How Master Data Affects Company's Success In Logistics Industry

May 26, 2024 by
How Master Data Affects Company's Success In Logistics Industry
ABI-VNM - Abivin Vietnam, Phạm Nam Long
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In today’s business world, whether it is a business corporation, a non-profit organization or a governmental agency, data is the heart of every company in operating, managing, or referencing. A recent Hackett Group study revealed that over 70% of companies are planning on implementing a Business Intelligence or analytics application. That being said, Master Data significantly influences a company's strategic business decision-making and also its success rates, especially a company operates in the Logistics Industry.

Data is the heart of every company in operating, managing, or referencing
Data is the heart of every company in operating, managing, or referencing


So what is Master Data?

Master Data is defined as the core data that is essential to the operation of a specific business or business unit, i.e customers, suppliers, products, prices, costs and services. The kinds of information used as master data will vary from industry to industry, from organization to organization, and also from software to software within the same industry. But not all Master Data qualifies for a good enough source of data. It fully depends on the quality and the way organizations manage their Master Data.

Master Data is the core data essential to the operation of a specific business or business unit
Master Data is the core data essential to the operation of a specific business or business unit


How to measure the quality of Master Data?

Data quality can be defined in many different ways. In the most general sense, good data quality exists when data is suitable for the use case at hand. The quality of Master Data is evaluated based on the following criteria:

  • Completeness: Are values missing?
  • Validity: Does the data match the rules?
  • Uniqueness: Is the data duplicated?
  • Consistency: The consistency of the data across various data stores.
  • Accuracy: Does the data represent reality from the required point in time?
  • Timeliness: The degree to which the data represents reality.

Why is Master Data so important in Logistics Industry?

Master Data, along with other resources, is considered the foundation of a company as it helps that company to build an operating system based on the data or information that already existed and built-up over time. Most companies have their master data input access controls restricted to a small number of people with the hope of keeping data accurate and to prevent misuse and unwanted accidents with the powerful master data transactions.

Master Data helps companies build an operating system based on the data that already existed and built-up over time
Master Data helps companies build an operating system based on the data already existed and built-up over time


To effectively implement a Logistics software solution, data will be the key asset for every transaction, from producing, customer finding to negotiating.... An accurate understanding of organizations' most valuable information assets is key to running a business effectively and efficiently. A very simple example is the business decision to sell an existing customer a different product. In this case, the customer and the product already exist in the master records, but the relationship between the customer and product do not. For the transaction system to work correctly, there needs to be a new record in the item proposal table with typical order quantities and shipping modes. But in order for the system to work properly, there needs to be an entranceway to get into the customer's info record, in which the salesman will get to know what the supply point should be for that customers, as well as what distribution center should be the delivery point to reduce the costs and provide an optimal route for the delivery process. All of this data needs to be archived afterwards for prospective purposes.

On the opposite, inaccurate or erroneous data can lead to business catastrophes. Imagine if a Transportation Management System (TMS) or Route Optimization System (ROS) uses inaccurate or outdated input data (such as number of vehicles, warehouses, transporters, total order weight, traffic conditions...), there will be numerous bad cases happen. For example, when a dispatcher inputs the incorrect addresses of customers, or the wrong total order weight, the software will not find the most optimal route for delivery, or even worse - the totally incorrect route. Besides, by input the wrong total order weight, the system might assign the order to a not big enough vehicle for delivery. That can cause hundreds, thousands of dollars going to waste and other serious consequences, such as failing to complete orders, wasting time and expenses, negatively influencing customers' relationships. Therefore, accuracy and well-organized workflow from every section of a company is indispensable in the Logistics and Supply Chain industry. To avoid the breakdown by using low quality data, a Master Data Management strategy is absolutely crucial.

How to avoid having/using inaccurate or erroneous Data?

Manage Master Data effectively
Manage Master Data effectively


For a company that operates in the Logistics industry, the range and volume of data is huge – data from online forms, ERPs, CRMs, routing data from fleets, employee profiles, vendors, and so much more... Master Data Management is simply the complete management of master data. A good Master Data Management strategy must be built around these disciplines:

  • Governance: Basically the instructions that manage the company's systems, policies, rules and qualities to gain access to precise and valid Master Data.
  • Measurement: Checking data quality and chances for continuous improvement.
  • Organization: Choosing the right people to implement the MDM (Master Data Management) program.
  • Process: Defining processes across the data lifecycle used to manage master data.
  • Technology: Managing the master data hub and the empowered technologies.

There are some key steps to store Master Data, for example: prepare a business case, set up a governance process, conduct a data inventory and so on… refers to our previous article “10 Steps To Store And Prepare Master Data".


Data management strategy
Data management strategy


Master Data is an essential part of every company nowadays, independent from what industry that company is operating in. However, not every organization can overcome the challenge of keeping and maintaining a healthy data storage. Managing your Master Data is the most effective way to gain control of your processes and your business analytics, especially when you're running a business in the Logistics Industry.

With high quality Master Data, you can effectively implement Logistics Software like Abivin vRoute to cut down logistics cost. Visit to learn more!







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