Knowledge is power, especially in the electronics supply chain. Once available only to big OEMs with big IT budgets, business intelligence (BI) capabilities are becoming affordable and implementable for even mid-sized manufacturing organizations.
“I would say that business intelligence has a slightly stronger foothold in the electronics industry today than it has in the past,” said Donna Fritz, vice president of product management at Take Supply Chain, which makes supply chain management (SCM) solutions. “There has been a lot of focus on soloed improvement within electronics manufacturing companies but without improvement across the organization.
This broader and deeper look into the industry, though, is what's needed to get to the next level of supply chain operation. “These organizations have to learn how to pull the data spread through the organization together and what to do with all that data once they have it in one place,” said Fritz. “There comes a point that there is a realization that they can't do more with just addressing cost centers or siloes.”
Implementing business intelligence, though, is more than just buying software or signing up for a cloud-based service. Smart organizations take strategic action—and really consider the particular needs of the business. Fritz suggests a four step process that will get an electronics OEM from the idea of leveraging business intelligence to successful technology adoption.
1. Know how and what you measure/want to measure: Organizations should consider carefully what key performance indicators (KPIs) are most important to their business and start by measuring those. “If you have existing ways that you measure the business, look at those first,” said Fritz. “Choose a basic, low risk project that will take KPIs and get them to where data is coming out systems rather than out of people.”
Consider what might yield tangible results, such as improving on-time supplier delivery or forecasting accuracy. “A lot of it has to do with aligning sales forecasts and operational planning all the way to procurement and warehousing,” said Fritz. “The best advice I an give is to start with what you know and be disciplined and deliberate.”
2. Know your data sources: Consider whether there are reports that are being created manually, or data sources that are being combined manually. Make sure to gather tribal knowledge and don't forget to include antiquated systems that may have been neglected. “A lot of this step can help with casual brainstorming,” said Fritz. “I would talk to people on the manufacturing line, the warehouse manager, and the shipping manager. A ten minute conversation on the manufacturing floor yields a wealth of information.”
Also consult with the information technology department. “You need a functional representative with reasonable authority,” said Fritz. Representatives from manufacturing, logistics, warehousing, and supply chain management should also be included on the team.
3. Know why and how you use/will use the data: Too often, organizations start with what a particular business solution can do, rather than what information will actually be most strategic to the organization. Consider how your organization is currently measuring KPIs and the purpose of each. Ask yourself whether the thing being measured actually drives business. “Create a needs list rather than a wish list,” said Fritz. “If you focus on getting everything, invariably it fails because it's too complicated and too hard to implement.”
Once the organizations figures out where it needs to go, it needs to map out the best path for getting there. Also consider growth and future needs. “Make sure it remains a reasonably collaborative process, where each company area helps to identify data types and sources,” Fritz added.
4. Shop around. Make sure to choose a business intelligence system that fits the needs of your organization, rather than the one that is most feature rich or least expensive. The Internet offers a wealth of information about various products to use as a starting point.It may also be useful to sit in on a seminar or two about business intelligence or even to engage a BI consultant who understands the needs of mid-sized organizations. “Typically, you want someone who can be low-pressure and who is looking to give you exactly what you need rather than adding on a bunch of modules,” said Fritz.
Look for a solution that can tie data together from a number of disparate systems, that allows you to build your own reports rather than only offering predefined ones, and that your organization can readily manage on its own (without always bringing in a high-priced IT muscle for special programming). Also consider data security. “Better systems have layers of authentication and security in them,” Fritz said.
Too often, smaller organizations resist tackling implementation of BI for fear that the project will be too time consuming or costly. However, by following these steps, it's possible to get a just-right BI system up and running quickly.