Business intelligence in manufacturing

The process of manufacturing products is a huge opportunity for data optimization. Raw materials need to be ordered, received, assembled, packaged, and shipped out for sale in the leanest way. Manufacturers follow the same steps to make each product, and from monitoring these processes with business intelligence, production teams find ways to be more efficient. Data-driven manufacturers use technology to automate most parts of the business - from production through to sales - for competitive advantage.

Pressures on the manufacturing industry

Many manufacturers are experiencing increasing prices in raw materials, while global competition is pressing prices of finished products down. This can easily result in smaller margins, forcing many companies to improve their processes. However, as competition increases, simple guesswork does not suffice. Processes need to be scrutinized both in terms of time spent from the start of production to the finished product that reaches the customer. In addition, manufacturers need to look closely at where money is spent and potentially lost. Continually reconsidering these processes can be time consuming, and inaccurate if it is not based on real, actionable data.

Take Sistema, a global plastic manufacturer who wants to save every bit of time possible and reduce handling along the line.

Sistema deployed Epicor Mattec, manufacturing execution software, about ten years ago to monitor all the elements that go into making its storage products. It then added Epicor E10 enterprise resource planning (ERP) software to track the actual cost of producing and shipping different products.

Recently Sistema’s CIO, Greg Heeley added Epicor Data Analytics (EDA), powered by Phocas to measure production metrics and find more efficiency improvements. The data analytics solution also helps with inventory optimization.

“There is a finite point where we can’t make a plastic container any faster. We are using EDA to find efficiencies in other areas too, such as increasing the speed of our back-end databases and enforcing greater data control,”says Heeley.

Business intelligence in manufacturing pinpoints problems

The numbers and analysis generated from the business intelligence solution runs Sistema’s daily production meetings where the team discuss what went well yesterday and previously, as well as what didn’t.

Production performance on ‘the shop floor’ is measured so Sistema’s production team can keep an eye on operating efficiencies and oversee the problems.

Previously, the production team was aware of the machine downtimes hours and where they took place, but the business intelligence data helps them know the reason for the downtime. EDA helps them to link more information to the production numbers such as payroll expenses and the size of crews rostered-on each day.

“EDA has allowed us to link staffing levels to productivity and machine running time. Previously we knew ten machines weren’t running. That’s it. This did not explain the ‘why’ in the story. The real reason that machines were down is that we didn’t have enough staff on that day to attend to them. The payroll data has provided another layer of supplementary information. EDA allows us to do systematic, proactive analysis rather than be reactionary so there is some balance around our analysis,” explains Heeley.

Efficient stock management is essential to Sistema’s commercial success and the business measures stock on a week-by-week basis. It follows an inventory min/max calculation methodology and maintains safety stock levels as an essential part of keeping suppliers happy.

Business intelligence in manufacturing increases sales

Monument Tools is one of the largest specialist hand tool manufacturers in Europe. The fifth generation manufacturer has around 800 products with a significant customer base across the US and the UK. Monument also exports to markets including Australia, South Africa and the Middle East.

Managing director Jonathon Collier said before implementing business intelligence, Monument had green screen terminals which did nothing more than process their sales orders and ledgers. With large amounts of data sitting in Monument's ERP system, the business desperately wanted to draw insights from their data but didn’t know how. “Phocas puts all the data there for you. It’s customized by product, date, costs and margin. As long as you know what you’re looking for, it’s there.”

Using Phocas, Monument Tools was able to see that one of their big UK customers was only selling certain groups of products in particular areas across their ten distribution centers. They were then able to relay this information back to the customer. “Phocas allowed us to interrogate our own shortcomings as well as our customers. This information is invaluable for us, especially when dealing with distributors,” Collier said.

Collier asserts that Phocas contributed to their three-year double-digit growth. “Without the analysis function, we wouldn’t be able to target the customer that we are."

BI benefits across the business

Business intelligence provides advantages for the entire manufacturing businesses, not just operations and planning. It allows sales managers to identify opportunities for cross-selling and up-selling. In addition, IT professionals report a 70% decrease in reporting requests. Finally, BI enables marketers to easily identify effective strategies. These are of course only a few of the benefits, and many other roles across the business can see the benefits in data-driven and effective decision making.

At Phocas, we pride ourselves in having 15 years of experience in meeting the needs of manufacturers. We understand your challenges and how we can help. We always listen closely to the needs of every single customer to ensure they get the exact manufacturing business intelligence solution they need. If you have any questions at all, please don’t hesitate to get in touch.

To read more about business intelligence in manufacturing download this manufacturing KPIs ebook.