Three steps to data mastery for 2020

Upcoming developments such as AI and deep learning, internet of things-enabled equipment and augmented/virtual reality might be revolutionary - but the high cost of entry means they are off limits to most medium manufacturers for now.

Deriving actionable insights from data, on the other hand, is a transformational upgrade that is available today for next to nothing.

The fact that data was the topic that stuck during the recent Smart Factory Expo isn’t a coincidence — producing actionable insights is a crucial area for manufacturers in 2020.

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Luckily, doing more with data is an easily attainable goal. The same cloud tools that are vital for a manufacturer to compete today will also provide the required insights to push the dial over the next 12 months. It’s just a matter of using them correctly.

In three steps, any medium business can mine transformational insights from the information their tools are collecting automatically.

1. Incorporate KPIs and reporting

The first step is to use KPIs alongside traditional fixed-period reporting.

Reporting and KPIs are not interchangeable. While similar on the surface, there are some significant differences between the two:

  • KPIs track progress against specific objectives. Reporting metrics answer a question about performance
  • Reporting assesses a particular fixed period. KPIs are real-time and comparative
  • KPIs are digestible at a glance. Reporting is a deeper dive

These differences make using both simultaneously essential. Relying solely on reporting for analytics means only tracking performance in retrospect, restricting analysis to those with the time and expertise to process complex reports and missing the opportunity to monitor progress against specific business goals.

For a complete guide to growing productivity, including how to use cloud technology and data together, download our free three-part series — created in conjunction with Unleashed Software.

The biggest blocker to using KPIs properly may be the sheer overwhelming number of options. KPIlibrary.com, a crowdsourced index of indicators, lists more than 6,500.

Help, however, is at hand. Accountants can advise on where to focus — and cloud software providers can recommend indicators for their areas of expertise.

For example, inventory software company Unleashed recommends these KPIs for manufacturers:

  • Supplier lead times (stated vs. actual): Manufacturing at scale requires absolute confidence in suppliers — which means tracking and comparing their actual performance
  • Margin at the product level: Taking a closer look at margins provides next-level insights on which lines are producing profit and where to grow sales revenue
  • Value of stock on POs and SOs: This is pivotal to optimising stock on hand, ensuring that you to stick to building what you sell while selling what you build
  • Average days to sell: Helps keep the right level of raw materials on hand for production and measures the popularity of each stock item

2. Give data to the right people

With a working KPI process in place, the second step towards data mastery becomes achievable: empowering the right people in the business with relevant insights at the right time.

Who are the right people? Anyone that makes impactful decisions. That might start with management, but it carries right through to sales, marketing, distribution, manufacturing, fulfilment, procurement and finance.

And it doesn’t just mean internal staff — externals such as accountants can give better advice with better statistics.

Relevant data means information that staff can turn into actionable insights. Working with KPIs is a solid first step towards relevancy, the next is to ensure that workers know which indicators to watch.

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A basic understanding of the information that sits underneath the KPI is also useful, so staff can quickly dig a little deeper.

There are two aspects to giving access to data at the right time. The first is to make getting insights as easy as possible. A report by Veritas earlier this year found that UK staff waste as much as two hours a day searching for statistics.

Alleviating that issue will provide an immediate boost to productivity. Plus, it will turn workers into data-based decision makers, able to prioritise the tasks that will add value.

The second is to provide a single source of truth. With so many inputs to play with, conflicting information can be a problem for manufacturers. So it pays to ensure that everyone is working from the same dataset.

Actionable insights: example

Salespeople are a great example of how actionable insights can work in practice. Giving sales easy access to margin KPIs at the product level means they can make proactive decisions on which lines to push, when to offer discounts and more.

But giving them access to actual supplier lead times risks confusing things with irrelevant insights — and giving them margin information that doesn’t match what management sees means staff could end up working at cross purposes.

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3. Focus on productivity

Now it’s time to put the third step into action: making sure that everyone is using data to achieve the same goal.

Empowering staff with the information they need to make informed decisions will help across the board, but adding clear direction into the mix results in a transformational improvement. Create a single topline goal for what to achieve in 2020, and staff can use data to ensure that their day-to-day tasks work towards that goal.

So make the last job in 2019 to benchmark current performance against your broad business goal — and make sure that all the KPIs staff use are benchmarked too.

When picking a goal, growing productivity stands out. 2020 could be the year that the productivity gap begins to close, with long-standing issues finally nearing their endgame. If that is the case, then the companies who can prioritise tasks that grow output while reducing input will have a clear advantage.

Data mastery is key to attaining that advantage — and in three simple steps, any modern manufacturer can achieve it.

For a complete guide to growing productivity, including how to use cloud technology and data together, download our free three-part series — created in conjunction with Unleashed Software.

*Images courtesy of Depositphotos.