The manufacturing industry is undergoing change. Increasing competition, pandemic-related disruptions, and the growing skilled labor shortage are all exerting pressure on corporate leaders.
As a result, some manufacturers are doubling down on their digital transformation initiatives. In fact, according to Gartner, “advanced manufacturing companies are implementing new technologies like artificial intelligence, Internet of Things, data and analytics to drive growth and profitability.”
Given the data-intensive nature of manufacturing, more and more enterprises are turning to business intelligence software in particular. After all, there is a lot of valuable information hidden within production, supply chain, and sales-related metrics.
So, in today’s post, we’re going to dissect why manufacturers need business intelligence (BI) tools, what features they should possess, and discuss the common uses of this technology within the industry. Let’s get started.
Why Do Manufacturers Need Business Intelligence?
As previously mentioned, manufacturing processes are becoming more nuanced than ever. Thus, calling for intelligent decision-making that is grounded on reliable information. For this, the ability to extract meaningful insights from data is key, which is why business intelligence solutions are gaining popularity within the sector.
In short, BI tools are those that facilitate the collection, integration, and analysis of data from disparate sources. Overall, they simply exist to help your company make the most of the data you have on hand.
Usually, business intelligence software includes the following features:
- Dashboards displaying charts and graphs for quick visualization of most important statistics and trends
- Self-service data editing for your staff to access, transform, and store digital information without the aid of an IT department
- Advanced analytics that leverage data science and artificial intelligence for predictive modeling
- Secure user administration with role-based access permissions and activity logs to ensure data safety
Since the manufacturing industry produces a lot of data, BI software is a great fit for this field. Thanks to its ability to go through and analyze enormous amounts of digital information, BI can uncover inefficiencies in your operations and help improve existing workflows.
Difference Between ERP Systems and BI Software
Before we continue, it’s important to emphasize that a business intelligence solution isn’t the same as an enterprise resource planning (ERP) system you may have.
You see, ERP platforms help you avoid data silos by creating a single, centralized data architecture to collect, store, and manage your digital information. They can merge data from your accounting tools, CRM platforms, supply chain monitoring solutions, and other software to help you build a truly all-encompassing data strategy.
However, it is business intelligence solutions that actually analyze everything that has been collected, forecast upcoming trends, and create dashboards for easy-to-interpret manufacturing insights.
In short, an ERP tool collects enterprise data while a BI solution analyzes it and has the ability to make predictions about future performance. Plus, ERP systems integrate data between various departments, while BI software presents this combined digital information in a way that allows company leaders to quickly make informed decisions.
Uses of Business Intelligence in Manufacturing
Now that we’ve established the role of BI within the manufacturing industry, it’s time to look at some of its specific uses. Of course, as we’ve mentioned above, business intelligence tools can help deliver meaningful insights for pretty much all areas of your organization. However, there are five main applications that we’d like to focus on today.
First off, the main benefits that business intelligence solutions bring to manufacturing companies is facilitating data-driven decision-making. Thanks to the straightforward visualization of company data, you get the opportunity to easily grasp what the myriads of information are trying to tell you.
Moreover, with the help of BI, your team can gain a better view of company performance as KPI tracking is carried out in real-time. By developing a deeper understanding of why your business might be performing in one way or another, quick adjustments can be made to ensure the set out goals are met.
Another major use case of BI lies in production management. Manufacturers are always under pressure to minimize machine downtime, reduce bottlenecks, and generally optimize production processes to improve speed without sacrificing on quality. With business intelligence, this becomes more achievable.
By leveraging machine learning (ML) algorithms, your BI software can predict machine failure before it occurs and recommend maintenance tasks in order to avoid issues altogether. Moreover, if you combine the powers of ML with the Internet of Things (IoT), you’ll further improve predictive maintenance accuracy thanks to the ability of connected devices to collect data on your equipments’ performance.
So, if you’re looking to optimize your production, consider investing in a business intelligence solution and perhaps combining it with IoT technology in manufacturing. It could be the gamechanger you need to protect your business from errors, delays, and other inefficiencies.
Inventory management is one of the most crucial aspects of a manufacturing business. After all, inability to control stock levels efficiently can lead to significant losses or missed opportunities. Once again, BI can come to the rescue.
By helping you monitor inventory turnover rates and product defects across locations, BI tools will significantly ease the process of stock management. Moreover, if you decide to leverage predictive analytics, you’ll be able to anticipate demand levels and avoid overstocks as well as out-of-stocks. Thus, boosting profitability by maximizing all of your sales opportunities and avoiding having unnecessary products in storage.
Supply Chain Monitoring
The pandemic has wreaked havoc on the global supply chain, as is evidenced by the crisis of 2021. Across the world, shipments slowed and led to shortages within multiple product sectors. Now, with some speculating that supply chain issues could last well into the future, it’s more important than ever for manufacturers to improve logistics monitoring.
Business intelligence can organize data from various areas of your supply chain and deliver granular insight into its entire operations. Thus, establishing end-to-end supply chain visibility and helping prioritize shipments in the most efficient manner.
Moreover, BI tools can help visualize your distribution by monitoring the movement of goods and alerting you to potential disruptions in the supply chain so that you can take preventative action as quickly as possible.
Lastly, business intelligence in manufacturing can prove immensely valuable in managing your company’s finances.
Specifically, it can perform various types of analysis like profit and loss, cost-benefit, raw materials usage, and so on. Thus, helping you monitor the relevant financial information to develop accurate budgets and identify areas where costs can be reduced
Moreover, with the aid of BI and intelligent algorithms, you’ll get the chance to create profitability forecasts that incorporate entire manufacturing operations. Hence, leaving you prepared for what has yet to come.
Develop Business Intelligence Software for Better Manufacturing
Players within the manufacturing industry are increasingly relying on business intelligence to boost their performance. Thanks to the technology’s ability to facilitate data-driven decision-making and optimize production, supply chain, and inventory operations — it is slowly but surely becoming a highly demanded software to acquire.
At Velvetech, we know how important it is for manufacturers to have a deep understanding of their performance and areas that can be improved. For that reason, we are glad to offer business intelligence development services. So, whether you are ready to get started with your project or would simply like to have a chat and discuss your options — don’t hesitate to reach out.