Business Intelligence is changing the manufacturing landscape. This article explains four key reasons as to why manufacturers should use BI.
Manufacturers haven’t had the easiest time over the last few years. With a recession lasting longer than most economists predicted, many have had to look closely at their operations and maximize efficiency. Manufacturers are beginning to adopt new technologies to help them achieve growth and improvements in productivity. The technology that is emerging as a key consideration is business intelligence software.
Why use business intelligence in manufacturing?
The manufacturing industry is a highly competitive environment, facing competition from global and domestic businesses. Manufacturers therefore need to use all the tools available to allow them to make better, more informed business decisions.
While most manufacturers have an extensive network of suppliers and customers, generating a huge amount of data,few take the right steps to use this to its full potential. After all, there is a huge difference between raw data and actionable information, and that difference is business intelligence. Managing large amounts of data in any business can be problematic, let alone manufacturers with multiple product lines and multiple customer and supplier accounts. Therefore finding the nuggets of data that are valuable is near on impossible. Business intelligence is the tool manufacturers are turning to for help to understand their data. The result: reduced costs, increased revenue and maximized customer share.
A brief overview of the manufacturing industry
The increasing globalization within the manufacturing industry offers benefits and challenges. The main challenge is managing additional suppliers and a global customer base. Other challenges include pressure to keep production costs down or capture sufficient profit from sales as raw material costs fluctuate. Additionally, manufacturers need to keep an eye on internally made and outsourced products to keep labor cost-effective.
After-sales is key to growth for manufacturers, allowing them to differentiate themselves from the competition to generate new revenue sources. If manufacturers decide to grow with after-sales it does present a few concerns, such as replacement parts, so there are more product lines to analyze and possibly another database to capture this information.
Customers’ buying behavior has taken a dramatic shift in recent years because they have easier access to information, meaning they’re more informed than ever before. This affects manufacturers as customers have greater buying power because they understand product performance and know what price to pay. This increased buyer knowledge decreases perception of differentiation, lowers loyalty and raises expectations and demands.
Manufacturers are transforming operations in a bid to combat dwindling profits, over-capacity, globalization, mergers, acquisitions and dealing with innovative technology. This change in operations is streamlining business processes for their supply chain and to align themselves with their suppliers, distributors and customers. Many are also consolidating their suppliers to reduce procurement costs and improve efficiency.
What’s driving business intelligence adoption in manufacturing?
The world we live in today is far closer to that of George Jetson than it is to Fred Flintstone’s. With this in mind, it’s no wonder that manufacturers are looking towards business intelligence to move towards the future.
Business intelligence software helps solve many challenges by pro-actively managing and utilizing business data to make better decisions. The benefits are simple: stay one step ahead of your competition by gaining enhanced customer insight.
Manufacturing is a complex industry with extensive supply chains, management reports, ever-changing customer buying behavior, accessibility of data and managing data constantly flowing in from multiple sources (suppliers, distributors, customers and in-house databases). For manufacturers therefore, Business intelligence fits like a glove; it’s designed to quickly and efficiently simplify large volumes of data for everyday needs.
Manufacturers face higher costs than most other industries, so it’s important to keep costs down while building profits. Business intelligence allows manufacturers to analyze profit and loss down to individual SKU levels, product sales analysis, raw materials and supplier costs, from a single system.
Reducing costs and finding new sales opportunities as well as improving operational efficiency and overhead costs are more key benefits of a business intelligence system. With these benefits being at the front of a manufacturer’s mindset, it’s no surprise that business intelligence is now the fourth largest application software segment and continues to grow year on year.
To take away:
1. Manufacturing businesses are always looking for an advantage over their competitors.
Business intelligence helps by:
- identifying market trends
- spotting competitor threats early
- making actionable tasks from business data
2. Optimize the value of each customer and maximize profits.
Business intelligence helps by:
- analyzing their previous spend so manufacturers can negotiate better prices
- finding new cross, link, up and switch-selling opportunities
- maintaining a good relationship with the customer by talking to them for the right reasons at the right time
3. Managing hundreds if not thousands of product lines is difficult even for established manufacturers.
Business intelligence helps by:
- letting the technology do the analysis to product selling trends
- providing sales professionals with an activity-driven workflow for their accounts for easier management
4. Reduce costs from warranty claims.
Business intelligence helps by:
- analyzing warranty costs to identify possible faulty manufacturing
- detecting emerging problem areas early
If you’re a manufacturer and you haven’t seen what business intelligence can do for your business, it’s time to act. Get a free demo of sales-i and transform your business today.
