What is Product Master Data?
Simply put, Product Master Data is a comprehensive collection of all product-related attributes and information stored in the master database of an ERP system.
Master Data Management (MDM) plays a vital role in ensuring a unified and accurate view by integrating data across various systems, maintaining consistency and reliability in product information.
The product master provides a consolidated view of product data, ensuring consistent information flow across CRM (Customer Relationship Management), ERP (Enterprise Resource Planning), and PIM (Product Information Management) systems within an organization.
A product master merges data from both the item master and material master to form a detailed product profile. While the product master focuses on product attributes and specifications, the item master covers inventory specifics such as part numbers and stock levels, and the material master details raw materials and components used in manufacturing.
Together, these components offer a holistic view of product and material data, ensuring enterprise master data is accurately maintained across all pertinent systems. For further insights on ERP data management strategies, please refer to this article.
As organizations grew, product data volume increased significantly across various departments and silos. Often, process gaps and lack of robust data governance led to the “dilution” or “contamination” of this data.
Consequently, the need for a centrally managed product master database became clear for leading enterprises worldwide. Major ERP providers started offering built-in solutions for Product Master Data Management (PMDM).
For example, SAP introduced PMDM, a suite of features designed to assist product development and change management processes. Similarly, other vendors launched their own MDM tools to help organizations implement master data management solutions, including product master data as a key domain. These tools facilitate centralized management and governance of product data while enabling integration across internal and external systems.
Here are a few case studies showcasing how we've assisted clients across various industries in implementing robust master data management processes.
What Fields are Available in a Product Master?
Below are some common fields typically found in a Product Master Data record within an ERP system.
These product data points are commonly found in most ERP systems but can differ based on the specific ERP and industry requirements.
Why Do Companies Maintain One?
For smaller businesses with lean teams and fewer product lines, managing product information centrally is relatively straightforward. Teams usually work closely together, and product data is stored in a simpler, more cohesive manner.
However, for large enterprises generating over $100 million in annual revenue, data management becomes significantly more complex. Handling product information across multiple platforms—such as CRM systems, ERPs, and external databases—presents considerable challenges.
Discrepancies or inconsistencies in data availability can disrupt critical processes, leading to inefficiencies in supply chain operations and go-to-market strategies. Cloud Master Data Management (MDM) addresses these challenges effectively.
By integrating cloud MDM solutions with ERP systems, organizations gain real-time access to accurate, consistent, and single-source product data. Cloud-based MDM centralizes control, breaking down data silos, enabling better data Assure management, improving team collaboration, and empowering data-driven decision-making.
In industries with extensive distribution networks and wide product assortments, cloud-based PMDM solutions simplify data governance, enhance control over product information, streamline inventory management, and optimize supply chain processes—all while reducing costs and mitigating risks.
A leading oil and gas company was facing issues with inconsistent product data for critical items such as drilling fluids, pipelines, and chemicals. For example, pipeline materials were recorded with differing grades and specifications, such as API 5L Grade B and API 5L X65, across procurement, inventory, and maintenance systems.
Additionally, chemical data was fragmented, with varying viscosity levels for drilling fluids, and discrepancies in the safety data sheets (SDS) for chemicals like Xylene and Methanol. This inconsistency led to procurement delays, compromised project performance, and challenges with regulatory compliance reporting.
To address these challenges, the company implemented a Product Master Data Management (PMDM) solution, which consolidated all product-related data and standardized key attributes such as pipe size, thickness, material type, and chemical composition.
Each product was assigned a unique product code, and all relevant data—such as pressure ratings, viscosity ranges, and safety handling information—was synchronized across various systems. The PMDM solution was integrated with the ERP and procurement systems, enabling real-time updates, eliminating duplicate data entries, and enforcing data validation rules.
As a result, the company saw significant improvements in procurement accuracy, project timelines, and regulatory compliance (e.g., OSHA, EPA). The unified product data also facilitated better maintenance scheduling for pipelines, minimized safety risks, and ensured that drilling fluids maintained the necessary viscosity for optimal performance during operations.
Challenges in Product Data Management
Many organizations struggle to warehouse and manage product data in a centralized repository due to various challenges, which highlights the importance of Product Master Data Management (PMDM). Below are some key reasons why this is the case.
Lack of Data Standardization: In complex organizations working in silos, inconsistent naming conventions, Units of Measure (UOM), and formats are often used for the same product. This creates significant barriers to centralizing the data.
Data Governance & Ownership: Every data record entered into the system must be properly vetted for duplicates, mandatory fields, and validation, with clear accountability and ownership. Without a structured approval system in place, organizations struggle to maximize the effectiveness of their product master, especially if they haven’t thoroughly planned the product master from the beginning.
Technical Complexities: As mentioned earlier, a core goal of PMDM is maintaining data consistency across platforms for a unified view. However, achieving this can be technically challenging, often requiring cross-platform expertise.
Scalability Issues: It’s relatively easy to manage a product master in organizations with simple use cases. However, as the size and complexity of the data set grow, the effort required for effective governance and management often becomes disproportionate, causing scalability issues.
Multiple Product Variants: Large enterprises often deal with thousands of products, each with numerous variants (e.g., size, color, packaging). Managing these variants and ensuring accurate data association for each one can be quite challenging.
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Strategies for Product Master Data
In essence, the approach to optimizing product master data management closely aligns with a generic master data management strategy, which revolves around three main components.
Several master data platforms provide ready-made data governance solutions, which also include modules for Product Data Management.
What are the Benefits of a Product Master?
Organizations around the world strive to maximize the value of a product master, mainly to achieve the benefits outlined below.
Supply Chain Operations
Undoubtedly one of the most desired benefits of having a product master. Below are some supply chain processes that can greatly benefit from this.
Procurement Process
Properly managed procurement master data — including Material Master Data in SAP — is crucial for streamlining procurement workflows. Some key benefits include:
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Improved Procurement Accuracy: Standardizing product data ensures procurement teams order the right items, minimizing errors and discrepancies in purchase orders.
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Enhanced Manufacturing Efficiency: Accurate BOM (Bill of Materials) data ensures smooth production cycles, reducing downtime and material wastage.
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Optimized Logistics Coordination: Precise product dimensions and weight information help streamline freight planning, cutting transportation costs and delays.
Inventory Management
By adopting the right strategies for managing inventory master data, businesses can streamline their supply chain operations, resulting in the following benefits:
- Improved Demand Forecasting: With clear, accurate insights into product attributes, historical trends, and stock levels, PMDM facilitates better demand forecasting, helping to avoid the risks of overstocking or running out of stock.
- Optimized Safety Stock: Ensures that inventory buffers are calculated using reliable data, reducing excess storage costs while maintaining optimal service levels.
- Enhanced Cross-Channel Visibility: Enables real-time inventory tracking across various locations such as warehouses, distribution centers, and retail outlets, allowing for better allocation and resource management.
Product Management
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Lifecycle Management: Keep product data accurate throughout its entire lifecycle, from development to discontinuation. This ensures that teams stay aligned on product status and the necessary next steps.
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Innovation: Leverage detailed product performance data and customer insights to uncover innovation opportunities. This facilitates quick adaptation to market trends and demands.
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Collaboration: Enable seamless alignment across product, marketing, sales, and customer service teams by providing access to consistent, up-to-date product data. This fosters better decision-making and smooth operations.
Vendor Relationship Management
Although the benefits may not be immediately obvious, a well-structured and planned Product Master Data Management (PMDM) system, along with an up-to-date and accurate vendor master, can drastically enhance procurement efficiency, reduce operational risks, and ensure a smooth, cost-effective supply chain.
There is a dedicated module for managing supplier master data, which is critical for optimizing procurement processes and strengthening supplier relationships. By integrating this module with other systems, organizations can experience the following advantages:
- Standardized Supplier Communication: Clear, consistent product specifications help minimize errors and misunderstandings during procurement negotiations or order placements.
- Supplier Performance Monitoring: Product master data can be linked to supplier performance metrics (e.g., lead times, defect rates), helping organizations evaluate and enhance vendor relationships.
- Better Sourcing Decisions: With a unified view of product specifications and supplier options, procurement teams can more easily identify cost-effective alternatives or even dual-source critical items.
Demand Planning
- Alignment Across Supply Chain Tiers: PMDM ensures that all levels of the supply chain share a consistent understanding of product details, minimizing bottlenecks.
- Reduced Fulfillment Errors: Accurate product data helps reduce shipping mistakes, improving on-time deliveries and boosting customer satisfaction.
- Smart Replenishment Planning: Enables data-driven replenishment decisions, based on real-time insights into sales trends and stock levels.
Leveraging Artificial Intelligence in Product Master
Artificial Intelligence is transforming the landscape of PMDM and data management as a whole. This shift brings about a more accurate, efficient, and—most importantly—less time-consuming approach to maintaining master data excellence.
Here are some examples of how Machine Learning models are revolutionizing the traditionally manual and tedious process of achieving master data success.
Automated Data Cleansing
A well-trained model, especially one equipped with historical, industry-specific product data, can significantly improve the accuracy of individual master data records in these three key areas.
Automated Enrichment
Procurement, Operations, and Product teams typically rely on master data records for comprehensive context on a product. However, during the creation and updating of these records, crucial information is often missed due to human errors, system limitations, or lack of available data.
A well-designed product master solution can now harness AI modules to enrich data, pulling insights from first-party sources, third-party databases, or even through web enrichment.
Product Data Classification or Normalization
One of the main challenges in master data management is dealing with unstructured data – data stored in fields like "short description" or "long description."
This creates difficulties in making large-scale decisions since automation and analytics tools typically depend on structured data fields to function properly.
A robust product master solution can leverage AI to parse this data, extracting key attributes, units of measure, and other essential information, then mapping them automatically to the relevant fields. It can also generate "tasks" for category managers to "review" and "approve" before being integrated into the master database for production.
Conclusion
Effective Product Master Data Management (PMDM) is crucial for optimizing business operations, spanning sourcing to inventory management.
With accurate product data, companies can streamline their supply chain, reduce operational inefficiencies, and make better sourcing decisions. Moreover, precise product information plays a vital role in logistics, ensuring accurate shipments, minimizing fulfillment errors, and optimizing transportation costs.
Implementing a well-structured PMDM system not only enhances internal operations but also improves logistics, resulting in smoother and more cost-effective delivery processes.
Frequently Asked Questions
What is an example of a product master?
A product master record stores all relevant information for a single product. For example, in the case of a chocolate bar, it would include data on raw materials (such as cocoa, milk, and palm oil), cocoa suppliers, distributors, machinery, and spare parts—essentially, all the key details related to the product.
How to create a product master?
Different ERP systems offer various methods for creating or updating a product master, and each system typically provides its own documentation. Here are a few popular ones:
What is the difference between PIM (Product
Information Management) and Master Data?
A product master data (or master data) stores detailed information about a product, including but not limited to its suppliers, raw materials, packaging details, and required equipment. In contrast, Product Information Management (PIM) focuses more on the merchandising, marketing, promotions, and distribution aspects of the product.
How is Product Master Data Managed in SAP?
SAP manages product master data through tools such as the Material Master in S/4HANA and SAP Master Data Governance (MDG). These tools centralize the creation of data, ensure its accuracy, and integrate product information across various modules like Sales, Procurement, and Production. Key features include approval workflows, duplicate detection, and real-time updates. SAP also facilitates data enrichment and lifecycle management, enabling smooth integration with third-party systems and ensuring consistent, high-quality data throughout the enterprise.
Which Softwares OR Solutions can be used for
Managing Product Master?
Several software solutions, including Moresco' Assure© and PureData©, help address key product master data challenges. This post also highlights leading software solutions for master data management.
