Data is the cornerstone that can determine a company’s success or failure. Maintaining high data quality is crucial for seamless operations and maximizing value creation. As asset-intensive and manufacturing companies evolve rapidly, the challenges of preserving good data quality grow in both scale and complexity. These companies manage material inventory data that directly influences daily manufacturing and factory processes. As these businesses expand, the volume and complexity of inventory and material data increase, making it more difficult to maintain a high-quality material master.
This article explores the origins of material data management, how it boosts organizational efficiency, and the data management strategies enterprises can adopt to achieve excellence in production, maintenance, and raw material management.
Evolution of Materials Management
Master Data Management (MDM) emerged in the early 2000s as organizations realized the importance of maintaining consistent, accurate, and timely data throughout their operations.
While initially focused on customer and product master data, the scope of MDM gradually expanded to include materials and MRO spares to enhance production and plant-level efficiency. This evolution gave rise to Materials Master Data Management (MMDM) as a distinct discipline.
The development of MMDM can be traced to several key factors:
MMDM emerged as a specialized field to address the critical operational challenges organizations faced in managing materials information. These challenges not only prompted the creation of MMDM but also continue to fuel its ongoing evolution.
Core Pain Points in Materials Master Management
One of the major challenges in managing material data lies in the sheer volume and complexity of inventory and electronic records. Poor data quality often stems from unclear processes, outdated technology, and subpar standards. Without defined procedures, manual handling, lack of accountability, limited visibility, and organizational changes such as mergers and acquisitions can lead to data becoming unreliable and unusable.
As asset-intensive companies grow, these challenges intensify, making the implementation of effective processes and advanced technologies crucial. Proper material inventory management is vital to ensure smooth manufacturing and factory operations.
When only inconsistent and unreliable data is available, maintenance and procurement teams struggle to maintain efficient operations, manage inventory accurately, and source parts promptly. This low data quality results in various inefficiencies and costly consequences for businesses.
Data Fragmentation and Inconsistency
Organizations faced challenges with material data being dispersed across various systems, departments, and locations. The same material was often labeled differently in procurement, inventory, maintenance, and accounting systems, leading to confusion, duplication, and operational setbacks. Without a centralized approach, companies struggled to identify a reliable “single source of truth” for essential materials information.
Inefficient Procurement and Excessive Inventory
Without standardized materials data, purchasing teams often reordered items already in stock but recorded under different codes or descriptions, resulting in:
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Duplicate inventories consuming valuable warehouse space
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Unnecessary capital locked in redundant stock
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Higher carrying costs due to excess inventory
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Expired or obsolete materials requiring disposal
Production Delays and Equipment Downtime
When maintenance teams were unable to quickly find the correct spare parts due to poor data quality:
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Critical equipment remained out of service for prolonged periods
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Production schedules experienced interruptions
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Emergency purchases at higher costs became frequent
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Overall Equipment Effectiveness (OEE) dropped significantly
Supply Chain Visibility Challenges
Inadequate materials master data caused blind spots within the supply chain:
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Difficulty in tracing material sources and specifications
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Inconsistent monitoring of supplier performance
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Problems forecasting and avoiding material shortages
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Reduced capability to optimize inventory management across multiple sites
Compliance and Risk Management Failures
Organizations encountered major regulatory and operational risks:
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Inability to precisely report on hazardous materials
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Difficulty adhering to industry regulations and standards
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Problems ensuring material traceability during audits or recalls
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Quality issues caused by the use of incorrect or inferior materials
Technical and Integration Challenges
As organizations implemented more advanced systems, poor materials master data became a major obstacle:
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ERP deployments failed to achieve expected results
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Advanced analytics projects yielded inaccurate insights
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Digital transformation initiatives were hindered by data quality problems
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System integrations grew more complicated than necessary
MRO Materials in SAP are the core components that support maintenance functions, helping avoid unplanned downtime by ensuring the right parts are available when needed.
Materials master data refers to the comprehensive set of information about materials used in a business’ operations, particularly in manufacturing and supply chain management, this is typically why it is also used in relation to MRO solutions, MRO Data Cleansing & Enrichment.
Why do Companies Need an Accurate Materials Master?
Considering the importance of the material master and how it directly impacts operations and decision-making, cleansing master data and maintaining it should be a priority for organizations. The rise of automation and machine learning in material master data management solutions has enabled sophisticated automated Master Data Management platforms and material software to cleanse and govern master data and maintain a high-quality, centralized material repository. A clean, high-quality material master comes with enormous qualitative and quantitative benefits for the organization:
A materials master is prone to errors much like other “Master
Data” types. Which means, over time, inaccurate data,
duplicates, unique items marked as duplicates, absent information
etc lead to business-critical issues such as “Maverick
Spend”, “Overstocking”, poor visibility into
supplier relationships and an overall mismanagement of the
production process.
The below-mentioned aspects are a few rudimentary data-points available in a “Materials Master”, and this underscores the importance of keeping one up to date.
MRO Materials in SAP are essential components that support maintenance activities, helping to prevent unexpected downtime by ensuring that the right parts are available when needed.
Materials master data encompasses the complete set of information about materials used in a company’s operations, especially in manufacturing and supply chain management. This is why it is often associated with MRO solutions, such as MRO Data Cleansing & Enrichment.
Basic Information
Material name, description, and type.
Classification
Categories or groups the material belongs to.
Technical Specifications
Attributes like dimensions, weight, and quality standards.
Inventory Details
Stock levels, reorder points, and storage locations.
Costing Information
Cost per unit, overhead, and pricing structures.
Supplier Information
Preferred vendors, lead times, and pricing.
The concept of materials master data is closely linked to enterprise resource planning (ERP) systems data management. SAP was among the pioneers in developing such systems.
SAP introduced the concept of a centralized database to manage diverse business processes, including materials management. Their software enabled companies to maintain comprehensive materials master data, streamlining operations and boosting efficiency across supply chain and production activities. Later, other ERP providers like Oracle and Microsoft adopted similar approaches.
In simple terms, organizations face various challenges that Materials Master Data Management (MMDM) helps to solve. Below, we outline some of these challenges.
Data Silos
Different departments frequently manage separate datasets, causing inconsistencies. MMDM unifies this data across functions to provide a single source of truth.
Inaccurate Data
Inaccurate data can lead to misguided decisions, costly mistakes, and reduced operational efficiency. MMDM applies data governance to improve data accuracy and dependability.
Inefficient Processes
Manual data entry and management are often time-consuming and prone to errors. MMDM automates these workflows, boosting efficiency and easing the workload for employees.
Limited Visibility
Organizations frequently face challenges with real-time visibility into material availability, which can cause production delays. MMDM offers real-time insights, enabling improved inventory management and procurement planning.
Many organizations have historically underestimated the critical role materials play in maintaining smooth supply chains. Often viewed as a non-core element, investment in material data management is frequently postponed until issues arise. However, this perspective is shifting as companies recognize the business value and cost savings offered by centralized, automated, and well-maintained master data. Technological advancements such as automation and machine learning within the Materials Master Data Management (MMDM) space enable solution providers like Moresco to revolutionize material masters through data cleansing initiatives and robust corporate data governance strategies.
Moresco empowers businesses to harness the full potential of their operations by streamlining processes, enhancing decision-making, and optimizing resource utilization. As a committed service provider, Moresco not only tackles the challenges posed by dynamic data environments but also drives organizations toward a future where data is a strategic asset that fuels success.
Many organizations still depend on multiple backend systems to support their supply chains. Over the years, they have integrated best-of-breed ERP systems, procurement software, and application management platforms, resulting in numerous systems containing vast amounts of data scattered across the enterprise. While the same data is used across different systems, its widespread distribution raises questions about which version is the "correct" one. This inconsistency and lack of visibility complicate data management, leading to incomplete inventories, unnecessary purchases, and disruptions in manufacturing processes, which in turn increase transaction costs. Additionally, business decisions based on disparate data can erode competitive advantage.
The most effective way to address these challenges is through Material Master Data Management. A material master acts as a centralized repository that standardizes data, reduces redundancy, and serves multiple enterprise functions such as purchasing, inventory management, and invoicing. The key benefit of having a centralized source is clean, reliable data that supports maintaining an accurate material inventory. Providing a single, unified view of material data across the organization ensures more efficient supply chain operations, ultimately driving higher revenue and lowering costs.
While implementing a Material Master Data Management solution is ideal for improving material data quality, enterprises often face challenges when managing both legacy systems and new software. For large organizations operating across multiple units and locations, the first step before selecting an MDM tool is to clearly define what constitutes master data and establish standards to ensure consistent data quality.
Data Management during ERP Implementation
Integrating Material Master Data Management (MMDM) into ERP implementations is not merely beneficial—it is essential. As organizations undertake enterprise-wide initiatives such as ERP deployment or consolidation, clean and reliable data forms the foundation for success. However, despite its critical role, MDM is often overlooked in ERP planning, resulting in missed opportunities, extended timelines, and increased costs.
A major advantage of aligning MDM with ERP lies in cost control. Businesses continuously seek to reduce operational expenses and improve profitability. By cleansing, standardizing, and enriching data before it enters the ERP system, companies eliminate redundancies, prevent costly errors, and optimize procurement and inventory processes. This leads to greater cost efficiency and a competitive edge, particularly in markets with tight margins.
Another important benefit is enhanced process integration. Many organizations face challenges with siloed departments, disconnected systems, and inconsistent data standards. MDM integration dismantles these barriers, fostering seamless communication across business units and geographies. This results in improved collaboration, streamlined workflows, and increased operational agility.
Data serves as the lifeblood of modern enterprises, and effective data management is critical to executing business strategies. Companies investing in MDM are better positioned to manage goals, identify opportunities, and respond to change—especially during ERP implementations that involve migrating data from multiple systems, locations, and languages. Without thorough cleansing and harmonization, data inconsistencies can cause delays, reduce ROI, and even lead to system failures.
MDM mitigates these risks by ensuring data integration and governance from the outset. ERP systems alone lack sufficient tools to manage complex data structures. Domain-specific MDM solutions fill this gap with features such as automated classification, normalization, and validation. Moreover, embedding data governance within the ERP process ensures that only accurate, reliable, and consistent data enters the system—minimizing risk and laying the groundwork for sustainable success.
MDM in the ERP Implementation Lifecycle
Integrating Master Data Management with an ERP system can deliver significant benefits to an enterprise. The statistics below, based on research by Aberdeen, highlight the improvements achievable through a Master Data Management initiative during ERP implementation.
Maximizing ERP ROI with Integrated Master Data Management (MDM)
Detailed analysis suggests that integrating a Master Data Management (MDM) strategy during ERP implementation—especially when leveraging AI-powered automation and domain-specific expertise—significantly increases project success. MDM plays a crucial role in unlocking the full value of ERP systems and achieving the desired outcomes.
Who Owns the Material Master Within an Asset-Intensive Organization?
This question adds a layer of complexity to the effective management of material master data.
Ownership of material master data is often distributed across several divisions, including:
- IT (Supply Chain)
- Plant Supervisors / Inventory Managers
- Procurement
- Centre of Excellence (Operations)
This multi-departmental involvement often leads to confusion and inefficiencies.
To stay competitive and resolve these challenges, organizations must adopt a structured approach—beginning with investment in material master data cleansing.
Partnering with service providers specializing in material data cleaning is a strategic move that supports long-term efficiency.
Clean, accurate, and detailed material master data significantly enhances operational efficiency and optimizes inventory management.
The message is clear: investing in material master data improves inventory visibility and delivers strong ROI.
Success hinges on selecting the right technology to automate Item Master data management. This includes:
- Automating processes to ensure consistent data quality
- Deploying adaptive, scalable technologies for maximum ROI
- Ensuring systems are scalable to support future growth
With the growing importance of master data, organizations should engage with domain-specific experts who can help unlock significant returns on investment.
Why Organizations Are Investing in MMDM
Across asset-intensive industries, organizations are recognizing that clean, consistent, and centralized material data is no longer optional—it's essential. As inventories grow and supply chains become increasingly complex, the pressure to streamline operations has driven companies to adopt Materials Master Data Management (MMDM) as a strategic priority.
Leading businesses are investing in MMDM not as a one-time cleanup initiative, but as a long-term capability. These investments are motivated by clear, measurable outcomes such as reducing excess inventory, preventing duplicate purchases, enabling predictive maintenance, improving sourcing decisions, and ensuring smooth ERP upgrades.
Each of these real-world examples highlights a shared insight: poor-quality material data comes at a high cost—while effective MMDM unlocks significant business value across the enterprise.
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The Business Case for Material Master Data Management
According to research from top analyst firms, harmonizing and maintaining material master data can drive substantial cost savings. In fact, improved material data quality alone can account for over one-third of the total hard-dollar savings achieved through an ERP consolidation initiative—thanks to reduced material costs and optimized inventory management.
Success Metrics for Business-Led Material Master Data Quality with MDG
Here are proven success metrics based on insights from over 50 implementations:
Increasing Spend Under Management (Reducing Maverick Spend)
Maverick spend—uncontrolled purchases outside of preferred channels—can range from 30% to 50% across industries. A common goal is to reduce this by 50% annually over three years. Why? Because maverick spend is typically 17% more expensive than managed spend.
To achieve this, businesses need:
- High data quality to ensure accuracy across the material master
- MDG search capabilities to align legacy naming conventions with current taxonomies and attributes
Reducing MRO Inventory
Identifying exact duplicates can lead to a 4–8% reduction in MRO (Maintenance, Repair & Operations) inventory levels.
Identifying near-duplicates—items that match in form, fit, and function—can unlock an additional 6–12% in inventory savings.
MDG systems must be capable of real-time identification of such items to prevent future inventory bloat.
Leveraging Economies of Scale
Procurement teams need to go beyond supplier or manufacturer names and compare technical attributes to secure the best quality at the best price. Material-specific data quality and MDG efforts enable this visibility and support strategic sourcing decisions.
By consolidating volumes through preferred suppliers and leveraging global contracts, organizations can achieve 5–15% in cost savings. The MDG framework can automatically route new requests to these preferred vendors.
Reducing New Item Requests and Approval Turnaround Time
Key performance gains and cost savings can be realized through:
- Improved ability to locate existing items in inventory
- Faster processing of new item additions
“Get it clean” data quality efforts enhance item searchability. Implementing an MDG framework helps block duplicates and suggest viable alternatives, leading to up to a 75% reduction in unnecessary item requests within 12 months.
Furthermore, MDG-driven workflows, dashboards, and notifications streamline request processing. Some clients have reduced new item creation times from 7 business days to as little as 4 hours.
The financial benefits include reduced expedited shipping, lower p-card usage at local vendors, and avoidance of costly delays in maintenance or operations.
Use Case: A Global Oil & Gas Giant
The oil and gas industry is dominated by a few major players and is characterized by complex operations, capital-intensive assets, and high-risk environments. Even minor disruptions can cause significant ripple effects across production, profitability, and safety.
One often overlooked—but critical—risk area is the quality of material master data. This data isn’t just about part numbers; it includes technical specifications, manufacturer details, pricing, and more—all vital to procurement, planning, and maintenance. Errors here can lead to incorrect orders, downtime, and millions in lost revenue.
The Challenge
Company A, a global leader in petroleum extraction and refining (with over $10B in annual revenue), operates a key refinery in Houston that generates $500M+ annually. The facility relies on accurate procurement master data to maintain uptime—including vendor info, spare part specs, and manufacturer data.
During a routine maintenance inspection, an engineer urgently
requested the following part:
“BEARING, BALL; 20 MM ID; 47 MM OD; 26 MM WD;
Radial”
The procurement team searched the ERP system and found what
appeared to be a match:
“BRG, BALL; 20 MM ID; 47 MM OD; 26 MM WD;
Standard”
Assuming they were the same, the purchase went forward. But the key difference—“Radial” vs. “Standard”—was missed. This seemingly small error risked the wrong part being installed, which could have caused equipment failure and unplanned plant downtime.
The MMDM Solution
To address this risk, Company A implemented a materials-specific Master Data Management (MDM) strategy in partnership with a domain expert. A major improvement was the normalization of all spare part data—particularly bearings—and the addition of mandatory attributes like “bearing type” in the MDG (Master Data Governance) framework.
This governance ensured that every material record included key standardized fields, eliminating ambiguity and driving data quality from the start.
Business Impact
- Dramatic reduction in stock discrepancies through consistent, attribute-driven part identification
- Improved forecasting and maintenance planning thanks to accurate historical consumption data
- Optimized safety stock levels using reliable lead times and part usage trends
- Lower risk of obsolescence with better visibility into lifecycle stages and part alternates
Use Case: Food & Beverage Conglomerate Prevents Downtime with Smarter Material Master Data Management
In the food and beverage industry, where speed, safety, and precision are non-negotiable, even a minor oversight can cause major disruptions. With strict production schedules, regulatory compliance, and quality standards, clean and complete material master data is crucial.
The Challenge
Company B, a leading food and beverage conglomerate with over $5 billion in annual revenue, operates a high-capacity manufacturing facility in the Midwest. Producing beverages, sauces, and frozen meals, the plant is a vital node in the global supply chain—running multiple lines 24/7 to meet high consumer demand.
During a scheduled inspection, a technician flagged a worn-out pump on the bottling line for urgent replacement. The pump was essential to the filling and sealing process—any failure would halt production.
The technician selected a part from the ERP system
labeled:
“Pump, Centrifugal; 30 GPM; Stainless
Steel”
However, the delivered part lacked food-grade certification.
The correct component should have been:
“Pump, Centrifugal; 30 GPM; Stainless Steel;
Food-Grade”
The issue stemmed from missing attribute-level details and enforcement in the material master. The team assumed compatibility, unaware of the certification gap. Installing the wrong pump could’ve led to product contamination, regulatory violations, and major financial and reputational damage.
Potential Consequences
- Installation of a non-food-grade pump in a food-grade production line
- Risk of contamination and non-compliance with industry regulations
- Emergency shutdown and full sanitation cycle
- Delayed shipments and reduced throughput
- Potential legal liability and multi-million-dollar revenue loss
The MMDM Solution
To eliminate such risks, the company partnered with a materials master data management expert to implement an attribute-driven cataloging system under a structured governance framework.
Mandatory data fields and validation rules were introduced. For pumps, key attributes included:
- Pump Type (e.g., Centrifugal, Diaphragm)
- Flow Capacity (e.g., 30 GPM)
- Material Composition (e.g., Stainless Steel)
- Certification Status (e.g., Food-Grade, Industrial)
With standardized attributes enforced, procurement systems now flag incompatibilities and automatically filter for compliant items. For food production lines, only certified food-grade components are visible and selectable.
Business Impact
- Zero ordering errors thanks to standardized classification and validation
- Increased uptime and production reliability through first-time-right replacements
- Higher procurement efficiency by reducing urgent reorders and last-minute escalations
- Improved compliance and audit readiness with traceable part certifications
- Enhanced trust and collaboration between maintenance, procurement, and QA teams
Executing a Materials Master Data Management Strategy
The roadmap to executing a fool-proof materials master data plan is not too different from the strategies for managing master data for suppliers, customers, and products. However, industry-specific expertise, turnaround time, and testing the quality of the final output are all critical aspects unique to Materials Master Data.
In theory, it’s simple — clean the “unreliable” data in the system; test the cleaned data thoroughly based on predefined rules for uniqueness, categorization, and completeness. Once mapped into the ERP, ensure that “Robust Data Governance Systems” are put in place to prevent the data from “contaminating” over time.
This process can be done in-house by professionals who understand MRO requirements, alongside database and IT experts. However, not all companies have access to such talent, and even when they do, many prefer partnering with specialists who have deep expertise in materials master data and the related data governance principles, like Moresco. We’ll cover more about Moresco’ MMDM solutions later in this article.
Materials Data Cleansing
Due to the absence of Data Governance Strategies and Data Stewardship, an organization's Materials Master Data can become compromised over time.
This means that repeated procurement requests for the same part can result in duplicates in the system. These duplicates often arise from poor categorization when the initial procurement request was entered into the ERP system. Missing details such as Manufacturer Part Number or Manufacturer/Supplier Name further exacerbate the problem.
The traditional solution has relied heavily on manual data cleansing—using pattern matching, fuzzy matching across various data points, and some “spreadsheet magic.” Effective management of both material and customer master data improves operating efficiency by removing duplications, decreasing errors and downtime, and enabling smoother collaboration between sales, production, procurement, logistics, and customer service teams.
However, with recent advancements in AI, Moresco has been deploying industry-specific, machine learning models to cleanse, standardize, PureData, and enrich materials master data. This approach has greatly improved both project delivery efficiency and data accuracy.
Moresco’ state-of-the-art PureData© suite ingests material records in minutes and processes them within hours, based on input rules. The data is then manually verified to ensure total accuracy before updating the ERP system.
The video below provides an excellent overview of how Moresco’ PureData Suite can cleanse your legacy master data records, restoring reliability.
Benefits of implementing the Data Cleansing Initiative
Annual Inventory Carry Cost Reductions of 4.4% (factored cost of capital) as write-down (positive impact to balance sheet)
- $400 Million in Inventory
- 10% Duplicate Identification
- $40 Million in Duplicate Inventory Value
- Write Down of Factored Costs at 4.4% of $40 Million = $1,760,000
Cost Reduction on Aggregation of Demand across 15% of $1B in MRO
- $1 Billion in Maintenance, Repair, and Operations Material
- 15% Identified through Harmonization as Similar (Across 10% Supplier Base)
- $150 Million addressable spend
- 12.5% reduction in costs through strategic sourcing
- Cost Reduction of 12.5% of $150 Million = $18,000,000
ANNUALIZED NET COST REDUCTIONS FROM: DATA CLEANSING = $19,760,000
Materials Data Governance
While PureData ensures that historical materials data is cleaned and kept up-to-date, a robust data governance strategy is essential to prevent such errors and to ensure that every material request going forward is complete with all relevant data points, without duplicating material records.
Typically, the Data Steward or the Head of Master Data is responsible for this governance.
Generally, enterprises have systems within their ERP to enforce these Governance Standards. For example, SAP users can leverage the governance system SAP MDG. Similarly, companies using Oracle ERP can use Oracle MDM for their data governance needs.
However, these legacy systems often require dedicated teams for maintenance and setup. Incorporating industry-specific requirements can be complex, and organizations may face challenges during implementation.
At Moresco, our governance software service, Assure©, is a purpose-built data governance product for Materials Master Management. It adapts to the continuously evolving needs of every industry. The software can be used as a bolt-on solution within SAP MDG and can also be easily integrated directly into most ERPs. Learn more about how these solutions work together in article.
Benefits of Implementing the Data Cleansing Initiative
Moresco Assure for Reduction of Maverick Spend
- 80% of the $1B Maintenance, Repair and Operation (MRO) spending is covered by preferred/pre-negotiated contracts — $800 Million in Spend
- Data governance improved catalog quality, reducing maverick spend from 40% to 25%
- 15% gain in compliance = an additional $120 Million in contracted spending
- Average of 16.5% cost reduction for pre-negotiated categories
- Cost reduction of 16.5% of $120 Million = $19,800,000
ANNUALIZED NET COST REDUCTIONS FROM DATA GOVERNANCE = $19,800,000
COMBINED ANNUALIZED NET COST REDUCTIONS: $39,560,000
Conclusion
In conclusion, Material Master Data Management (MDM) is essential for ensuring data accuracy, consistency, and accessibility across an organization. A well-implemented MDM system provides a single source of truth, helping businesses streamline operations, improve decision-making, and reduce errors. By standardizing material data and integrating it with other systems, companies can enhance supply chain efficiency, optimize procurement, and improve supplier collaboration.
With the integration of advanced technologies like AI and automation, MDM takes on an even more significant role in maintaining high-quality, reliable data. These technologies enable smarter inventory management and risk mitigation, empowering businesses to stay agile in a fast-evolving marketplace. Ultimately, a strong MDM strategy drives long-term business growth, supports innovation, and fosters stronger relationships with customers and suppliers.
