Smart decision-making in the business world has always been driven by data and analysis, especially in manufacturing shops where so many factors must be taken into consideration. Until computer systems became standard throughout the industry, production and performance data were tracked manually and disseminated throughout the company by hand. Enterprise Resource Planning (ERP) software revolutionized the industry by turning the tracking, organizing, and movement of real-time data into a lightning-fast digital process. As the technology advanced, ERP developed the ability to gather external data by integrating with third-party software programs.
We are now more than two decades into the 21st century, and more than ever manufacturing success starts with moving information throughout the business in a timely manner. Only now there is a lot more data to contend with, much of it coming from sources that were previously inaccessible to manufacturers. With technology and customer needs changing at a rapid pace, external data is fast becoming just as important as the internal data ERP provides.
Welcome to the Business Intelligence world.
ERP + BI = Comprehensive Analysis
Business intelligence is a process that uses software to source, organize, and analyze data in a manner that leads to actionable information and informed decision-making. The ERP Business Intelligence application tracks, measures and reports on the performance of the manufacturing enterprise. Business intelligence (BI) software imports external data from many different sources into the ERP, and presents it in user-friendly fashion via reports, dashboards, charts, graphs and other visual representations. These sources can include historical and current, third-party and in-house, as well as semi-structured data and unstructured data like social media.
Working together, ERP and BI software help manufacturers understand trends in customer buying patterns, material availability and pricing, where the manufacturing industry will likely be in the next few years, and other changes that can impact the business. Analysis of this information can help identify problems or issues, discover new revenue or business opportunities, and improve business decisions.
The trend toward integrating ERP and BI software is being driven to a large degree by the adoption of predictive modeling, a statistical technique used to predict future events. With ERP and BI software, businesses can compile millions of data points, both internal and external, and translate them into useful insights. Manufacturers throughout the industry are beginning to recognize that the ability to foresee patterns, trends and market movements and adjust their strategic plans accordingly can generate a significant competitive advantage.
ERP and BI are integrated and overlap in many ways, yet each has its own advantages. ERP’s strong point is it’s centralized system for tracking, organizing and sharing internal data, fostering major increases in production and organizational efficiency. BI takes the review and analysis of internal and external data to a new level, providing insights that would previously have gone undetected.
ERP provides information at the operational level by providing a clear picture of how each process in a manufacturing business is working. BI stands out in the decision-making process by analyzing the operational information in conjunction with the external data it generates. This enables manufacturers to dive deeper into their performance indicators to uncover trends that may impact everything from products and services to high-level strategy in their markets.
Let’s take a look at three key elements driving the integrated ERP/BI process.
ERP Dashboards have been around for a long time. Just as ERP software simplified manufacturing for ERP users, dashboards simplified data analytics by organizing all the data about a specific process or function on one screen. However, although manufacturers could easily review the data the raw numbers didn’t provide much actionable insight. In addition, dashboards operated as individual silos, requiring clicking over to other screens, spreadsheets or other programs dashboards required the time-consuming process of logging into other programs or accessing to gather all the data needed for thorough analysis.
A new trend in ERP is business intelligence dashboards that enable manufacturers to make actionable decisions by combining dashboard data and functionality in one screen. Instead of being limited to merely reviewing the data, dashboard users can now perform daily job functions directly from the dashboard screen for faster, more efficient work.
For example, a Purchase Order Dashboard screen tracks all the POs due to arrive today, those that are late, those that have received vendor confirmation, and more. Buyers can modify POs, confirm a PO receipt, and perform other daily tasks without having to click over to a different screen or application.
An Auto Purchasing Order Generation Dashboard further simplifies the material purchasing process by combining all Purchasing screens into one. Armed with the full extent of purchasing demand, buyers can make informed decisions to optimize pricing, quantity, and other purchasing factors. The ability to organize and sort only the data buyers want to see saves time, improves efficiency, and reduces labor costs while avoiding production delays due to parts arriving late.
Intelligent dashboards are a favorite with production control managers. A Supply and Demand dashboard can instantly access any data users want to know about a customer or job using only the customer number. An Open Work Order Dashboard lets users issue jobs, report on the status of open jobs, and verify closed out jobs. It also tracks jobs requiring different operations or outside services – all from one screen. With business intelligence dashboards, data review and analysis has never been quicker and simpler.
Key Performance Indicators (KPIs)
In the modern manufacturing environment, decisions need to swift as well as data-based. Yet, with so much information to absorb and analyze, that’s no easy task. With the latest advances in ERP dashboard design and performance, KPI metrics provide one of the quickest and most efficient sources of business intelligence.
Most ERP systems provide multiple built-in KPI dashboards that are searchable and flexible. These include everything from on summary dashboards that combine your most important KPIs on one screen to dashboards that focus on one specific KPI such as labor performance, quality, inventory, delivery, sales, and other performance metrics. These summary dashboards provide a big-picture view of the metric, yet they also allow users to quickly drill down to the detail level.
Another dashboard innovation – Dashboard Designer software – enables manufacturers to design and create interactive, shareable dashboards that focus on specific KPIs. At Global Shop Solutions we call them “tailored” dashboards. With this time-saving tool you can organize all the data you want on one screen, filter the data to access only what needs attention, format the data the way you want to see it, and minimize the use of paper. In essence, the software lets you manage information to fit your manufacturing processes rather than how the ERP software thinks you should do it.
When analyzing the data needed to make quick business decisions, it’s hard to beat KPI Dashboards for speed and flexibility. These powerful visual tools help you identify current customer, product and industry trends while forecasting changing customer needs and the products to meet them. From a business success standpoint you can make better decisions involving products and product lines, capital investment and possible new directions for your business.
Measuring your business health using KPI data lays a foundation for practicing evidenced-based management. It adds to your forecasting capabilities by encouraging changes in the way you think about your business. And it eliminates management by fire. Ultimately, KPIs are all about track, review, analyze and improve. By monitoring and analyzing them on a consistent basis, your business will be well-positioned to increase profits, reduce waste, improve quality, and deliver more value to your customers.
Forecasting involves peering into the future to predict what will happen with your customers, your business and your industry. Until recently it hasn’t enjoyed a reputation for accuracy due to the number of factors that can affect forecasting. However, with global manufacturing markets becoming increasingly entwined, operating in diverse markets requires a higher level of predictive accuracy. Combining ERP with BI can provide it.
ERP helps forecast expected customer behavior and the health of your business by providing complete histories of both. Because BI can mine data from so many different sources, it can have more impact on areas such as industrial and economic trends, new and upcoming technologies, consumer demand, supply chain performance, and other external metrics. Importing data from your ERP into your BI system will enable more accurate forecasting in both areas.
From a production standpoint one of the most important metrics to forecast is demand – how much customers will buy, how much material, and how much capacity it will require to meet the projected demand. ERP improves accuracy in these areas by providing a complete purchasing history of every customer, raw material pricing and demand, product and product line performance, and more. BI sources external data to forecast big picture issues such as industry trends, expected economic performance, potential material and supply chain shortages, and other situations that can impact your internal forecasting regarding how much product to make and how much to sell it for.
If there’s one thing the severe supply chain disruptions of a few years ago taught us it’s that companies with the most accurate forecasting have fewer problems obtaining the materials they need. Using ERP to forecast your ability to meet requested due dates and BI to get the global picture can help eliminate backlogs, avoid production shutdowns, meet promised lead times, and deliver your products to customers on time.