares generally rely on structured data fields to operate effectively.
Any worthwhile product master solution can deploy AI solutions to parse data and extract key attributes, units of measure and other key information points and map them automatically to relevant fields and create “tasks” for category managers to “review” and “accept” before being deployed into the production version of a master database.
Conclusion
Efficient Product Master Data Management (PMDM) is essential for enhancing business operations, from sourcing to inventory management.
With proper product data, corporations can simplify the supply chain, minimize operational waste, and achieve improved sourcing decision-making. Besides, accurate product data is a key element of logistics, achieving correct shipment, minimizing fulfillment failures, and rationalizing transportation cost.
Having in place a well-organized PMDM system not only improves in-house operations but also enhances logistics, making delivery processes even smoother and cheaper.
Frequently Asked Questions
What is an example of a product master?
A product master record warehouses all information that pertains to a single product -Example: for a chocolate bar, the raw materials (cocoa, milk, palm oil), cocoa suppliers, distributors, machinery and spare parts are all information points that will be stored in the product master.
How to create a product master?
Different ERP systems have different methods for creating or updating a product master that will be listed in their documentation. Here are a few popular ones – 1. SAP Product Master 2. Oracle Product Master 3. Informatica Product Master
What is the difference between PIM (Product Information Management) and Master Data?
A master data or a product master data warehouses comprehensive information about a product including but not limited to its suppliers, raw materials required, packaging information, equipment’s required etc. PIM, on the other hand has to do more with information pertaining to merchandizing, marketing, promotions and distribution of products.
How is Product Master Data Managed in SAP?
SAP manages product master data through tools like Material Master in S/4HANA and SAP Master Data Governance (MDG). These tools centralize data creation, ensure accuracy, and integrate product information across modules like Sales, Procurement, and Production. Features include workflows for approvals, duplicate detection, and real-time updates. SAP also supports data enrichment and lifecycle management, enabling seamless integration with third-party systems and ensuring consistent, high-quality data across the enterprise.
Which Softwares OR Solutions can be used for Managing Product Master?
Several software solutions including Verdantis’ Integrity© and Harmonize© aid in solving critical product master data challenges – this post also details the leading software solutions for master data management
