With the help of item master data, both supply chain experts and operations staff can get all the details about a product using the ERP (enterprise resource planning) system. It includes information like who supplies the product, what materials are used, how many items are in stock, how much profit the company makes from it, etc.
A product's item master data can help businesses simplify their operation process and have correct production information at their fingertips. In this article, we will see what item master data is and why it is important for the business.
Define an Item Master
An item master or master items are a collection of important details about a specific product in a company's storage. Imagine this as a mini file that records when a product was made, how it was made, its cost, and the quantity of the product in inventory. It's like having a handy guide that tells operational staff and supply chain managers everything about an item.
Define Item Master Data
Item master data refers to all the important information recorded for products in a company's ERP system. People like product managers, as well as those in purchasing, sales, and finance, use this information to figure out how much the company's inventory is worth. It also shows how long it takes to make products and the differences in the cost of materials.
The more detailed the information in the item master, the better the company can do at making, stocking, and selling the product to make more money.
Item Master Data: An Overview
When a company has accurate item master management, it can quickly and smartly decide how to manage a product's journey through the supply chain. Manufacturers and product managers can figure out which types or colors of items sell the fastest, which size is most popular, and which versions of the product aren't selling well.
For example, if product managers know which colors or sizes of T-shirts are popular, they can order more of those materials along the supply chain to make more of those popular colors and sizes.
By keeping their data, companies find a built-in way to be smart about their work. It leads to better decisions, which, in the end, means they make more money.
Importance of Master Data
An item master can help simplify the supply chain and manufacturing process. It is important for many reasons, including inventory management. Having the correct item master record is like having a smooth road for work and productivity. It keeps things running well and doesn't waste money or time.
When a company keeps complete and up-to-date records about the products all in one place, it stops confusion and costly mistakes. Imagine it as the heart of all the data needed for how things move through the supply chain.
What Does Item Master Data Include?
Different businesses need to keep track of different things. However, item master data covers information about a product, what goes into making it, the steps in the manufacturing process for that product, and how much money is invested in it.
Here's a basic list of an item master table structure and what it includes:
- Product name
- Description
- Costs of materials used
- List of things needed to make it
- Where do the materials come from
- A product's manufacturing time
- Supplier details
- How much to order
- How much stock is already there
The way this information is organized should match how the company works.
For example, a big company with many warehouses and stores needs a more complex system to keep tabs on everything. On the opposite, a smaller company that only sells online might need a smaller system to record the data.
Item Master: How Does It Work?
Item master data holds all the important details about a product, like costs, materials, suppliers, etc. It's like a go-to book whenever anyone in the company needs the latest and most accurate product information.
Here is how item master works:
- It helps with money management, sales, and production of goods. This data helps everyone plan things better. Manufacturers can order more things from suppliers and keep enough stuff in stock.
- It also helps figure out how much the product costs.
- It even helps with finding out how the operational process is going.
- It helps show whether costs are changing and whether the company is making enough money.
- It is also helpful in producing top-quality products and detecting defects at the beginning of the manufacturing process.
Quality of Item Master Data
Having up-to-date data in a company's item master is very important. Bad data or missing data can lead to bad manufacturing decisions, but having wrong data is worse because it can make you question the whole manufacturing process.
For example, if the numbers about how much product is in stock are wrong just before the holiday season, it could mean not having enough items to sell. Also, if materials for making products arrive later than expected, it can mess up the production time, leading to late deliveries or even cancellation.
It can make customers unhappy and hurt the company's reputation. So, having the right and top-quality item master data is important.
Best Practices for Item Master Management
Here are some best practices for item master management:
1. Smart Setup
First, decide the most important information you need in your item master organization. Starting from buying to keeping inventory. Make these important details standard in every item master.
2. One Size Fits Many
There is no need to start over whenever you want new product information. Make a basic pattern/template for item master data in your ERP system. As a result, you will save time and maintain consistency.
3. Assign Work for More Accuracy
Assign someone (or a small team) to review each item master. It helps keep the data clean and prevents mistakes when ordering or managing inventory.
4. Think Ahead
Imagine how different data pieces can work together. Combining item master data with sales forecasts or financial information can give you more powerful insights. Plan for this interconnectivity in the beginning.
Use Inventory Management Software to Manage Item Master Data
A great ERP system is a must-have to record the item aster data easily. You need software that can grow with you and blend with your business tasks.
Item master in the inventory management system helps with stocks, makes analyzing easier, lets your team work faster, and helps buy and make products faster. Using spreadsheets to record item master data is not an easy task to do.
Therefore, specialized and customizable inventory management software is important to keep things running smoothly.
Transform Your Item Master Data Management With TranZact
Transform your item master data management with TranZact. Experience a seamless transition to improved processes, detailed insights, and effortless decision-making. TranZact offers Indian SMEs automated inventory management software. It provides real-time inventory control, streamlined analyses, and increased production capacity.
FAQs on Item Master
1. What is item master data?
Item master data is a special collection of important details about a product, like materials used, costs, quantity of the product, etc.
2. Why is item master data important?
Item master data is important because it helps companies manage products better, make smart decisions, and avoid mistakes in buying and selling.
3. What kind of information is in item master data?
Information like product name, materials used, costs, suppliers, and the quantity of the product is recorded in the item master.
4. Can every company's item master be the same?
No, companies can decide what information to include based on what's important for their products and operations.
5. What's the benefit of accurate item master data?
An accurate item master data helps in smooth operations, reduces errors, and boosts productivity in making, selling, and managing products.
6. How does item master data affect buying and making products?
It guides how much to order, helps make products on time, and guarantees the availability of raw materials.
7. What role does automated software play in item master data?
Automated inventory management software helps manage and organize item master data, making it easier to use and improving business processes.
