In simple terms, business intelligence in manufacturing (also known as manufacturing intelligence) is the ability to provide actionable insights into the manufacturing process.

You will be surprised to know that the manufacturing industry is one of the most data-intensive industries. So much is involved in a typical manufacturing plant. You need to handle raw materials. You need to track supply chain management. There is shipping and delivery you need to take care of. You need to track individual performance of the workers working in your manufacturing plant. You need to continuously assess the performance of the machinery and the equipment. There is pilferage and wastage. All these, and much more, can have direct and indirect impact on your entire manufacturing process and hence, deep insights into the working of all these factors are must for optimized production.

A good thing is, you may already have an ERP system in place and if this ERP system works the way it should, it must already be generating lots of real-time data. This data can be used by your business intelligence system. Before ERP, manufacturing plants used  spreadsheets and simple databases to collect, preserve and draw information about various aspects of their manufacturing process but with the advent of the ERP systems, most of the data collection and reporting happens automatically.

How Is Business Intelligence Used By The Manufacturing Industry?

As mentioned above, manufacturing has multiple facets. Hence, business intelligence software can be used by the manufacturing industry to streamline and coordinate different aspects of the manufacturing process. Below we are listing 6 real-world examples of how business intelligence can be used, or is used, in the manufacturing industry.

Bi For Financial Management

Financial management isn’t just confined to manufacturing, but it is very important to know how much is being spent at your manufacturing plant on the procurement of raw materials, the supply and the warehousing of those raw materials, the power being used, the procurement and maintenance of the machinery, the salary and other benefits of the workforce, the maintenance of the entire property and the overall impact these costs have on the price of the product that you finally sell.

A competent BI system can help you optimize these costs. It can help you identify where money can be saved.

Production Optimization And Operational Efficiency

Power can be used judiciously. The performance of the equipment can be monitored round-the-clock and servicing can be done in case the performance deteriorates. You can experiment with the quantity of raw material being used and see if the quantity can be reduced without compromising production and quality. Suggestions can be made to the staff to make certain changes in their way of working for greater collaboration and productivity.

Predictive analytics of the BI system can be used to scale up or scale-down manufacturing according to the emerging market conditions and the cost of warehousing finished goods. For example, if historical data tells you that it is more economical to store finished goods in the warehouse than manufacture them as and when needed, you can go ahead with manufacturing, but if the insights are different, you can hold back production and use the resources of your manufacturing facility for other production purposes.

Bi For Inventory Management

As a manufacturer it is very important for you to know exactly how much inventory you have at hand and how much you’re going to need in the foreseeable future. You also need to accommodate unforeseen spikes or slumps.

In large manufacturing plants, it is often difficult to pinpoint where wasteful expenditure is being incurred on getting inventory that is not needed. For example, you may keep on ordering inventory for a product that hasn’t been selling well in recent months or an item that is going out of fashion. Since sales data is not being paired with the inventory data, there is a knowledge gap and the raw material for the item is still being stocked up.

Keeping goods long after they have been manufactured can be an unnecessary cost. Some goods may be more costly to keep than others and they need to be pushed ahead into the sales channel. These insights are difficult to obtain unless data is gathered and analyzed at every possible juncture of your manufacturing process.

Some inventory products expire, for example in the pharmaceutical industry. You need real-time inventory data for these products so that you can make arrangements accordingly or at least halt the supply if your current stock hasn’t been sold yet.

Bi For Predictive Maintenance Of Machinery And Equipment

Maintenance and upgradation of machinery and equipment are ongoing processes in a manufacturing plant. Often, machinery and equipment are used until there is a glitch or they completely stop working. Changes in production quality and quantity are difficult to detect unless there is a drastic change. This deterioration in quality and quantity can only be detected when final reports are generated quarterly or yearly and by that time, it might be quite late.

A business intelligence service for your manufacturing unit can help you know the status of your machinery and equipment in real-time so that you can order maintenance before quality and quantity deteriorate. This can save you lots of trouble in future. There is also a risk of injury to your workers if your infrastructure is not well maintained. Through the data obtained from your BI system, you can schedule in advance when your machine and equipment need maintenance and upgradation.

Bi For Robotics And Automation

Robotics and automation can increase your production manifold. For automation to become successful, you need precise data. You can automate repetitive tasks and reduce human error to negligible rates, bringing down your manufacturing costs significantly in the process. You can also shift your human workers to more productive areas by automating processes that can be handled by robotic equipment. Hazardous jobs such as welding, chemical painting, picking heavy material, drilling and grinding can be handled by machines when the processes have been automated using data obtained from your business intelligence systems.

Bi In Customized Production And Design Customization

An increasing number of customers are demanding customized designs. From custom caps to custom cars, people prefer to have a unique product in their hands and with specialized manufacturing equipment, these are easily achievable. Using business intelligence, you can reduce costs of customized production by analyzing which aspect of customization is being demanded the most by consumers and then pre-manufacturing those aspects in bulk.

For example, if a greater number of consumers are demanding water bottles with metal chains, the production of metal chains can be increased and at the same time, when fewer people are demanding water bottles with a narrow base, broader bases can be manufactured in greater quantity.

From unexpected machinery failure to defective product delivery to obstacles in the supply chain, there can be numerous hiccups and unfavorable circumstances faced by a typical manufacturing plant. But over the years, a distinct pattern emerges. This pattern can be detected by your business intelligence system. When you recognize this pattern, you can take preventive measures in advance.