Blog | July 21, 2015 | by Dave Lindeen

Is Poor Data Quality the “Tower of Babel” for the Supply Chain?

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, they were suddenly unable to communicate as they now spoke many diverse languages…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 transnational data, which may only serve to confuse and confound 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. To be fair, there are other problems that create roadblocks to efficiency.

An article last month in Supply & Demand Chain Executive, “The Data Quality Dilemma for Business-to-Business Supply Chains,” offers two main causes for poor data quality in the supply chain. One is the issue we noted above, companies working with many different data sources from a variety of vendors and service providers. However, another issue the author notes is the unwillingness to look at the entire transaction as a unit, rather than as individual functions. It’s the “sin of the silo” that many businesses find themselves forced to combat.

According to the article, “Each party in the supply chain takes proper care of the information it needs to perform its duties. But all parties tend to pay less attention to data they don’t need for their own use.” The author refers to both internal and external execution systems as potential data silos and he provides excellent examples that illustrate the problems inherent in disparate data sources. What companies need to do is create a new Tower of Babel, building 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.