<img height="1" width="1" style="display:none" src="https://www.facebook.com/tr?id=266211600481844&amp;ev=PageView&amp;noscript=1">

5 Business Intelligence Mistakes that Are Hurting Your Manufacturing Company

Mar 18, 2016 Business Intelligence Dennis Junk

BI_in_Manufacturing.jpgOver his 16 years working with Business Intelligence solutions, Aptera’s BI practice leader Aaron Crouch has noticed that some industries are more eager to adopt reporting and analytics architecture than others. Businesses in industries like healthcare, retail, or logistics (among many others) are quick to take the plunge, while manufacturing companies—at least until recently—have refused to dip a toe. 

This is somewhat understandable. Manufacturing is all about getting a bunch of moving parts to work together precisely and consistently. You wouldn’t want to devote all the time and resources it takes to get a reliable production line up and running only to turn around and start making tweaks. And if stability and consistency are the names of the game, why would you want to start crunching a bunch of numbers trying to find areas that could be improved? You’d just have to do more tweaking to take advantage of any opportunity you uncover. Then you’d have to go back and get all those moving parts synched up again.  

What many manufacturers are starting to discover, however, is that BI isn’t just about searching for opportunities to make huge, potentially disruptive shifts in the direction of the company. It’s in fact much more often about the types of smaller adjustments that over time can collectively lead to significant boosts in productivity.

Most manufacturers already rely heavily on reports and analytics when it comes to tracking performance and making decisions. One of the reasons more of them are starting to adopt new BI technologies, and the routine practices that go along with them, is that old-fashioned, manually generated reports are too cumbersome.

With the increasing volume of data from a widening array of sources, simply having Bob from IT print up a report every month is no longer cutting it. But BI experts like Crouch continue running into manufacturers whose thinking about Business Intelligence is a decade or more out of date. When we sat down to discuss how manufacturing businesses are using BI, he had a lot to say about the types of mistaken thinking that still get in the way of companies taking full advantage of the new technologies and practices.

The misconceptions tend to fall into one of these 5 categories:

1. Are All Reports Really Pretty Much the Same?

One of the things Crouch routinely hears when he talks to manufacturers about BI is “I already get all the numbers I need from the monthly report that Bob in IT creates.”

Many manufacturers initially resist transferring to new technologies and new practices because “They’re used to getting the same kind of report from the same person in IT every month, and these contain a certain set of numbers around revenue, inventory turns, and shipped sales—and those are all that really matter, right?”

This is an example of the industry’s bias toward stability and consistency. You do what you’ve always done before, hoping you’ll continue being as successful as you are now. “There are a few problems with this approach,” Crouch explains. “First, you’re getting answers to the same questions every month. What about the questions you haven’t thought of yet? With the right tools, you might identify opportunities that, without disrupting your entire business, can bring major increases in productivity.”

Meanwhile, you can count on your competitors constantly looking for opportunities to improve their processes. “While you’re getting answers to the same old questions,” Crouch points out, “other people are asking a completely different set of questions.” The stability model for your own company takes for granted that your competition, and the industry as a whole, will also remain stable.

And then there’s how much time it takes to put those old-style reports together. “Let’s not forget Bob,” Crouch says. “That poor guy spends a ridiculous amount of time every single month copying and pasting into and creating overcomplicated spreadsheets crammed with a thousand variations of the same formulas—and he’s really never getting ahead, only meeting the status quo.”

2. Is Your System Really Too Complex or Special for BI?

“Big Data? Data Warehouses? Hadoop? Data Science? Master Data Management? Where do I even start? Besides, we use a home-grown proprietary system. I’m not sure any of the BI tools would even work with it.” Some version of this complaint gets recited to Crouch on a regular basis.

His first response is usually, “Don’t rule out a better way to do things before you’ve really taken the time to understand your options.” He admits even he has trouble keeping up with all the latest buzzwords. But the information is out there, and you can only afford to ignore it for so long. 

For many manufacturers, one of the biggest stumbling blocks to implementing BI strategies used to be the difficulty of integrating the tools with their highly complex and highly customized IT systems. But BI technology has long since gotten to the point where, with sufficient planning, almost any system, no matter how complex or how custom, can be used as a source of data for analysis and better decision-making.

“A better mechanism doesn’t have to be bulky or intrusive,” Crouch points out. “It’s not going to break your hand-rolled system if done correctly. A little (or a lot) of planning can go a very long way, especially if you’re working with someone who knows what architecture and processes to use, someone who understands the technology, knows all the options, and has ‘been there, done that.’”

3. Is There Really No Way to Measure ROI?

For this one, the common grouse is, “BI tools are expensive. Things are working fine now. How do I justify the cost? For that matter, how do I even know if it’s working?”

There was a time when BI was about hooking up some tracking tools to measure a few KPIs. You could watch how well your processes were working and see which areas might need a little attention. But how well the tracking system itself was working was hard to determine.

Over the past several years, though, analytics tools have extended their reach so much that you can use them to track their own value. How much time are you saving by automating the report-writing process? How much has productivity increased since you put some data-driven decision into action? You can even use tools like Power BI to measure the ROI of marketing campaigns, traditionally the most difficult area to track.

Manufacturers today are using data to understand areas as disparate as:

  • What role safety and workers’ comp play in insurance premiums
  • Conditions leading to machine downtime and optimal repair strategies
  • The best placement of warehouse items

But Crouch hastens to add that Business Intelligence isn’t just about the technology. “The tools are very much part of that process, but not all of it—not even the biggest part,” he says. “It’s about a change in thinking and the creation of processes around it. Companies that think of BI simply as buying a tool simply don’t get their money’s worth out of it.” That said, even the returns from changes to underlying business processes can usually be measured.

4. Does BI Really Require Tons of Training?

“We’re going to stick with our old spreadsheets because we’re so busy and don’t have time to learn a new tool” is another frequent excuse.

Older BI systems often required weeks or months of training for users to sufficiently master. But, while some of the supporting technology still demands a good deal of specialized expertise to set up, you can get the hang of the basics of many of the reporting and visualization tools businesses are using today in only an hour or two.

“They basically threw away 20% of the functionality the users didn’t need in favor of making the remaining 80% of the product super intuitive to work with,” Crouch says. “Tools like Tableau and Power BI don't take 10 weeks to learn. You could probably start getting usable and meaningful insights from them after about 10 minutes, assuming you already have the right supporting tools and infrastructure in place.”   

5. Are You Accounting for How Protective One or a Few People in Your Organization Can Be of Their Cobbled-Together Process?

“This is my button. It’s a big, very complex button and only I can push it—so back off!” This one is Crouch’s favorite. (He admits it’s a paraphrase.)

Do you have a specific person or group in your organization impeding BI advancement simply because they don’t understand all the options and are afraid to admit it? The trick is to assure them that they’ll be brought along with any new initiatives, not to let them convince you that business-as-usual is the best default.

Most large organizations are resistant to change—often with good reason—and manufacturing businesses are if anything probably more conservative than those in other industries. But the pace of change when it comes to technology, consumer behavior, legal regulations, and the economy in general has made it all but impossible for a company to stay afloat by merely treading water.

An industry where daily business practices are as closely tied to technology as they are in manufacturing is actually where Business Intelligence holds the most potential. In earlier times, manufacturers may have been reluctant to search for opportunities to improve because they were afraid of disrupting their long-working processes. But quite often reconfiguring and recalibrating intricate processes is much easier with the right technology and the right information. You may not want to disrupt the harmonious functioning of so many moving parts, but that harmony won’t be nearly as hard to restore when you have data providing insight into precisely how each of those parts is moving. Or how those parts could be moving better.

Popular posts like this:

How Forward-Thinking Businesses Deal with Data Integration

Big Data vs Traditional Approaches to Enterprise Reporting

Power BI, Tableau, and the Shift to Self-Service Business Intelligence

Get Your BI Basics with Aptera 101: Business Intelligence

Guide to New Power BI

Posted in: Business Intelligence

Topics: Business Intelligence Analytics and Reporting Manufacturing

Comments