Analytics in Manufacturing; why you need more than a spreadsheet to get the most out of your data.
A recent survey by Tulip reported that manufacturing businesses store near 2 petabytes of new data on an annual basis. This staggering amount of information naturally requires powerful, accurate tools for leveraging data to drive smarter business decisions. Yet, the vast majority of manufacturers still hesitate to make the shift to modern analytics.
A decade ago, research by The Aberdeen Group found that the overwhelming majority of manufacturers (71%) favoured Excel spreadsheets over any available modern tools for data analysis. Unfortunately, things have not changed dramatically since, even as the modern business landscape has demanded greater flexibility and agility. In the UK, the manufacturing industry significantly outperforms others when it comes to adopting modern data analysis solutions, but according to data-science consultancy Peak Indicators, only about a fifth of all UK manufacturing businesses rely on data insights and predictive analytics.
The reason behind manufacturers’ preference for simple, yet outdated, tools like Excel spreadsheets is not a mystery. Excel is generally easy to use and doesn’t come with a steep learning curve. Visualising data is quite simple, and as the software is readily available, it is often seen as the most cost-effective solution to plan and organise internal operations.
The problem with Excel analytics in manufacturing
The problem with the simple, intuitive Excel interface is that… it is too simple. Excel is just not powerful enough to offer the sophisticated processing power complex manufacturing data requires. What’s more, Excel files become increasingly more difficult to manage the more people they’re shared with. Collaboration is essential for the modern business but sharing a single spreadsheet with multiple people within and outside your organisation quickly results in a complex file network that’s almost impossible to regularly update. What’s more, relying on Excel spreadsheets to store or analyse company information runs the risk of sensitive data getting lost or corrupted, for instance, if there is a hardware defect in the computer or a virus or malware running amok.
Relying on Excel to analyse data and drive business decision-making also comes with another major caveat: people usually file those spreadsheets manually, introducing human errors which can quickly add up and cause serious issues within your organisation. Additionally, while Excel is a comprehensive program, it’s by no means an expert solution for data analysis. Tiny conceptual errors, for example, related to pricing calculations, can lead to an avalanche of losses for your company.
As your company grows and scales up, so does the volume of data you need to process, which—if you rely on Excel alone—means a constantly ballooning amount of spreadsheets. This not only compounds the risk of human and non-human errors but also significantly reduces the agility of your team by slowing down your machines. While Excel is great for simple calculations and its easy-to-navigate software might be a good solution for a small start-up, it simply does not offer the processing and analytical power a growing manufacturer needs to guide smarter business decision-making.
Check out our Manufacturing Analytics Showcase page here to see a live demo of how your reporting dashboard could look in Power BI.
The case for using modern analytics
Shifting away from Excel and towards modern manufacturing analytics tools can sound like a daunting endeavour. Manufacturers often shy away from Enterprise Resource Planning programs because these are difficult to get started with, and there are often time costs and monetary expenses associated with their integration. However, modern analytics tools are no longer a luxury in the manufacturing sector: they’re a necessity, without which manufacturers can find themselves in a reactive, rather than active role. Modern analytics can dramatically improve the overall efficiency across the entire supply chain, increase productivity and control costs, as well as help you better understand, anticipate, and meet customer demands.
Designed specifically to collect and analyse data from various sources and subsequently reformat it in an easy-to-understand form, modern manufacturing analytics are transforming the industry. From making processes more seamless and improving speed and productivity to reducing costs and improving agility, the benefits of modern predictive analytics for manufacturing businesses are virtually endless.
How modern analytics can help manufacturers
Let’s take a look at some specific examples of how modern analytics can
improve your internal operations and help your business. Organic growth is one of the biggest selling points: predictive analytics make use of powerful KPIs such as cost-to-serve, customer expansion revenue, customer lifetime value and more, which allow manufacturers to analyse their products and leverage consumer data to improve profit margins. By understanding which products at what price per each region maximise sales, manufacturers can tailor their strategy in real time to drive profits and growth.
In fact, the ability to manage and make use of real-time data is one of the largest advantages of modern analytics in manufacturing. For instance, real-time data on the shop floor can quickly flag a workstation that is lagging behind, helping those in charge proactively identify upcoming delays down the line. If your manufacturing business is relying on outdated tools or manual reporting, whenever an incident or delay occurs, the variance might not get reported until the very next day, compromising every stage of the production schedule. This snowball effect can rapidly affect everything from shipping and materials handling.
Modern analytics tools are simply indispensable when it comes to understanding trends and sophisticated patterns from large volumes of data. Manufacturing analytics allows you to monitor and manage internal operations, while increasing productivity and operational efficiency by giving you context-awareness in real-time and synthesising historical trends into actionable knowledge. This means that by leveraging modern analytics tools, you can transform your business into a self-sustainable system. Using outdated tools such as Excel deprives you of the opportunity to leverage minute-by-minute, real-time data, which essentially means your decision-making boils down to clearing up a mess rather than anticipating and solving it proactively. Relying on manual reporting equates to basically reacting to any halts, interruptions, or incidents. Predictive maintenance, powered by modern analytics, on the other hand, can utilise aggregate data from real-time detectors on machinery and equipment to predict when a part might need to be replaced or if a machine is acting outside its normal parameters. This ensures incidents, machine failure and defects are far less likely to occur and dramatically reduces downtime. In short, by using modern analytics tools, you can draw informed conclusions and resolve problems before they have turned into a crisis, reducing costs, optimising performance and streamlining internal operations.
By connecting the machinery, equipment and sensors on the shop floor with the decision makers in the office, modern manufacturing analytics minimise the need for manual reporting and significantly decrease the risk of human error. This ensures greater collaboration between departments to allow for more flexibility and agility related to warehouse and inventory, as well as supply chain management. Times are changing, and so should businesses. Modern analytics have already transformed the manufacturing industry, shaping the face of the resilient, agile businesses of tomorrow by equipping them with the tools to make smarter business decisions with real-time and predictive data.