Implementing Digital Transformation
Business Intelligence Real World Use Cases In Manufacturing
Using the right tools to optimize the modern factory
When machines and systems are plugged into BI, managers at a manufacturing plant can uncover a host of insights that can save time, improve safety, and lower costs. The case for BI in manufacturing is strong, as it can provide insights into all facets of the business, from the performance of an individual person on the assembly line to the company’s ability to scale. BI analytics that are carefully adjusted for manufacturing environments will provide companies with the basis for strategic growth plans. Managers can leverage the insights from BI to adjust internal workflows and push various components of the facility to reach higher KPIs.
When manufacturers direct multiple sets of structured and unstructured data into BI, they gain insight into a host of new correlations. For example, they can see how recently-enacted safety rules and new equipment related to the average workers’ compensation rates over the past six months, and how that then ties to overall costs. BI provides companies with layers of information that relate to each other in often unexpected ways.
Manufacturing firms that implement a well-designed BI platform can expect to see improvements in efficiency, inventory management, costs and revenue, and communication:
Boosting Efficiency throughout the Facility
BI analytics are an essential tool for judging and ultimately improving efficiency. Managers should first leverage BI to create a baseline of performance, identify problem areas, and then judge the impacts of adjustments over time. It’s ideally suited for judging employee outputs on an individual and team basis.
Manufacturers are using BI as part of their QC efforts, by examining metrics such as yield percentage, process uptime, and capacity utilization. BI can predict failures in the assembly line process (the result of poor quality controls) by analyzing the end results of the line and returns. This predictive component of BI means failures can be corrected before requiring discards or costly recalls, which can damage the company’s reputation.
Within a typical manufacturing setting there are dozens of BI-related metrics that point to possible inefficiencies. For example, BI can help determine the optimal warehouse configurations that will save the business money through efficient operations. Perhaps a manufacturer tracks the time a worker has to travel back and forth within the warehouse to retrieve a certain material. The analytics system could help managers decide if the material can/should be moved closer to the specific workers to cut down on delays/transit times, or if another part of the process should be adjusted. As manufacturing teams make such changes based on BI they’ll start to see the interconnectedness of various actions, and uncover new insights and strategies that might have otherwise remained hidden from view.
Dynamic Inventory Management
Manufacturers that have too much money tied up in inventory can be caught without the needed supplies to build products that their clients desperately need. BI provides insights into key inventory-related metrics such as “inventory carrying cost” and “inventory days of supply”. Managers can better judge their supplier network (and the impacts on inventory) with BI, by identifying those that are consistently late in delivering product, or have frequent “out of stock” situations when products are needed.
BI-based inventory analysis allows manufacturers to manage their largest assets, which are typically its on-hand completed products and the inventory of replacement and spare parts that go into the creation of those products. Understanding how inventory is moved and grows over time is essential, and requires data points from multiple sources including operations, sales, fulfillment, and finance. BI can be used to track inventory through the entire supply chain. Improved views into inventory help managers to anticipate short or long-term increases in demand and adjust materials and products accordingly.
Cost Reductions and Revenue Increases
Manufacture ring managers should always question if they have the right data that can help them measure the financial impacts of their business decisions. BI can provide the needed insights to show correlations between changes made within processes and inventory and downstream financial results.
BI is ideally suited to illustrate profitability and risk profiles, for example the potential rewards and risk that might come with introducing a complex (yet potentially lucrative) product line. Manufacturers can also more easily achieve economies of scale with BI, because they understand the overhead costs such as dollars-per-unit, inventory turns, and the cost-of-goods, and can then easily extrapolate those costs before expanding. This growth can be managed as managers also keep an eye on the competition, through BI-produced data such as retention penetration, customer acquisition metrics, and market share.
Every business runs on profit margins, and manufacturing is no different. BI tools can delineate profit contributions by each manufacturing segment and end customer, with data on the overall margin spread to provide a true reflection of profitability.
Improving Internal and External Communications
Advanced BI solutions that pull in multiple data sources together are able to spot problems in advance, so manufacturers have ample time to adjust accordingly. BI tools that can monitor the entire supply chain can identify bottlenecks, and this information can be instantly relayed to suppliers or partners so they can alter their own processes or expectations accordingly. The result is a leaner and more intelligent business that allows greater levels of transparency which are essential for building positive working relationships.
Manufacturing managers that want to embrace such a customer-centric approach must find the right metrics that tie to client satisfaction. BI is essential for measuring the right internal and external processes that tie into whether a client is pleased with the quality and speed of delivery, or if there are problems.
Embracing BI for Transformational Change
Managers at complex manufacturing facilities must analyze the competition, discover ways to optimize resource usage, and maximize productivity, all the while keeping an eye on costs. All of these interconnected goals can be better realized if the team has access to rich and reliable data from multiple sources. Reaching that type of data environment cannot be done with an “out of the box” BI solution. It takes a BI implementation team that takes the time to understand the business and then present a BI solution that exceeds business needs.
TechBlocks has deep experience in the development of BI platforms that are purpose built for manufacturing clients and their unique needs. Its consultants will conduct in-depth functional and technical consultations, performing gap analyses and requirements, vision alignments, and a document roadmap. Visit www.tblocks.com to learn more about transforming your facility’s processes through BI.
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