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Which Analytics and BI Technologies are the most popular in manufacturing?

  • 89% of the manufacturers who have analytics and Business Intelligence initiatives consider them successful, outpacing their peers in comparable industries. 

  • 49% of manufacturers expect their analytics and BI budgets to increase year-over-year, with 62% of all businesses interviewed saying self-service BI was essential to their businesses in 2020.

  • 47% prefer a best-of-breed solution for BI and analytics instead of their ERP vendor, who they consider 19% of the time. 

  • Manufacturers' top three analytics & BI objectives are to improve operational efficiencies that reduce costs, grow revenue and improve decision-making.

These and many other insights are from Dresner Advisory Services recently published research study, The State of BI, Data and Analytics in Manufacturing (client access reqd). Smart manufacturing techniques are gaining adoption across small and mid-tier manufacturers and this report successfully captures the leading indicators of that shift.

Real-Time Data is the fuel manufacturing analytics thrives on

Excelling at capturing data in real-time using Programmable Logic Controllers, sensors and IoT-based sensing devices is part of manufacturing's competitive reality in 2021. Getting the most out of smart manufacturing techniques with real-time data helped many manufacturers make it through 2020, as my previous post, Real-Time Data & Analytics Is A Manufacturers' Best Strategy In A Downturn, explains.

2021 begins with manufacturing CFOs wanting to know what's real in the sales pipelines, order backlogs and invoiced orders. Dresner Advisory Services’ report points out how analytics are being used to deliver the visibility CFOs need. Of the many manufacturing CFOs I've spoken with over the last twelve months, one clear message emerges: they want visibility down to the shop floor level to know what's going on with margins, costs, orders and aftermarket revenue. Manufacturing metrics for tracking production performance, summarized in an earlier article, The 10 Most Valuable Metrics In Smart Manufacturing, are gaining adoption as a result.

Key insights from Dresner Advisory Services The State of BI, Data and Analytics in Manufacturing are provided below:

Finance, Operations, Sales and Executive Management are the four most influential departments driving BI adoption in manufacturing today.

Manufacturers' highest priority is safeguarding employees' health and welfare on the shop floor while providing greater cost, revenue, backlog, shipment status and cost variance analyses to financial teams, including the CFO. Sales' CRM, Configure, Price & Quote (CPQ) and online ordering systems need real-time data combined with analytics and BI applications to produce the most accurate quotes possible. Ensuring accurate available-to-promise and capable-to-promise dates is a must-have, especially when selling engineer-to-order products.

Executive Management needs visibility across the entire operation to troubleshoot bottlenecks while defining long-range growth plans.


Reporting, Dashboards, Data Integration and Sales Planning are leading analytics and BI technology priorities for manufacturers today.

Consistent with the previous post of the 10 most valuable metrics in smart manufacturing, the priorities defined by the Dresner research team are essential for achieving real-time production and process monitoring across any manufacturing facility. The data driving reporting and dashboards need to be in real-time, so production and executive management can monitor quality, production efficiency, yield rates and more, all focused on keeping production lines running.


Manufacturing outpaces its peer industries in adopting Sales Planning, Mobile Device Support, Internet of Things (IoT) and In-Memory Analysis technologies to support their analytics and BI initiatives.

Sales Planning is indispensable in manufacturing, as it provides the needed data for deriving unit forecasts, margins per product, per order and overall revenue and profit projections. Mobile Device Support became essential in 2020 for achieving business continuity as the pandemic forced manufacturers to operate remotely. Many were able to keep operating their production centers from home using Mobile Device Support, protecting their workers' health in the process.

Business continuity lessons learned during 2020 translate into manufacturers' urgency to gain greater financial visibility across manufacturing operations, further making Mobile Device Support essential to operations. Internet of Things (IoT)-based sensors are gaining adoption for real-time production and process monitoring. Large-scale manufacturers use In-Memory Analysis in conjunction with smart manufacturing techniques to find new patterns in production data.


Improving shop floor visibility and control inside a production center and having greater track and traceability across supply chains defines which personas or role targets have the highest analytics and BI consumption.

Analytics and BI systems deliver the greatest value when Line Managers can access real-time data and troubleshoot problems on the shop floor. Line Managers rely on advanced manufacturing metrics to do their jobs, making real-time analytics and BI essential for keeping shop floors operating on schedule. Suppliers being the second-highest consuming persona or role is attributable to how quickly track and traceability applications were adopted last year in response to pandemic safety concerns across supply chains.


BI adoption is slower in manufacturing than in other industries, reflecting its gradual pace of technology adoption.

Mid-tier and larger, often multi-site manufactuers look for analytics and BI expertise when hiring for accounting, financial analysis, operations and sales management positions. It's common to find CFOs of multi-site mid-tier manufacturers with expertise using one or several analytics and BI applications. The new generation of CFOs and C-level executives know BI and analytics applications' value and drive its adoption. Dresner's research team projects 36 months until significant progress is made in manufacturing regarding BI adoption.


Conclusion

Making the transition to smart manufacturing begins with reliable data that provides manufacturers with new, often unexpected insights into increasing production efficiency and quality. Assessing risks to production and revenue forecasts using analytics and BI will gain momentum because manufacturers will be striving for the most accurate sales and margin forecasts they can get, further improving financial visibility. To obtain a copy of the report, consider becoming a client of Dresner Advisory Services. Please contact them on their website for more information.

The original version in English appeared on Forbes.com on January 3, 2021.

With the kind permission of the author, we were allowed to publish the post on this blog.

Louis Columbus

Software product marketing and product management leader with experience in marketing management, channel and direct sales with an emphasis in Cloud, catalog and content management, sales and product configuration, pricing, and quoting systems. Previous positions include product management at Ingram Cloud, product marketing at iBASEt, Plex Systems, senior analyst at AMR Research (now Gartner), marketing and business development at Cincom Systems, Ingram Micro, a SaaS start-up and at hardware companies. I am also a member of the Enterprise Irregulars. My background includes marketing, product management, sales and industry analyst roles in the enterprise software and IT industries.