Business Intelligence (BI) helps you gain insight across your business from marketing and sales to materials and production to shipping logistics. Best of all it comes from your existing data, and it is not just for Fortune 500 multinationals.
Companies with less than 500 employees represent up to 99% of all manufacturers in the U.S. You can implement BI without having to invest in staff or expensive software platforms. Typically these are the biggest hurdles for smaller manufacturers to overcome. What you have in place is likely all you will need to make better business decisions leading to improved productivity across your organization.
You have plenty of challenges. U.S. GDP is expected to grow by only 2.0% to 2.5% YoY in 2017. MAPI is estimating 2.5% YoY growth in manufacturing production in 2017 following a dismal 2016. Furthermore, China's slowing growth and the commodities market continue to pressure manufacturers profits.
The answer is simple, focus on productivity and improve your performance with business intelligence.
You likely hear terms like business intelligence, big data, business analytics, and predictive analytics which are all related. What are they and how do you employ any of them with a substantial and fast payback?
There are many ways to think about BI. Himanshu Sharma at OptimizeSmart defines BI as follows. Business intelligence is using descriptive analytics to gain insight into your business activities. BI can tell you:
In the right hands, large sets of data can be visualized to understand better and identify patterns in your manufacturing data. Leading to insightful actions you can take to improve sales, margins, and customer satisfaction.
This is often the first step, a powerful one, that helps you ask and answer questions on making your business better. The follow-on step is predictive analytics which helps you model and predicts what will happen in the future. For now, we will focus on how manufacturers get started with BI visualizing and analyzing existing data to improve productivity and leave thepredictiveanalysis for another time.
Change in manufacturing continues at an impressive rate. Industry 4.0, as the Europeans call it, continues to push manufacturers in ways not dreamt of a decade ago let alone a generation ago.
The Internet of Things (IoT) is connecting not only IT networks but also your factory. Embedding computing power and sensors in robots and manufacturing devices of all kinds enable communicating in real-time. This provides you with the opportunity to respond instantly to maintenance items or out of spec processes before shipping defective products. However, IoT provides data that must be aggregated, processed and understood in real-time or as near real-time as possible.
Your ERP, sales CRM, email client, customer service systems add to the pile of data coming from your production devices and sensors. All of these disparate systems provide valuable insight into your processes.
BI allows you to act on all the different information and efficiently analyze it. Doing so enables ‘smart’ manufacturing, helping you innovate, and make better decisions fast.
The answer is everywhere - sales & marketing, customer service, supply chain, operations, inventory, human resources, and finance.
Let’s look at an example of how BI helps improve top level management productivity. It is September; you should be deep into your planning for next year. Sales and profit estimates are getting established. Typically the forecasting process starts an environmental analysis, i.e. what is happening outside of your production facility and warehouses. However, planning is usually an annual process requiring time from you, your senior staff and managers. Utilizing BI can improve your productivity during the planning season.
Forecasting can quickly analyze past trends and plan for the future. You likely forecast according to your overall business.