Dawn Howarth takes a look at big data in manufacturing and the advantages a proper approach to utilising it can bring

Big data is big business and in an ever competitive and volatile market, it can mean the difference between pennies or pounds when it comes to profit. If utilised properly, big data can give an organisation an edge over its competitors, reducing costs and increasing margins. Although it’s the current business buzzword, data is nothing new – organisations have collected information for decades, merely skimming the surface when it comes to tapping into its business improvement potential. The difference is that now, we have the technological capabilities to do something exponentially useful with it, and its these new abilities that are set to transform the way the manufacturing industry operates.

Organisations have more access to data than ever before, drawing from information pools created from the collection of operational and point-of-sale statistics. It can be applied to almost every industry – retail, grocery, pharmaceutical and indeed, manufacturing. You just need to know how to use it, and therein lies the challenge.

The reality is that many organisations are failing to truly realise its potential. The clue is in the name; advanced analytics, with an emphasis on the advanced. A huge proportion of companies aren’t even at what Oliver Wight would call, a ‘capable’ level. They haven’t reached the maturity to competently handle data, meaning the complexities and logistics of big data aren’t being fully understood. In an attempt to tap into the trend, companies create dozens of data functions to examine reams of statistics. But, unless they dedicate time beforehand to understand what information they want, what purpose it’s going to serve and how they’re going to manage it, it’s an exercise in futility. Insights derived from data are only useful if they’re relevant.

Data quality is a major bugbear. A lot of highlevel big data is built up from very small, everyday transactional data, and companies tend to not pay as much attention to its quality as they need to. At Oliver Wight, one of our improvement techniques involves asking companies to validate their data to evaluate its true accuracy and more often than not, they find their small data accuracy is just five per cent to 15 per cent. Subsequently, either organisations ‘fill in the gaps’ using intuition instead of statistics, or resources are wasted scrubbing the information before it can be aggregated and analysed. Or, in a worst-case scenario, the data is used in its erroneous state with dire consequences. Advanced analytics are about transferring data to true knowledge, and you can only do that if you can trust it.

Even once data accuracy has improved, it needs to be translated from numbers into strategic business plans. The interpreters? Advanced analytics and data analysts. Advanced analytics is a mathematical tool, which is applied to business data for the purpose of assessing processes, with the view of improving practices and ultimately, minimising costs and maximising profits. Pivotal to this translation, is the data analyst. Highly talented individuals with a very particular skill set, data analysts take aggregated data and analyse it to reveal insights regarding how organisations operate.

For a lot of businesses, the shift from experience-intuition modes of working to data-driven models may mean structural reorganisation and how well companies evolve to adapt will impact their success long-term. There needs to be a cultural shift to embrace the era of big data and a willingness to invest in the talent and technology that will make big data worthwhile.

However, once big data is properly understood, the benefits are infinite. With any business, success is synonymous with keeping costs low and production high. In manufacturing, advanced analytics streamlines chains by identifying key determinants of processes, and assessing how best to improve them.

In process-based industries, one of the proven benefits of advanced analytics is increased yield, whether through improved production or reducing waste. Similarly, superior quality is a byproduct of advanced analysis, as insights emerge as to exactly which parameters influence yield variation. By carefully pinpointing which processes are underperforming and using data to assess the effect of the varying factors on production, organisations can decide on a course of action as to how to best tackle issues which are negatively affecting yield.

Greater forecast accuracy is a further benefit, as predictive analysis is refined through the use of big data. By using corresponding tools, such as modelling, and sophisticated IT systems to identify hidden patterns and interpret early signals, companies can anticipate future customer behaviours to inform their forward business plan with true knowledge. By understanding what the customer wants and is likely to want in the future, manufacturers can stay a step ahead in terms of meeting customer demand, with faster response times and shorter lead times.

Big data also has a role in optimising a lean supply chain, especially in transportation logistics, both in delivery raw material or shipping out products. Advanced analytics give organisations the ability to analyse weather patterns and forecasts, highlighting events that might cause delay in supply chain such as tornadoes, earthquakes and other natural disasters. Based on these statistics, companies can then form contingency plans – identifying back-up suppliers, for example – to enable them to continue to meet operational targets.

Big data and advanced analytics are clearly key to a successful business and there’s no doubt that the potential for big data and advanced analytics in the future is huge – but only for companies who have the correct data, people and processes to properly use it.

Dawn Howarth
Dawn Howarth is an Associate at Oliver Wight EAME. Oliver Wight believes that sustainable business improvement can only be delivered by your own people; so, unlike other consultancy firms, it transfers its knowledge to you. Pioneers of Sales and Operations Planning and originators of the fundamentals behind supply chain planning, Oliver Wight professionals are the acknowledged industry thought leaders for Integrated Business Planning (IBP). With a track record of more than 40 years of helping some of the world’s bestknown organisations, Oliver Wight will help you define your company’s vision for the future and deliver performance and financial results that last.