Integrating historically separate functions such as data access, reporting, exploration, analysis and forecasting, business intelligence gives decision makers the information they need to find solutions to business problems.

By Aggie Haslup

A regional manager turns on his laptop and within 15 minutes finds out that three of his sales representatives exceeded their quotas last month, two fell more than 10 percent short, and his Ohio-based customers have surpassed those in Illinois in terms of profitability.

Meanwhile, a shop floor manager reviews yesterday's scrap data over a cup of coffee. She notes that her main production line generated 50 percent more scrap yesterday afternoon than in the morning. Curious as to why, she types a few more strokes to discover that a new manager was running the line alone yesterday afternoon.

What do these two people have in common?

Both are successfully leveraging their company's data to make immediate smart business decisions. The regional manager can recognize his top sales reps, investigate potential problems with those who fell short last month, and plan on spending a little more time in Ohio next month. The shop floor manager can meet with her new manager, find out why the line generated so much scrap yesterday and prevent it from happening again; she can also approach the person responsible for training the new person.

Both are applying the power of business intelligence.


A New Solution To An Old Problem
Ever since computers became commonplace in the business world, companies have searched for ways to collect and store data electronically. Think about how much information has been collected on your company, competitors, suppliers, customers and carriers over the years.

As technology has advanced, businesses have made significant investments in information systems that collect and organize all of this information. The focus for most organizations has been on the gathering of this data — not on its retrieval. However, just because an organization owns vast amounts of data doesn't mean it is successfully leveraging that data to make smart business decisions.

Think about your own organization. Can you quickly find out which shop workers are the most productive? Which assembly line has the longest downtime? Which vendors have consistently delivered raw materials late? If the answer is no, think about the power that business intelligence can give you and your organization.

Business intelligence technology is new; the pain of extracting useful information from data is not. Business intelligence unlocks the full potential of the data to help every person in the organization make smart business decisions.


Architectural Advantages
By comparing traditional knowledge-enabling architectures with a business intelligence architecture, it becomes clear that the latter is more advantageous to any organization.

Traditional knowledge-enabling architectures do help an organization retrieve data to a certain extent. Paper-based reporting, such as a weekly sales report or a daily production report, can provide the information necessary to make smart decisions. Some organizations employ business analysts who spend their days retrieving data and plugging results into a spreadsheet to respond to information requests. Other organizations delegate this task to the information systems department. A few companies employ first-generation executive information systems or decision support systems to meet information requests.

The challenge with existing architectures is that they reach few individuals within an organization, often offer only predetermined views of the information, can be costly to develop, and may be creating redundant infrastructures within the organization. In addition, most traditional architectures require a lengthy turnaround time to fulfill an information request.

The difference between traditional knowledge-enabling systems and business intelligence is in the architecture used to deliver the information. Business intelligence is based on OLAP (online analytical processing) technology, which allows users to build a multidimensional "data cube" from information stored in relational or tabular databases.

Business intelligence gives authorized employees the ability to access and analyze corporate data from a business perspective any time they require the information. A graphical interface gives all employees an easy way to access this information on their own personal computers. In effect, the business intelligence architecture empowers employees to get the business data they need quickly — and without outside help — to leverage the company's investment in collecting the data in the first place.


Significance of Business Intelligence in Manufacturing
In these days of networks, client/server architecture and the World Wide Web, it is no longer acceptable to wait for needed information to run a business — particularly a manufacturing-focused business.

Andritz Inc., a capital equipment manufacturer for pulp, paper and feed processing industries, turned to business intelligence to get a better handle on its information.

"One of the things we wanted to monitor was our on-time shipping performance," said Mark Huber, project manager for new business systems at Andritz, which recently implemented the SytePower business intelligence solution from Symix. "By using business intelligence, we can easily identify weak spots like parts shortages or a particular vendor that is frequently late drop-shipping customer orders."

Business intelligence helps manufacturers like Andritz leverage their data to give them a competitive edge. For example, as more large manufacturers move toward Just-in-Time manufacturing standards, they are demanding that their suppliers (often mid-range manufacturers) adhere to the same rigorous standards. Business intelligence helps large manufacturers decide which mid-sized manufacturers deliver the highest quality product and which ones deliver on time. In turn, business intelligence helps the mid-sized manufacturer put its vendors under the same scrutiny.

Although manufacturers have a pent-up need for business intelligence technology, many also believe that a true business intelligence system is too good to be true.

So how does business intelligence work for a manufacturer? Business intelligence helps a manufacturer find "sweet spots" of information that are critical to making smart business decisions. Each dimension represents an aspect of your business that can impact a decision you need to make or didn't even know you needed to make. These business dimensions can be time, product, vendors or buyers, along with business measurements such as revenue, cost and gross profit. A business intelligence "cube" interrelates all of these dimensions together into a usable business model. Business intelligence helps manufacturers get to the right combination of factors quickly and easily, without wading through thousands of pages of printed reports.

For example, a manufacturer analyzing vendor performance can use business intelligence to see which vendors delivered early, late or on time during the past six months and whether any of those late deliveries delayed a customer order. With this information the manufacturer can take corrective action immediately.

Business intelligence also helps manufacturers identify the critical business issue: responding as quickly as possible to customer needs. Manufacturers need to analyze trends, understand the forces that drive their business and make timely, informed decisions. Business intelligence unleashes all of that for them.


Implementing Business Intelligence:
Tips for Success
Manufacturers interested in applying business intelligence technology can take one of three avenues: build the technology internally, purchase an off-the-shelf business intelligence package and customize it for their organization, or partner with an outside company to create a business intelligence solution. Each of these solutions vary in terms of investment and resources needed, as well as in the amount of control an organization has over the technology itself.

Following are seven tips for business intelligence success. Some apply to all three of the above avenues, while others apply to only one solution; but all provide important points to consider before, during and after the implementation of a business intelligence solution.

•Consider both business and technical issues before selecting a solution. Choosing a business intelligence solution involves a thorough understanding of the technology and the needs of a business. Implementing a solution that is technically advanced, but one that users won't use, has a negative return on investment. Users typically want a solution that is intuitive and user-friendly. Information systems wants a solution that is easy to support and distribute. The best solution is one that addresses at least 80 percent of the needs of the user community and IS organization alike.

•Obtain a true understanding of your data schema. Typically, only the database administrator knows where data resides in a manufacturer's system. Others in the organization may have trouble locating something as simple as an order number. Data is often stored under coded titles and in an illogical order. The first step to implementing business intelligence successfully is to understand your data schema — or partner with someone who does understand it. By understanding this schema, you will be able to create an easy-to-use point-and-click interface which will help everyone in your organization access the information easily.

•Create a "starter kit" for new users. Business intelligence is broad and flexible. Being exposed to the power of business intelligence can be overwhelming. Finding a partner that can offer your employees a starter kit, or creating such a kit if you're building business intelligence on your own, can be useful in the transition period. A starter kit allows employees to experiment with the technology without becoming overwhelmed. For example, a manager who gets used to turning to the business intelligence system to check which vendors are delivering late may start wishing she could determine which sales representatives were underperforming. As employees learn and understand the components of the starter kit, introduce them to additional applications of business intelligence.

•Remember that integration is key in manufacturing. As more and more manufacturers move to enterprise resource planning (ERP), it's important that new technologies such as business intelligence are not stand-alone solutions. Business intelligence delivers the power of business information by using existing data that is collected regularly through an ERP system. If you are developing business intelligence internally, address integration issues early on. If you are partnering with an outside company, be sure that your partner can offer reliable integration with your manufacturing system.

•Ensure that services are established or available. Like implementing any new technology, services such as installation, implementation, training and ongoing support must be available from the beginning. If you are developing a system internally, be sure you have allocated resources for those services; if you are seeking a partner, be sure your partner can provide those important services at a reasonable price.

•Invest in proven technology. If you decide to work with a partner in creating a business intelligence solution for your organization, be sure you invest in proven technology. Ask your potential partners to provide examples and references to illustrate how their business intelligence solution works and how they plan to integrate it into your existing ERP system.

•Remember that flexibility is important. To maximize your investment in business intelligence technology, be sure that the system you build or buy is flexible enough for the future. The beauty of business intelligence is the ability to extract business information from company data. What that information looks like tomorrow may be different from what it looks like today.

Copyright © 2020 by APICS — The Educational Society for Resource Management. All rights reserved.

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