Through statistical analysis, companies can make good use of big data for greater success. This is a process that involves the collection, organization and critical examination of data to draw some conclusions. Statistical analysis in business can be achieved by hiring statisticians and making use of analysis software. This article highlights nine key benefits that manufacturing companies can realize by investing in statistical analysis.
Identifying Your Customer Base
A key benefit of statistical data analysis is that it plays a big role in identifying a company’s customer base. When a business knows who their customers are, it becomes easier to manufacture products that meet the specific needs of the target group. Additionally, segmenting a customer base helps in targeted marketing which is more cost-effective and efficient compared to focusing on a general market.
Identifying Production Quantities
Analyzing data can help in identifying the ideal production quantity that will meet the demands of the target customer. When the production quantity is lower than the demand, the company will end up missing out on sales and profits. Excess production should also be avoided because it can cause a negative impact. For instance, the company may be forced to lower prices in order to sell the excess products. By analyzing demand, sales history, customer data and other pieces of information, manufacturing companies can come up with more accurate figures for the production quantity.
Ability to Plan Production Based on Seasons
The demand for certain products fluctuates depending on the season. Some products will have a high demand during the holiday seasons whereas others will have a high demand during winter. Statistical analysis helps in identifying how consumer preferences change with the seasons, and this aids in planning production based on those preferences. By taking into account changing preferences and demand, manufacturing companies can exhaust all opportunities throughout the year.
Finding a Suitable Business Location
Analysis can also help in finding a suitable business location. You should choose a location wisely because it has an impact on your productivity, sales and operational costs. A good location is one where your customers can conveniently find you and you can easily reach out to them, one that gives you easy access to all the resources you need to keep your business going, and one whose cost isn’t above your budget. Also, it should be one that gives you an advantage over your competition.
In that light, when choosing a location, you have to gather and analyze information about your customers, the characteristics of the locations you are considering, business needs, competition in the area, and business trends.
Identifying the Best Marketing Strategies
With so much competition in the manufacturing industry, you will require some solid marketing strategies to succeed. In addition to segmenting customers, statistical analysis can also help in identifying the best channels to use to communicate with customers and prospects. Using the right channel will boost the popularity of your brand and increase sales and profits. Also, when you stop focusing on the wrong audience, you get a better return for your marketing efforts while keeping marketing costs low. Finally, through analysis, companies can measure the success of their marketing efforts. You should access the performance of your marketing campaigns regularly to avoid spending money on strategies that bear no fruit.
Developing New Products
Introducing new products is one of the strategies that manufacturing companies use to expand and increase profits. However, introducing new products is not easy and, if not done right, the product will not sell. An article on Harvard Business Review highlights a company’s failure to support fast growth, lack of consumer education and lack of market for the product as some of the key causes of product launches fail.
These are some of the factors you need to take into account when launching a new product to ensure it is successful. Statistical analysis can provide valuable information needed to make decisions when introducing new products in the market. Analysis can be done to establish the reliable markets for the product, and also to predict demand and sales. It can also help in identifying the perfect launch timing.
Productivity Evaluation and Improvement
Profitability of manufacturing companies relies largely on productivity. Statistical analysis can help in evaluating the productivity of your team members and departments and identifying measures you can take to boost productivity. This can be achieved by analyzing factors such as units produced or tasks accomplished, input and output, sales and number of customers, among many others. Improvements could be as simple as reorganizing the work schedules. In other cases, you may have to invest in bigger or more advanced equipment to boost productivity. An analysis of your company’s data will show you the areas that are ruining the productivity in your company. If you haven’t done a performance evaluation in a while, consider seeking for help from a statistician with an online masters in statistics.
Establishing Future Capital Needs
As your manufacturing business expands, the capital needs will change. Statistical analysis can help in projecting the future financial needs of your company. This is important in ensuring that you get enough time to plan for expansion. In addition to future financial needs, statistical analysis can also help in making solid financial decisions for the present.
Accurate Decision Making
Overall, statistical analysis can help manufacturing companies in making more accurate decisions. Since such decisions are backed up by information, they tend to be more reliable compared to the ones made based on guesswork. Analysis reduces the risk of making wrong decisions that can lead to company losses.
To get the most out of statistical analysis, don’t just make use of tools. Get some human input from qualified statisticians who have the skills to obtain and analyze complex data. Small manufacturing companies with fewer data analysis needs can hire freelance statisticians who are cheaper than full time employees. Qualified freelance statisticians charge roughly $30 an hour. Average annual salaries for statisticians range from $70,000 to $110,000 depending on the academic qualifications and the experience. Therefore, expect to pay more for a PhD graduate. However, the cost is worth it considering the benefits your company will get.