What is the importance of Data Analytics for manufacturing SMEs?
Manufacturers of every size have access to a proportionally large amount of data. In most cases it will be sales, payroll, operational, accounting and customer-related data, among other things.
Despite this, there are some businesses that don’t utilise their data to anywhere near its full potential. This is possibly because they are unaware of the gold-mine they’re sitting on, or they don’t have the tools in place to get the most out of this important asset.
Why is data so important?
In today’s world, it’s no stretch to say that data is king. Many argue that it is now the most valuable resource on the planet.
In the times of the Industrial Revolution, physical commodities such as coal would have been the most sought-after materials. But in the age of the internet and computers, it is data that fuels the economy.
Doing nothing with this huge repository of potential knowledge ensures that the most powerful weapon in your arsenal sits unused, stagnating under the surface.
What is Data Analytics?
Reporting is the process of organising a collection of data in a structured way, so that it is easier to comprehend. To carry out Data Analytics is to look at it in more depth, inspecting it closely, in order to gain useful insights (which could inform key decisions regarding your direction as a business).
Benefits of Data Analytics
Keep track of performance
Data Analytics is crucial for measuring your success. It could be a recipe for disaster if you don’t consistently analyse certain metrics. It’s not feasible or sustainable to only examine performance once something catastrophic has already happened.
Not only can this type of action help you to see what is going wrong, but it can also assist in determining what makes things run smoothly, so that you can strive towards maintaining and enhancing the processes that already exist.
It permits you to put in place useful Key Performance Indicators (KPIs). These barometers for success could possibly relate to sales or profitability figures. Having an agreed set of KPIs (for many different elements), that are easily accessible and understandable for all, ensures that all employees are working towards the same goals.
Save time and stay ahead of the curve
Collating data doesn’t have to be a long and arduous exercise. There are solutions (such as Manufacturing Software) that automate this task.
Manufacturers can use this type of software to generate a report at the click of a button. Possessing this kind of instant access to insightful data means that any strategic decisions being made are always based on current information.
Having an up-to-the-minute snapshot of your business’s financial health is highly advantageous, as it empowers you to be proactive rather than reactive. Which in turn allows you to optimise the ongoing processes, rather than always fighting fires.
Highly accurate forecasting could determine whether it’s sensible in this moment to be more cautious, or if it’s the right time to invest more heavily in specific areas.
Increase overall efficiency
Analysing inventory data clarifies which products are selling well, and which are perhaps barely selling at all. Looking at a stock performance report might underline the need for a complete catalogue overhaul (if such a drastic measure is necessary).
Carrying out similar steps for your entire supply chain might be key to detecting problems that are on the horizon. When scrutinising supplier-related data, it could become apparent that a particular provider frequently fails to deliver on time. This type of insight could facilitate a rethink of who you’re working with.
There could be a bottleneck in the logistical process that hasn’t yet surfaced. A faulty machine may be slowing down the entire production line. An analysis of machinery statistics could quickly pinpoint the culprit.
The act of looking at a report might not seem hugely profound, but it brings important factors into plain sight, that otherwise may never have been visible. In manufacturing, ignorance is certainly not bliss. Every operational tweak you go on to make as a result of this added awareness, plays a part in increasing overall efficiency.
Improve customer service
Another positive impact of Data Analytics is improved customer service. There’s an abundance of customer data that can be grasped by every selling company. You can use this information to enhance the experience of each consumer.
By taking a look at buying habits, you are equipped with the knowledge needed to provide a more tailored service. For example, knowing what customers regularly buy, and when they purchase it, means that you can understand their needs to a much greater degree.
Glancing at a report centred around customer communication preferences could dictate when and how to get in touch with buyers. It’s imperative to frequently carry out an analysis of how accurate (and up to date) your contact information is. Getting this wrong could unwittingly cause a relationship breakdown with long-standing customers.
What are the best analytics tools for manufacturers?
Some manufacturing SMEs may still manage their data by hand, and they may see no reason to change this if it works for them. But there are unquestionable risks and limitations that come with this method.
Without a unified collection of company information, there’s no free flow of centralised data between departments. This inevitably leads to a lot of duplicated stats.
If different areas of the business are sourcing their data from different locations, there’s no consistency of output either. Lack of cohesion can make for a disorderly work environment. Not only this, but carrying out processes manually increases the chance of human error too.
Implementing Manufacturing Software allows you to bring all areas of your organisation together seamlessly, whilst also enabling the creation of high-quality reports (that can draw data from anywhere within the system). This kind of functionality is useful, if for example, you have an ongoing project that is multifaceted.
Many employees in finance like to analyse data in Microsoft Excel and could envisage no other way of extracting value from their figures. This is not unfounded reverence either, as spreadsheets do possess great functionality in terms of the processes surrounding data mining.
However, there is a compromise to be found, in order to gain the best of both worlds. Some Manufacturing Software can integrate with Excel, allowing you to export the invaluable reports you have generated. In essence, you are powering your spreadsheets with dynamic financial data.
If you’re ready to unlock the true potential of your data, be sure to read more about our Manufacturing Software. This solution is tailored for small to medium-sized manufacturers, and now has the functionality to export reports to Microsoft Excel.