BI for manufacturing: what it is, and why you need it.

  • Richard Thelwell
  • November 25, 2014

b-for-manufacturing-business-intelligenceIf you’re thinking about BI for manufacturing, then the odds are good that you suspect that there’s room for improvement in your manufacturing operations. Likewise, it’s a reasonable bet that you’re also concerned that a lack of hard data is holding back improvement initiatives such as lean manufacturing or Six Sigma.

In which case, an investment in BI for manufacturing is unlikely to disappoint you. What’s more, it’s an investment which can come with a surprisingly low price-tag, and which can be implemented in weeks, rather than months.

And even better, unlike—say—investments in Manufacturing Execution Systems, or quality systems, an investment in BI for manufacturing will principally draw on the database underpinning your ERP system. The result? Answers that are firmly grounded in the detail of specific orders, specific customers, and specific problems.

What is BI for manufacturing?

The starting point is to define BI for manufacturing. Which, frankly, isn’t complicated.

What BI for manufacturing isn’t is the sort of Business Intelligence system that you may have already come across in some businesses—in other words, a BI tool which largely acts a reporting tool for the finance function, conducting various types of financial analysis.

BI for manufacturing extends this footprint much further, into the real day-to-day operational performance of the business. Into sales analysis, for instance. And into inventory analysis. And into the specifics of manufacturing operations, at least so far as these are visible to the business’s ERP system.

What do we mean by that reference to visibility? Simply this. That in terms of what happens on the factory floor, there’s generally a level of detail that falls outside that captured by your ERP system. The precise time—and cause—of a breakdown on a filling line, for instance.

So if that’s what you need to know, then a BI for manufacturing solution pointed at your ERP database won’t help—instead, we’d recommend a Manufacturing Execution System.

But if you simply want a wealth of other manufacturing-related business intelligence, then a BI for manufacturing solution leveraging your ERP system can most certainly help. Let’s look at how.

BI for manufacturing: how it helps.

Take sales analysis, for instance. At its crudest, sales analysis helps manufacturing businesses to sell more products to existing customers, increase transaction sizes in respect of new customers, and improve the targeting of sales promotion activity.

Moreover, sales analysis can also provide valuable insights into customer profitability—which is especially useful when a manufacturer’s customers insist on small order sizes, regularly break into production schedules, demand concessions on packaging or shipping charges, or have special requirements in terms of delivery frequency.

Inventory analysis, too, is a useful aspect of BI for manufacturing. Carried out regularly and in a timely manner, it can be an effective low cost alternative to high end sophisticated forecasting and inventory analysis approaches. What’s more, it can provide insights that can make existing inventory management systems deliver better results, by providing accurate ‘real life’ data to plug into safety stock and lead time formulae.

Inventory analysis in BI for manufacturing
Inventory analysis is a key feature of BI for manufacturing

Finally, BI for manufacturing can provide useful insights into factory floor problems. Although, as noted, it won’t usually provide data on things like machine breakdowns, it can answer vital questions such as:

  • Which customers’ orders tend to go overdue most often?
  • Which products and works orders tend to go overdue most often?
  • At which cost centres or operations does work-in-progress tend to accumulate?
  • At which cost centres or operations are scrap and yield losses highest?
  • How do actual operation lead times and processing times compare to standard operation lead times and processing times?

Armed with such information, manufacturing improvement initiatives can then drill down and eliminate the specific causal factors involved.

BI for manufacturing: how quickly can we get it?

Finally, here’s the really neat thing about BI for manufacturing: unlike traditional Business Intelligence projects, BI for manufacturing needn’t be a protracted, expensive, and—let’s be honest—risky BI initiative.

How come? Because by opting for a Cloud-based BI for manufacturing solution, much of the cost, complexity, and risk of a Business Intelligence project is simply eliminated. As is a lot of the elapsed time, too: in the case of Matillion BI, for instance, a typical implementation takes from four to eight weeks, from signed order to users being trained.

Better still, placing your BI for manufacturing solution in the Cloud also makes it more affordable.

Simply put, the hefty chunk of upfront capital investment called for by a traditional Business Intelligence project is replaced by a simple monthly subscription—operating expenditure, in short, and not capital expenditure.

Neatly, too, that monthly subscription can be funded by the manufacturing improvements that BI for manufacturing delivers—meaning that your BI for manufacturing project is cash flow positive right from the start.

To find out more about the BI for manufacturing, download our free E-book today