Business Intelligence Serving Manufacturing Industry
In the current recession hit market, Manufacturing is one of the industries that is facing global competition that it has never experienced. Reductions in profit margins, Increase in raw material cost along with government regulations demand more innovative ways to look on to Optimize resources, gain productivity, minimize investment.
To overcome this we need to maintain optimum level of inventory so as to avoid overstock / short-supply and bring innovative and profitable schemes at marketing level. Business Intelligence is the right tool that will help us in achieving this.
BI helps in keeping managers updated / equipped with state-of-the art and exact information that helps in taking critical business decisions rather than going on assumptions.
Manufacturers use Business Intelligence software to improve visibility and communication across their increasingly complex supply chains, while satisfying customer demands for new products and product enhancements. Following business area are prime areas of concern:
- Having a bird’s eye-view of customer information which helps sales team to coordinate and collaborate customer interactions.
- Trace the metrics and indicators that improve customer satisfaction.
- Lead time to fulfill customer orders across sales and distribution channels.
- Improve “order promising” (i.e., when a customer is promised delivery or issue resolution) through analysis of historical statistics, expected lead time, and inventory levels
- Analysis of current usage of products to go for new range of products.
- Tracking service, to better predict and prepare inventory and production levels.
- Benchmark distributors, regions, and individual locations against each other in an attempt to foster increased attention to goals and metrics, as well as reward high performers and aid underachievers.
Some of the areas where BI Solutions can be applied in Manufacturing are:
Supply Chain and Order Management: Oracle Supply Chain and Order Management Analytics delivers deep customer insight into order and inventory data so you can make better decisions in each stage of the order lifecycle. Oracle Supply Chain and Order Management Analytics enables you to assess inventory levels, determine likely product fulfillment needs before the order has been booked, quickly identify potential order backlog issues, and stay on top of critical accounts receivable (A/R) and daily sales outstanding (DSO) issues. By leveraging actionable and fact-based insights, one can transform your current Supply Chain and Order Management processes to improve financial performance and customer satisfaction.
Financial Management: Oracle Financial Analytics helps front-line managers improve financial performance with complete, up-to-the-minute information on their department's expenses and revenue contributions. KPI’s and reports enable financial managers to improve cash flow, lower costs, and increase profitability while maintaining more accurate, timely, and transparent financial reporting that helps ensure Sarbanes-Oxley compliance.
Procurement and Spend: Oracle Procurement & Spend Analytics, enables us to optimize supply side performance by integrating data from across the enterprise value chain—enabling executives, managers, and frontline employees to make more informed decisions. It increases visibility into the complete procure-to-pay process, including comprehensive spend and procurement analysis, supplier performance analysis, supplier payables analysis, and employee expense analysis. Through complete end-to-end insight into the factors that impact company performance, you can significantly reduce costs, enhance profitability, increase customer satisfaction, and gain competitive advantage
Using above one can assess cash-management and monitor operational effectiveness of the payables department to ensure lowest transaction costs. Identify most profitable customers, products, and channels, and understand profitability drivers across regions, divisions, and profit centers. Improve inventory management for those products that consistently fall into backlog due to a lack of appropriate stock levels. Gain visibility into inventory activities to minimize unnecessary expenditures and optimize inventory to conserve working capital. Gain detailed visibility into direct and indirect spending, and identify opportunities for consolidation and reduction of costs. Monitor price, delivery, and product quality to determine best - and worst - performing suppliers.
Business Intelligence tools mainly are being accessed by top Management who need to obtain strategic information that can help them decide the future course of action, help in taking strategic decisions. Business Intelligence is still being more equipped for decision making, predicting trends, analysis, delivering information.
Being part of Manufacturing Industry we need to look out for a solution that can help us in lowering lead time, can help in reducing production costs, improve product quality, better tracking and improve customer satisfaction. Manufacturing Industry need to respond quickly to changing market environments. In the current environment delivering the key information to the key people has gained extra importance that can help plan for production, reduce hidden costs, keep optimum level of inventory, and maximize profits.
Changing Customer and Distributor requirements, Internal Operations demand an optimal way of decision making by the manufacturer. Each manufacturer has his 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 management that will definitely ensure deep customer insight and inventory data for better and effective decision making.
One of the challenges that manufacturing industry face is due to changes in demand. If we have a proper understanding of costs and demand, managers can make better decisions. Some of the manufacturer’s also have a customer specific costing, delivery Bi will be helpful in finding the most appropriate way.
Improved Visibility in Procure to Pay is helpful to optimize the supply side performance.
Manufacturing Companies product portfolios are larger to manage, large number of supplier’s to negotiate on cost and quality, maintain huge inventories which need to be tracked and moved to meet customer demands. Along with this there is always a need to analyze/identify customer need, maintain and improve customer delight, add customers so as to remain in business and profitable. BI will definitely be of help in making right decisions to overcome these pressures and will help to manage and sustain in business in this complex environments.