Looking to take your manufacturing business from good to great? Start using business intelligence to help you better understand your organization, make more informed decisions, and build a more efficient and effective business.
What is Business Intelligence (BI)?
Business intelligence (BI) can roughly be defined as the process of turning raw data into meaningful and actionable insights about your organization. BI — or other terms you might have come across like big data, business analytics, data analytics — may sound intimidating, but they’re all really just a way of improving your operations by using and analyzing the data you already have at hand. And as more and more data becomes available for businesses to analyze and use, companies that can tap into all of this data, and pull out meaningful information, will be able to outstrip and out-perform their competitors in today’s fast paced business environment.
Do Manufacturing Companies Need BI?
In short — yes.
Manufacturing is actually one of the most data-intensive industries out there — just think about how much data you have from supply chain management to shop floor scheduling, from accounting to shipping and delivery. Letting all that data sit and go to waste — well not to waste exactly — but it’s a failed opportunity, as you can be getting so much more from your data. Using business intelligence to sift through and analyze your data will help you become a more efficient, a leaner, and a more productive organization. Your data can show you where there are gaps or inefficiencies in your production line, and help you improve your manufacturing processes.
Also, as most manufacturing companies use an ERP system to help them manage their operations, manufacturers already have a built-in system in place that is a central repository for all of their data, making it easy for manufacturers to use business intelligence to improve their operations. In the past businesses needed to comb through numerous spreadsheets and systems to pull out relevant data, and then analyze the data to create meaningful reports and actionable items. But an ERP makes it simple as it can sift through your data for you, and create customized reports that let you better understand your organization and manufacturing processes, and make better decisions.
Using BI to improve your operations can have a major impact on your bottom line. ERP software that provides accurate, real-time information about daily operations help companies reduce operational costs by 23% and administration costs by 22% (Source: Aberdeen Group).
What Can BI Solve for Manufacturing Companies?
Using big data can help manufacturing companies address a lot of common problems that plague manufacturers — and can be used across your organization, not just at the C-Suite level. Having access to real-time data and customizable reports empowers decision makers throughout your organization to make faster and better decisions. For example through dashboards that show real-time results, your production manager can keep a better eye on your shop floor, and make quick adjustments if a bottleneck occurs, or the scrap rate becomes too high. Having access to real-time data, and the ability to create custom reports — which are key, as just think about it: the information your production manager needs to see to create efficiencies is going to be different than what your purchasing manager needs — gives decision-makers in your organization access to the details they need to make the best decisions they can to move your organization forward.
And it goes without saying that data analytics helps those in the top brass make better decisions too — BI gives CEOs, CFOs, and COOs the accurate facts, figures, and information they need to make the tough decisions, and set the right direction for their companies. (Looking for more information on how to make strategic decisions for your manufacturing business? Read our blog on that topic here.)
Some of the ways BI can improve your organization are:
1. Production Scheduling
- Analyze employee, machine, workstation, and department capacity to learn how to efficiently move jobs through your shop
- Reduce bottlenecks by creating better schedules, based on actual capacities
2. Inventory Control
- Effectively track inventory use across jobs for better inventory management
- Avoid production interruptions by eliminating surprise material shortages and replenish based on actual on-the-job demand or for inventory.
3. Supply Chain Management
- Evaluate supplier performance on a regular basis to better negotiate prices, ensure timely deliveries, and maintain high standards of quality
4. Financial Management
- Develop budgets that incorporate production, operations, sales, and fulfillment, as well as up-to-date financial figures for optimal forecasting and planning
- Analyze information across multiple departments to set performance goals and create accurate profitability and financial models
5. Cost Management
- Trace job costs throughout the production process to get a true job cost
- Assimilate information from the entire production process to create more accurate quotes and estimates
BI Moves Companies Forward
Business intelligence lets you harness your corporate data, pull out valuable insights, and create dynamic reports to better understand your business, make key decisions, achieve your goals — and ultimately grow your business. Never feel lost in a sea of big data again.
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