Why Is Unifying the “Single Source of Truth” the Most Critical Management Decision in Any Company?

Management Without Complexity – A Series of Reports and Analyses for Decision-Makers

Introduction: A “Number” Is Not Just Data… It Is Decision Power

In factories,
a number is not just a management indicator…
it is a production, purchasing, pricing, and operations decision.

Any discrepancy in numbers leads to:

Overproduction or underproduction
Incorrect pricing
Stagnant inventory
Illusory profit margins

In manufacturing specifically:
a difference in numbers = a direct loss.

Inside any company, major decisions are influenced by three things:

The number (what is really happening?)
Trust (is the number correct and approved?)
Timing (did it arrive on time?)

When there is no single approved number:

Each department works with a different version of reality
Meetings turn into “who has the stronger number?”
Decisions become compromises, not facts
And the phrase “let’s confirm first” keeps repeating

Therefore:
Whoever owns the number (its source, definition, and timing)… owns the decision.

The Real Problem: “Multiple Sources” vs. “One Truth”

In many companies, you’ll find:

Sales numbers from CRM or Excel
Revenue numbers from Finance
Shipping figures from Logistics
Inventory figures from Warehouses
Production figures from Operations

Each number may be correct within its own system… but inconsistent with the others.

The result: a conflicting company narrative.

This kills three critical things:

Decision speed
Trust between departments
Forecasting ability

Without one approved number:

No one is wrong
No one is accountable
And profit erodes silently

Why Do Factory Meetings Fail?

Because they turn into:

Defending numbers
Justifying variances
Operations vs. Finance arguments

Instead of:

Analysis
Decisions
Fast corrective action

The reason?
The absence of a single, agreed-upon numerical reference.

The Most Dangerous Number in a Factory: Unit Cost

Why?
Because it affects:

Pricing
Discounts
Production decisions
Expansion or shutdown decisions

Where do errors usually occur?

Relying on estimated costs
Inaccurate allocation of indirect costs
Ignoring actual waste
Separating operations from accounting

An inaccurate cost = correct decisions built on wrong numbers.

Who “Owns” the Cost Number in the Factory?

A sensitive question… but it must be asked.

Operations?
Finance?
Planning?

The correct answer:
The number has one owner, but it is built by multiple departments.

A healthy model:

Operations: actual quantities + waste
Maintenance: downtime
HR: labor hours
Finance: costing and valuation
Top management: approval

Inventory: The Area That Most Exposes the Absence of One Truth

In factories:

Inventory is frozen cash
Any wrong number = fake liquidity

Dangerous symptoms:

Raw materials “available on paper” but missing in reality
Materials available but unusable
Production stopped despite “available inventory”

Inventory without accuracy = a factory without control.

Production vs. Plan: A Number or an Interpretation?

Many factories say: “Production achieved the plan.”

But the executive questions are:

Was the plan realistic?
Was execution aligned with it?
Was deviation detected early?

Without one number:

The plan is one thing
Reality is another
And decisions come too late

The Concept of a Single Source of Truth (SSOT)

It does not mean only one system.
And it does not mean preventing departments from creating reports.

It means:

Unified definitions for core entities and indicators (customer, product, cost, inventory…)
One authoritative source for every critical number
Data quality rules (accuracy, completeness, timeliness, consistency)
Governance that defines: who owns definitions, who approves, who reviews

The concept of a Single Source of Truth is central in financial and strategic management discussions because it creates decision consistency.

What Is the “Source of Truth” Inside a Factory?

A very simple definition:

One number…

Used in operations
Used in accounting
Used in pricing
Used in decision-making

And it does not change based on the department.

Numbers That Must Be Unified First in Factories

Start with the most critical:

Actual production quantity
Waste and scrap percentage
Actual unit cost
Usable inventory balance
Utilized production capacity
Deviation from plan

If these are fixed…
80% of factory decisions improve.

KPI Identity Card (Practical Example)

KPI: Unit Cost

Definition: Actual cost to produce one unit
Formula:
(Raw material cost + processing cost + indirect overhead) ÷ good output
Authoritative source: Actual operational data + finance
Update frequency: Daily / Weekly
Owner: Finance
Contributors: Production – Maintenance – Planning
Alert threshold: ±3% vs. plan

This is an example of a decision-driving number, not just a report.

Where Do Conflicts Over “Number Ownership” Arise?

A) Definition Conflicts

A simple but deadly example:
What does “sales” mean?
Orders? Invoices? Shipments? Collections?

If the definition isn’t one → the number isn’t one → the decision isn’t one.

B) Timing Conflicts

Finance closes the month after X days
Operations talks day-by-day
Top management wants “now”

Without a time-bridging layer, everyone sees a different moment.

C) Approval Conflicts

Who has the right to say:

“This is the approved margin number”
“This is the real company inventory”

Without clear governance → the loudest voice wins.

The Hidden Cost of Not Having a Single Source of Truth

1) Slow and Expensive Decisions

Delays mean:

Lost opportunities
Escalating problems
Late corrective actions

2) Rework and Wasted Time

A large portion of management time is spent on:

Collecting numbers
Aligning reports
Explaining discrepancies

3) Poor Data Quality Cost

Gartner indicates that poor data quality costs organizations millions annually on average, based on multiple published research estimates.

A “wrong number” doesn’t cause one mistake…
It causes a chain of wrong decisions.

Who Owns What? (A Data Ownership Model)

To prevent conflict, distinguish between four roles:

Data Owner
Owns definitions and policies (e.g., CFO for finance, COO for operations).
Data Steward
Manages data quality and compliance operationally.
Data Producer
Creates or enters the data (sales, warehouses, production…).
Data Consumer
Top management and all departments.

Without this structure:

Responsibility becomes “everyone’s” → which means “no one’s.”

What Are the Critical Entities to Unify First?

Don’t start with everything—start with the core of the company.

(A) Master Data – “Company Identity”

Customers
Products
Suppliers
Units of measure
Branches and warehouses
Chart of accounts

Master Data Management (MDM) aims to maintain an authoritative source of truth and a “golden record.”

(B) Decision KPIs – “Decision Numbers”

Approved revenue
Profit margin
Product cost (Cost to Serve / Cost per Unit)
Inventory turnover
Production plan adherence
Cash collection and liquidity

Critical rule:
A KPI without a written definition = a KPI without value.

Each KPI must have a KPI Card that includes:

Name
Purpose (why it is used)
Formula
Authoritative data source
Update frequency
Approval authority for changes
Thresholds
Who receives alerts and what actions are taken

This turns a KPI from a “decorative number” into a leadership tool.

Practical Steps to Establish a Single Source of Truth in 30–60 Days

Weeks 1–2: Identify Decision Numbers

Select 10 numbers that would “confuse the company if confused”
Agree on initial definitions

Weeks 3–4: Unify Definitions

Create KPI Cards
Close the door on interpretations: one approved definition

Weeks 5–6: Assign Ownership & Governance

Official Data Owners
Official Data Stewards
Definition change control policy

Weeks 7–8: Monitor Data Quality

Reconciliation reports
Measure accuracy, completeness, timeliness, consistency

The goal is not perfection…
The goal is growing operational trust.

A 30-Minute Weekly Meeting That Builds the Culture

Meeting name: “One Truth – One Decision”

Agenda:

Are there critical number discrepancies this week?
Is the cause definition, source, timing, or entry?
One decision: what will we fix or adjust?
Owner and closure date

Initiative Success Indicators

After 6–8 weeks, you should see:

Less time spent in “number alignment” meetings
Faster decisions
Fewer discrepancies between reports
Improved trust between Finance and Operations

Conclusion

No single source of truth = no shared language inside the company.

Without a shared language:
decisions become negotiation—not leadership.

Therefore:
Whoever owns the number… owns the decision.

True leadership begins when the organization operates on
one truth that decisions are built upon.

Supporting Global References (to be listed at the end of the report)

Harvard Business Review – Decision-making & operational data
McKinsey & Company – Manufacturing performance & data integration
Gartner – Data quality & single source of truth
APICS – Manufacturing KPIs & planning accuracy