Material master data in SAP MM modules refers to all material master records stored in the SAP system. Based on material type, the material master is the central source of information for a material related to several application areas (Purchasing, storage, accounting, sales, etc.). Material master data is maintained at the plant level in SAP MM, while accounting information is maintained at the valuation area level. The valuation level is an organizational level where materials are valued.
Data is everywhere, and everyone uses it in their daily work. It is a reflection of facts, and when placed in context, it generates information, which is the foundation of the digital world. Data management best practices are critical to the smooth operation of any business. This is done to ensure that important decisions are made on time and that departmental responsibilities are aligned.
Consistently managing business processes saves the company time and effort. Established rules and regulations enforce a structured organization for data management, including structured data identification, recording, classification, modeling, security, archiving, and deletion. Simplified processes and effective data management enable faster decision-making, influencing better customer response.
Master Data Management (MDM) is concerned with the accuracy of master and reference data. The ultimate goal is to generate unique records, increasing the enterprise’s competitiveness. This guide will teach you the fundamentals of master data management and its applications.
What is SAP Master Data?
SAP master data is the foundational information for any transaction. SAP Master Data is vital because it provides business context by supplying data models that can guide business processes. This ensures the consistency of SAP master data across analytical and transactional systems. An organization uses highly valuable information repeatedly throughout numerous business processes.
SAP Master Data Type
In the system, there are various types of SAP Masters. SAP’s primary master data includes the customer’s master and material masters and the customer’s material record. Other data derived from condition-based methods include:
Customer Master Data
All relevant information needed to process inquiries or quotations, place an order, deliver an order, invoice, and pay the customer is contained in the customer master. Based on the Configuration Settings, the Customer Masters may automatically assign numbers. Most customers have the same general, sales area, and master data. They can also be extended to various sales areas or Company codes. When you enter an order, SAP will prompt you to select the appropriate one.
The master customer record contains basic information such as the customer’s name and address, which are kept at the client level. Accounting information (reconciliation account) is included at the company level, and sales level data include shipping, sales, and billing-related fields. The customer account group can be used to limit the fields that appear on the master customer record.
Customer Account Group:
A customer account group is a classification of customer master records that controls the following:
- The Account ID determines the customer’s number range (external as well as internal)
- If the customer is a one-time or repeated customer
- The pricing procedure indicator’s default value
Material Master stores and sells information about every material an organization purchases, manufactures, and stores. The information in the master material is required for the following tasks:
- Inventory Management is used for posting goods post-movement postings, and physical inventory Invoice Verification is used to ensure invoice posting.
- To assist Sales and Distribution with the processing of sales orders.
- Production Planning and Control handle material requirements, planning, and work schedules.
Customer-Material Info Record
The Customer Material Info Record is primarily used to store information about how a customer refers to a specific material. The Customer-Material Info Record takes precedence over the Customer Master and Material Master records. General data is less important than information specific to the customer’s material. As a result, if different delivery information is recorded in the customer master record and the customer-material-related information record, the customer-material-specific information record takes precedence.
For example, during the delivery Plant selection process, the CM Info Record is accessed first. The system enters the material’s identifier and delivery information into the purchase order.
The customer-specific information record contains the material information specified for each customer. It is made up of:
- A specific material number is provided to the customer (up 30 to 35 characters), as well as a description.
- as well as a description
- You can keep the customer-material information record by keeping the relevant customer master record.
- Separately, follow the menu path below.
Transactional Master Data
Transactional data is information about an organization’s transactions, such as when a product is sold or purchased. Master data in various transactions include customer, product, pricing, output, and supplier information.
Why is SAP Master Data Management important?
Aside from assisting an organization in making sound decisions and answering key questions, master data management has many other advantages. Here are a few examples:
It lessens the workload.
Every department is responsible for maintaining the master data without centralized Master Data Management. As a result, the same master data is collected twice and more frequently. Worse, the identical master data is managed by multiple departments.
What’s the deal? Because much of a company’s master data isn’t department-specific. On the contrary, it is frequently required at the corporate level. In this case, Master Data Management defines a clear governance process. This means that each piece of master data is only collected once. As a result of the reduced or eliminated effort to maintain master data independently, it reduces the workload in business departments.
Master Data Management improves Data Quality.
Quality is one of the most serious shortcomings of unstructured, decentralized data management. Every department is sticking to its guns. This invariably leads to issues with reporting or cross-functional processes.
On the other hand, a thorough Master’s Data Management serves as a single source of truth. A source that offers all relevant master data, resulting in the direct benefit of superior data quality. In this context, data quality includes not only correct data but also data that is up to date.
Processes for Data Compliance and Governance
Companies can set up dedicated data compliance and governance processes when all master data is in one place. Furthermore, modern master data systems enable the assignment of structured data responsibilities.
A structure addresses the question, “Who is allowed to change and maintain master data at different stages?” As a result, responsibilities are documented to ensure that the responsible department/person only maintains data. Again, this has a direct impact on data quality.
Decreases time to market
A centralized master data system significantly reduces the setup effort when introducing new applications and systems. Instead of manually configuring master data within the new solution, connecting it to the primary master data system directly provides the necessary master data.
As a result, the time to market for new systems, solutions, or functionalities is instantly and sustainably accelerated.
Enhanced Business Process Efficiency
Master data management is the ideal single source of truth for supporting business processes. Because many master data systems provide simple (mobile) applications, employees can get the most up-to-date and high-quality master data whenever they need it to support their operations. As a result, employees can quickly access a vast knowledge base. Finally, this contributes to process efficiency.
Enhances Decision Making
Master data management allows a company’s master data to be viewed holistically, comprehensively, and completely across the organization. As a result, company-wide decision-making processes rely on the same and most up-to-date set of master data. As a result, it assists executives, senior management, and other employees in making informed, fact-based decisions.
When it comes to the decision-making part, dynamic data is often highlighted. However, as I mentioned in my opening statement, master data is the driving force behind your dynamic data.
Manual processes are eliminated with master data management.
Maintaining master data is still a highly manual task in many businesses. Furthermore, Excel spreadsheets are a popular tool for master data management.
Why is this advantageous? To begin with, manual processes are always a source of failure and inefficiency. Second, while Excel sheets are simple to use, they have significant disadvantages when exchanging data with other systems.
Centralized and system-based Master Data Management eradicates both issues. Personal Excel files are no longer required to be created and maintained. Data governance processes, on the other hand, should limit that approach. Furthermore, a master data system typically provides many integration options.
What are the common steps in implementing Master Data Management successfully?
Putting Together an MDM Team
The formation of an MDM team is essential for a smooth process. First, the appropriate stakeholders must be identified. Department heads, technical staff, and chief data officers are responsible for data collection, monitoring, and analysis. A core team must be formed from these stakeholders. This team’s primary responsibilities include:
- Implementing and revising master data management policies and procedures to meet the needs of the business.
- Providing relevant employees with information about these policies.
- Creating solutions for master data issues and overseeing the solution process.
Selecting the Best MDM Solution
Not every MDM solution is appropriate for every company. However, the MDM solution you select should be capable of matching and linking data, managing data location (where data is stored and generated), and supporting data privacy.
Implementing MDM in an existing system
Creating the new master data set from scratch can be expensive, especially for large organizations with a lot of data. Because MDM is a complex process to apply to an existing database, the risk of failure can be reduced if implemented incrementally in the enterprise’s systems of record.
What are some examples of master data management applications?
Master data management is primarily used by businesses to organize, localize, and synchronize their sales, marketing, and operational activities.
Assume a customer has changed their mailing and billing addresses. The sales department may have the most up-to-date address, but the finance department may not. Invoices may be sent to the incorrect address until the customer confirms they have the new address. When a contact is added to an address book, MDM matches and updates the information by making a single version of the address book and synchronizing it with all departments.
SAP Master Data Management is one of the most important modules for “master data” synchronization. A company’s master data is the most important data about its customers, and its products are its other assets. Therefore, it has become essential for professionals to gain expertise in it. We at Tekskilled have a team of industry experts who are the best at coaching SAP MDM to help you get started in this industry.