Right Information at Right Time Matters - Business Intelligence for Manufacturing Industry With a robust and reliable understanding of costs and profitability and their sensitivity to changes in demand, manufacturers can make informed and incisive decisions about strategy and tactics, writes Sanjay Mehta in Manufacturing Today, March 2011 magazine.

1. Business intelligence BuSINESS INTEllIgENcE
inherent inflexibility and inability to cope
Right information at
with the constantly changing informa-
tion needs of manufacturing. “BI helps improve visibility and com-
BI gives manufacturers a better visibil-
ity of their financial performance and the munication across increasingly complex
insight and understanding to improve it.
manufacturing supply chains, while
right time matters
These include solutions for cost and prof-
itability analytics and solutions for oper-
ational planning and budgeting. Being satisfying customer demands for new
able to quickly assess the impact of inter-
nal and external changes, BI helps such products and product enhancements.”
companies become more agile and better
able to keep the bottom line on track.
With a robust and reliable understanding of costs and profitability and their
Areas of concern need a good tracking service to be able to In order to overcome these issues,
sensitivity to changes in demand, manufacturers can make informed and incisive Certain business aspects are prime con- better predict and prepare inventory and manufacturing organisations need to
cern areas for the manufacturing sector; production levels. Importantly, manufac- maintain optimum level of inventory so
decisions about strategy and tactics, writes Sanjay Mehta these include having a bird’s eye-view of turing companies need to continuously as to avoid overstock / short-supply and
customer information which helps sales benchmark distributors, regions, and bring innovative and profitable schemes
team to coordinate and collaborate cus- individual locations against each other in at marketing level. Business intelligence
W
ith increasing competition Better insights tomer interactions. Manufacturers also an attempt to foster increased attention is the right tool that will help in achiev-
and ever more demanding With a robust and reliable understanding need to trace the metrics and indica- to goals and metrics, as well as reward ing this.
customers, manufacturing of costs and profitability and their sensi- tors that improve customer satisfaction. high performers and aid underachievers. BI helps in keeping managers updated
is never easy. While fac- tivity to changes in demand, managers in Another area of concern is the lead time / equipped with state-of-the art and exact
tory floor automation has significantly manufacturing are able to make informed to fulfil customer orders across sales and information that helps in taking critical
improved all areas of processing for man- and incisive decisions about strategy and distribution channels. Moreover, compa- BI increases flexibility with business decisions rather than going on
ufacturing companies, it has also created tactics. They adopt Business Intelligence nies need to improve “order promising” the ability to: assumptions. It helps improve visibility
a staggering amount of data. There never (BI) reporting & analytics software as part (i.e., when a customer is promised deliv- l Quickly generate established reports and communication across increasingly
seems to be enough time or resources to of their strategic approach for attaining ery or issue resolution) through analysis l Easily create ad-hoc reports complex manufacturing supply chains,
meet the needs of factory managers who their goals. They streamline the informa- of historical statistics, expected lead time, l Isolate specific problems while satisfying customer demands for
face the ‘fact gap’ that exists between the tion flow both across the organisation and inventory levels. Obviously, they also l Analyze data across multiple systems new products as well as product enhance-
data and the usable information required and through the tiers of the supply chain need to analyse current usage of products l Integrate new data sources. ments. Very importantly, the relevant
to make real business decisions. to reduce cycle and manufacturing times to go for a new range of products. They information is available at the right time.
Agile enterprise is always one step and adapt quickly to market changes.
ahead of the competition, which cul- Reports generated in high data volume
tivates a responsive environment and environments normally take a long time
delivers major improvements in lead to run. To speed up report generation,
time, product quality, and lower produc- many systems use tools that employ a
tion costs. summarisation technique to reduce the
Optimising performance requires man- amount of records by aggregating records
agers to have an in depth understanding together with common characteristics.
of how products and customers consume Problem with this technique includes
resources and this is why manufacturers
adopt more sophisticated cost and profit-
ability analytics - solutions that go beyond BI helps companies to:
production and include the supply chain, l Increase the value of customer rela-
The author is CEO, MAIA Intelligence Pvt Ltd support functions and infrastructure. tionships
l Respond quickly to changing markets
Manufacturing MIS and company sensitivities
l Accelerate new product time-to-market
Material requirements Manufacturing resource plan- Just in time (JIT) inventory
l Reduce inventory investment
planning(MRP) ning (MRPII) system
l Improve planning, scheduling, and the
Determine when finished Network scheduling Inventory and materials deliv- procurement schedule
products are needed ered right before usage
l Maintain and develop quality assurance
Determine deadlines accord- Improve customer service l Select and apply world-class technologies.
ingly and productivity Dial gauge that shows various aspects of the turnover Dashboard showing turnover
52 Manufacturing Today march 2011 Manufacturing Today march 2011 53

2. Business intelligence
demand an optimal way of decision mak-
ing by the manufacturer. Each manufac-
turer has its own processes, own tacking
system, order processing and its own
challenges. All this add up to the need of
having effective BI system in place and
providing results out of it. Again there
has been long debate on the quality of
data that is available with manufacturing
industry as for most of them they have to
depend on external parties like retailers,
distributors, contractors, suppliers , its
own customers, others. If a proper feed
is given to Supply Chain and Order man-
agement that will definitely ensure deep
customer insight and inventory data for
better and effective decision making.
Dashboard showing country wise sales report Understanding change
One of the challenges that manufac-
turing industry face is due to changes
“Manufacturing organisations need to in demand. If managers have a proper
understanding of costs and demand,
maintain optimum level of inventory so they can make better decisions. Some of
the manufacturer’s also have a customer
as to avoid overstock / short-supply and specific costing. Improved Visibility in
Procure to Pay is helpful to optimise the
bring innovative and profitable schemes supply side performance.
Manufacturing companies’ product
at marketing level.” portfolios are larger to manage, has large
number of suppliers to negotiate on cost
and quality, maintain huge inventories
which need to be tracked and moved to
Decision making continuously monitor price, delivery, and meet customer demands. Along with this
With BI, one can assess cash-manage- product quality to determine best - and there is always a need to analyse / identify
ment and monitor operational effective- worst-performing suppliers. All this is customer need, maintain and improve
ness of the payables department to ensure possible with BI. customer delight, add customers so as to
lowest transaction costs. It is essential for BI can be accessed by top management remain in business and be profitable. BI
a manufacturer to identify most profit- who need to obtain strategic informa- definitely helps in making right decisions
able customers, products, and chan- tion that can help them decide the future to overcome these pressures and helps to
nels, and understand profitability driv- course of action, help in taking strategic manage and sustain in business in this
ers across regions, divisions, and profit decisions. Manufacturing industry need complex environments.
centres. This requires a comprehensive to look out for a solution that can help
approach which includes improving it lower lead time, help in reducing pro- The way ahead
inventory management for those prod- duction costs, improve product quality, BI is very effective for all types of manufac-
ucts that consistently fall into backlog better tracking and improve customer turing be it process, discrete, or automo-
due to a lack of appropriate stock levels. satisfaction. It needs to respond quickly tive. It can close the “fact gap” by improving
It is very important for the company to to changing market environments. In the the availability and delivery of actionable
have visibility into inventory activities to current environment delivering the key data with minimal IT involvement.
minimise unnecessary expenditures and information to the key people has gained BI for manufacturing industry lever-
optimise inventory to conserve work- extra importance that can help plan for ages all the sources of data available
ing capital. Equally important is having production, reduce hidden costs, keep throughout the manufacturing process
a detailed visibility into direct and indi- optimum level of inventory, and maxi- to deliver a holistic view for smart deci-
rect spending, and identify opportuni- mise profits. sions, based on data that accurately
ties for consolidation and reduction of Changing customer and distribu- reflects the true state of the entire manu-
costs. Moreover, the company needs to tor requirements, internal operations facturing process.
54 Manufacturing Today march 2011