manufacturing technology
Making Sense of Data
With increasing competition and ever demanding
customers, manufacturing continues to face new
challenges every day. By applying business intelligence
techniques, manufacturing organizations can enhance
operational management and realize new savings.
environments normally takes tracked and moved to meet cus-
a long time. To speed up the tomer demands. Added to this is
process, many systems use tools the need identify customer needs,
that employ summarization tech- maintain and improve customer
niques to reduce the volume of delight, and add new custom-
records by aggregating those with ers to remain in business and be
records together with common profitable. One solution to these
characteristics. Problem with this problems is to use business intel-
technique is its inherent inflexibil- ligence (BI) solutions.
ity and inability to cope with the
constantly changing information Applying BI
needs of manufacturing. Some of the areas where BI
One of the biggest challenges solutions can be applied in manu-
for the manufacturing industry facturing include:
is the need to constantly adjust l Inventory optimization:
to changes in demand. If manag- Manufacturing companies often
ers have a proper understanding have huge inventories to track
of costs and demand, they can and move. It is essential for them
make better decisions. Some to monitor their inventories to
manufacturers also have cus- reduce over-capacity, and ensure
tomer specific costing, where sufficient supplies. BI allows
improved visibility in procure-to- manufacturing companies to track
W
pay is helpful in optimizing the inventory usage across loca-
hile factory floor supply-side performance. Other tion and time, monitor inventory
automation has sig- companies with large product costs and profits through multiple
nificantly improved portfolios have many suppliers layers of information, and identify
all areas of process- with whom they need to negotiate inventory overage or obsolete or
ing for manufacturing companies, on cost and quality, and maintain slow moving inventory. In addition,
it has also created a stagger- large inventories that need to be users can set up alerts for instant
ing amount of data. Despite notification of low
hardware improvements that Utility of Business Intelligence inventory levels.
have enabled organizations to l Financial
● Increase the value of customer relationships
economically store the increased management:
data, there never seems to be ● Respond quickly to changing markets and Manufacturers
enough time or resources to meet company sensitivities need to focus on
the needs of factory managers ● Accelerate new product time-to-market both external profit
who face the “fact gap” that ● Reduce inventory investment building and inter-
exists between the data and the ● Improve planning, scheduling, and the pro- nal cost reductions
usable information required to curement schedule to improve their
make real business decisions. profit margins. BI
● Maintain and develop quality assurance
This is often because report allows manufac-
generation in high data volume ● Select and apply world-class technologies turers to analyze
36 june 30, 2009 | industry 2.0 - technology management for decision-makers www.industry20.com

information across multiple For many manufacturers,
sources to set performance keeping track of where their
goals and create sophisticated products are installed gives
profitability and financial them tremendous opportuni-
models. Manufacturers can ties for post-sales services
develop budgets that incor- and additional sales. Having
porate production, operation, adequate and accurate
sales, fulfilment, and finance installed base data is essen-
figures for optimal forecasting tial if manufacturers want
and planning. to maximize their profits
l Supply Chain and Order from this revenue source.
Management: BI can help BI’s comprehensive reporting
deliver deep customer insight and monitoring capabilities
into order and inventory data to enable manufacturers to track
make better decisions in each installed products, as well
stage of the order lifecycle. BI as the costs and revenues
enables users to assess inven- associated with after-sales
tory levels, determine likely services to determine the
product fulfilment needs before most cost-effective offerings.
the order has been booked, In addition, users can set up
quickly identify potential order real-time alerts for notifica-
backlog issues, and stay on top tion of maintenance schedule
of critical accounts receivable requirements to take advan-
(A/R) and daily sales outstand- tage of additional marketing
ing (DSO) issues. opportunities.
l Procurement and Spend: l Warranty analysis: Warran-
BI enables optimization of ties are one area where manu-
supply side performance facturers can greatly reduce
by integrating data from costs by ensuring original
across the enterprise value quality. By analyzing warranty
chain—thereby enabling costs, companies can identify
executives, managers and possible faulty manufacturing
frontline employees to make and detect emerging problem
more informed decisions. It areas. Through analysis of
increases visibility into the warranty claims, manufactur-
complete procure-to-pay ers can reduce and forecast
process, including comprehen- warranty costs and also iden-
sive spend and procurement tify fraudulent claims.
analysis, supplier perfor- BI can be effective for all
mance analysis, supplier pay- types of manufacturing organi-
ables analysis and employee zations—whether process or
expense analysis. discrete—since it can leverage
l Price-Volume Mix Analysis: all the sources of data avail-
Manufacturing companies able throughout the manu-
must process an immense facturing process to deliver a
amount of information regard- holistic view. It can help close
ing the pricing and volume of the fact gap by improving the
products. By integrating this availability and delivery of
massive amount of informa- actionable data with minimal
tion through in-depth analysis, IT involvement. Manufacturers
BI allows companies to gain should carefully consider using
insight into budget variances BI as a cost effective way to
and make better placement improve operations. n
decisions for products.
l Installed base tracking: Courtesy: MAIA Intelligence
www.industry20.com industry 2.0 - technology management for decision-makers | june 30, 2009 37