Material Master
The material master is the central, permanently stored record of all materials in a company – from raw materials and semi-finished goods to finished products and merchandise. It consolidates purchasing, warehouse, planning, sales and accounting data per material and serves as the binding reference for all processes in the ERP system.
The material master is the central collection of all permanent data on a company’s materials. A material is any item that is procured, stored, manufactured or sold – that is, raw materials, auxiliary and operating supplies, semi-finished goods, finished products and merchandise. For each material, the material master maintains a uniquely numbered record with description, units of measure, prices, planning and warehouse parameters, and valuation and accounting information. This makes the material master the binding reference that every process in the ERP system accesses – from purchasing and production through to warehouse, sales and financial accounting.
As part of the master data, the material master does not describe individual business transactions but rather the stable properties of a material that remain the same across many transactions. Characteristically, the term originates in industry and in production-oriented ERP systems such as SAP: unlike the purely trade-oriented article master, the material master also represents manufacturing-relevant materials and organizes its fields into functional views that are maintained by different departments.
At a glance
- Central record per material: raw materials, semi-finished goods, finished products and merchandise
- Part of the master data – long-lived and referential, in contrast to transaction data
- Structured into functional views: purchasing, planning, warehouse, sales, accounting
- Material type and industry control which fields are mandatory and visible
- Data quality determines planning, production control and valuation
What is the material master – and what belongs in it?
A material master record consolidates all information that describes a material throughout its entire use within the company. The fields can be organized into basic functions: identification and description, purchasing and procurement data, planning and requirements planning, warehouse and inventory management, sales data, and valuation and account determination. Depending on the industry and system, classification characteristics, quality, customs or hazardous-material details are added.
The scope of a material master grows with the requirements. A simple traded article often needs only a few views, whereas a manufactured product with a bill of materials, batch management and quality inspection can carry hundreds of attributes. What matters is not the number of fields but that the information actually used is consistent, unambiguous and up to date – because it drives automated decisions such as order proposals or production orders.
Views of the material master
A defining feature of the material master is its structuring into views. Each view consolidates the fields of a functional discipline: the purchasing view contains the order unit of measure, purchasing group and delivery times; the planning view the procurement type, lot-sizing procedure and safety stocks; the storage view storage conditions and batch management; the sales view sales data; and the accounting view the valuation class and price control. This way, each department maintains its own part while all access the same material record.
The material number as the key
Every material master record is identified by a unique, unchangeable material number. It is the key by which all documents, postings, bills of materials and stocks refer to the material. It is often supplemented by a GTIN or EAN for trade identification, by supplier and manufacturer numbers for purchasing, and by class numbers for characteristic-based searches.
Material types and organizational levels
So that the right fields appear for each material, a material type is assigned to it when it is created – for example raw material, semi-finished good, finished product, merchandise or auxiliary and operating supply. The material type controls which views can be maintained at all, which fields are mandatory, and how the material is valued and posted. A raw material needs no sales view, and a pure trade product no manufacturing data. This typing prevents records from being overloaded with unsuitable or empty fields.
A second core principle is organizational validity: many material data are not valid globally but per organizational level. Basic data such as description and base unit of measure are valid across the entire client, while planning and warehouse parameters are stored per plant and storage location, and sales data per sales organization. The same material number can thus be produced in-house in one plant and externally procured in another – an important difference from the flat article master of many trade systems.
How the material master works in the ERP system
In the ERP system, the material master is the single source of truth for all material-related information. Once a material has been created, all downstream processes reference this record instead of duplicating data. A purchase order takes the purchase price, unit and delivery time from the master; the goods receipt posts the quantity to the same material; material requirements planning (MRP) reads the procurement type, lot size and safety stock and generates order or production proposals from them.
This makes the material master the link between the modules: purchasing, planning, production, inventory management, sales and financial accounting all access the same basic data. A changed replenishment lead time only has to be maintained in one place and takes effect immediately in all future planning runs. Conversely, an error in the master record – such as an incorrectly set procurement type or valuation class – propagates unchecked through planning and accounting. This central role makes data quality in the material master a critical factor.
Why a material master matters
The value of a well-maintained material master shows in almost every process. Because planning, warehouse and price data are stored centrally, requirements planning and ordering run in an automated and traceable manner; manual re-entry is eliminated. Inventory management remains accurate because every posting is unambiguously assigned to a material. Material valuation – and thus a correct cost of goods in cost accounting – depends directly on cleanly maintained valuation classes and prices.
Conversely, poor master data is one of the most common causes of friction in day-to-day operations: duplicated materials, incorrect safety stocks, outdated replenishment lead times or unsuitable valuation classes lead to planning errors, production stoppages and incorrect balance-sheet values. The effort of cleaning up such errors afterwards usually far exceeds the maintenance effort of clean initial data entry. Data quality in the material master is therefore not an end in itself but has an immediate effect on delivery capability, tied-up capital and costs.
Distinction: material master, article master and transaction data
The material master belongs to the master data and stands alongside other master-data objects such as the customer master and the supplier master. What they have in common is that they describe stable reference objects that business transactions refer to. To be distinguished from these is the transaction data – purchase orders, production orders, deliveries, invoices and postings – which records individual, point-in-time events and uses the material master but does not change it.
Material master vs. article master
The terms material master and article master essentially mean the same thing: the central record of a product. The difference is largely linguistic and industry-dependent. In industry and in production-oriented systems – such as the SAP environment – the term material master is used, which represents not only merchandise but also raw materials, semi-finished goods and finished products, structured into manufacturing-relevant views. In trade and e-commerce, the term article master is used when referring to sellable goods. Anyone serving both worlds should establish uniform terminology in the project to avoid misunderstandings.
Maintaining the material master: data quality and DACH specifics
For a material master to deliver its value, clear rules for creation and maintenance are needed. These include a well-thought-out numbering system, binding naming conventions, mandatory fields per material type, and an approval process that checks new materials before they enter productive circulation. Regular clean-ups remove duplicates and deactivate discontinued materials rather than deleting them – because historical documents must still be able to reference their material record.
In the DACH region, tax and legal requirements must also be observed. Because material master data feeds into tax-relevant documents via valuation, cost of goods and VAT, it is indirectly subject to the GoBD requirements for traceability and immutability: changes to valuation- or tax-relevant fields should be logged, and documents should be reproducible with the status valid at the time. For cross-border trade, customs tariff numbers and countries of origin are often maintained in the master; materials subject to batch or serial-number management require additional traceability.
When switching systems, the material master is regularly the most demanding migration object. Fields and views must be mapped between the old and new systems, units, valuation classes and tax keys standardized, and duplicates cleaned up before the transfer. Good data quality in the legacy system considerably shortens any migration.
Example
Example: manufacturer tidies up 12,000 materials before the ERP rollout
A mid-sized machine builder kept its materials in isolated solutions for years: raw materials in the old inventory management system, purchased parts in Excel lists, finished products partly duplicated. Safety stocks and replenishment lead times were estimated rather than maintained, and several materials existed under different numbers. In practice, this led to production stoppages due to missing parts and to tied-up capital that no one could reliably quantify.
Before introducing a new ERP system, the team tidied up the material master: it defined material types with mandatory fields per view, a uniform numbering scheme and naming conventions, added planning characteristics such as procurement type and lot size, and standardized the valuation classes. Duplicates were merged and discontinued materials deactivated. Only the cleaned-up master was migrated to the new system. The result: automatically generated, plausible order and production proposals, reliable material valuation and significantly fewer missing parts in production.
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