How Poor Data Quality Can Create a Supply Chain “Tower of Babel”

Accuracy and efficiency are vital elements of the supply chain. Pulling disparate sources together into a single “language” is the first step.

Most of us have heard the story at some point in our lives. People speaking a single language decide to build a great tower to touch the heavens. As punishment for their pride, God confounded their speech so that they were suddenly unable to communicate with each other and they scattered around the world…and the tower ceased to be built.

Although intended as a way to show how so many different languages came to be, the story also has some relevance to business, especially in the supply chain.  How? Well, to realize maximum efficiency, all participants in the supply chain must be able to communicate in a common “language” But in today’s global economy, companies both large and mid-size find that they are dealing with many suppliers around the globe who may use different terminologies and identifiers in their transactional data, which may only serve to confuse and impede a company’s systems and processes. Companies find themselves dealing with either incompatible data (identifiers and terminology) or inaccurate data (which could come from keying errors). This affects not only the delivery and receipt of the goods themselves, but also the payments and receivables end of the supply chain.

The reality is that each link in the supply chain has specific functions and needs accurate data to perform those functions. But many supply chains have poor data quality and that is a major impediment to running a smooth operation. Another reality that hampers success is the existence of internal silos, where stakeholders within the company only consider their individual function in the transaction process rather than looking at the transaction as a whole and therefore only pay attention to the data that directly impacts their function. I’ve often talked about the need for collaboration between procurement and accounts payable, as well as collaboration between those two functions and the suppliers. How do we manage to pull it all together and end up speaking the same “language?”

What companies need to do is to build a highly functional and successful database that provides the meaningful, decipherable, and valuable data necessary for proper analysis.  Regardless of where the data originates from, companies need to be able to create processes that standardize and normalize the data, as well as check all data and initiate any fixes that might be necessary. There is a wide range of supply chain and supply chain finance solutions that will enable companies to reach their goals of speed, efficiency, accuracy, and reduced loss. Any of the solutions implemented must also be able to be quickly reconfigured as suppliers change, update, or modify their own systems and terminology.

See how you can remove the silos, friction, and confusion in your financial supply chain and thereby increase productivity, efficiency, and revenue.

Reggie Peterson

About Reggie Peterson

Reggie Peterson is Director of Indirect Products for AmeriQuest Business services. In this role, Reggie is responsible for leading the company’s growth of its indirect procurement offering that helps organizations better manage their procurement lifecycle to reduce cost and complexity. A 20 year veteran in supply chain management, Reggie’s previous experience includes serving 16 years as a Senior Procurement Manager for Coca-Cola, and as a Procurement Manager – Indirect Materials for Siemens.

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