What is the purpose of Master Data Management (MDM)?

Master data management signifies the management and improvement of a corporation’s master data. The most important master data for strategic and (operative) purchasing are:

  • Suppliers
  • Materials/ components
  • Catalogs (e-Procurement) featuring the goods and services that need to be purchased
  • Product groups and category structures
  • Corporate and procurement organization
  • Purchasing info records (SAP-specific)
  • Supplier contracts
  • and many other types of data

The challenges for an MDM – Master data management in purchasing are especially great when several ERP systems with different data structures and unconsolidated or non-harmonized supplier and material bases exist.

Master data management systems that specifically cover purchasing requirements are only available from a few highly specialized suppliers such as Orpheus with their DataCategorizer software tool. This tool focuses on the types of master data, suppliers, purchasing info records and materials/components. Its most important features are:

  • Detection of duplicates in supplier and material master databases
  • Detection of similar suppliers who belong to the same group of companies and the semi-automatic generation of a vendor hierarchy (supplier tree)
  • Consolidation and grouping of the supplier master databases
  • Harmonization and normalization of supplier master databases
  • Clustering of similar materials (e.g. in order to standardize them at a later time, detect price deviations or as preparation for an LPP analysis and cost regressions)
  • Harmonization of material master parameters for same/ similar components (MRPs, batch sizes, planning horizons, etc.)

MDM tools such as the DataCategorizer also incorporate intelligent analyses of transaction data, such as invoices, order and goods movements, in order to offer the following features:

  • Detection of errors and outliers regarding prices in the material master data and purchasing info records
  • Detection of unused suppliers and materials
  • Detection of data errors and missing information in the master databases
  • Correlation between the purchase price of the materials and their cost drivers
  • Classification of invoice and order vouchers into a standard categorization such as eClass or UNSPSC
DataCategorizer 2020
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