search manufacturing bi 0211

8/6/2019 Search Manufacturing BI 0211

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k 3Can businessintelligence softwarehelp manufacturers

improve efficiency?

k 7Making the case forbusiness intelligencein manufacturing

k 11Getting startedwith manufacturing

business intelligencesoftware systems

k 15Seven key questionsfor manufacturingBI tools evaluation How to get

started with

businessintelligence inmanufacturing

BY CHRIS MAXCER

A SearchManufacturingERP.com eBook


2/20

W E L C O M E

How to get startedwith BI inmanufacturing

FACING INCREASING pressures from globalization and a sagging economy, manu-facturers are between a rock and a hard spot. And many of them see businessintelligence (BI) as an escape route. As one observer puts it, A lack of informa-tion is what got us into this mess in the first place, so we had better start con-verting raw meaningless data into meaningful and actionable information sowe can get out of this mess sooner rather than later.

But does BI hold the answers for every manufacturer? How does BI differfrom manufacturing intelligence? How can a manufacturer calculate the ROIfrom a BI implementation? How important is the quality of the data the BI sys-tem is parsing? There are many BI tools out there; how does a manufacturerknow which are the right ones?

This eBook will answer these questions:

I Can business intelligence software help manufacturersimprove efficiency?

I How should manufacturing organizations make the casefor business intelligence?

I How should manufacturers get started with business intelligencesoftware systems?

I What are the best practices for evaluating BI tools for manufacturing?

H OW TO GET S TAR TED WI TH B I I N M AN UF AC TUR I N G

aHOW TO GET

STARTED

aCAN BI IMPROVE

EFFICIENCY?

aBI IN MANU-

FACTURING

aGETTING

STARTED WITH

MANUFACTURING

BI SOFTWARE

SYSTEMS

aSEVEN KEY

QUESTIONS FOR

MANUFACTURING

BI TOOLS

EVALUATIONS


3/20

MANUFACTURING ORGANIZATIONS arefacing more pressure than everbefore, and the pressure just keepsrising. Globalization and new compe-tition, in addition to weak economies,are forcing manufacturers to run lean-er and meaner, while they must pro-duce a greater number of types ofproducts, if not custom products, aswell as maintain increasingly difficultstandards.

How can manufacturers ensure thatevery order is efficient and profitablewhile saving money or even takingon new business?

Does business intelligence (BI) formanufacturers hold the answers?

I think most leading thinkers

correctly believe a lack of informationis what got us into this mess in thefirst place, so we had better startconverting raw meaningless data intomeaningful and actionable informa-tion so we can get out of this messsooner rather than later, said BorisEvelson, principal analyst of BI for

Cambridge, Mass.-based ForresterResearch.

UNDERSTANDING

MANUFACTURING AND BI

When it comes to manufacturers,though, there are really two kinds ofintelligencemanufacturing intelli-gence (a.k.a. enterprise manufactur-ing intelligence) and business intelli-gence for manufacturers.

Business intelligence and manu-facturing intelligence are related inthe sense that BI is all-encompassing,covering everything from weatherforecasts to consumer behavior, saidDan Miklovic, vice president of manu-

facturing industries advisory servicesat Stamford, Conn.-based Gartner Inc.Manufacturing intelligence focusesin on the manufacturing value chainfrom ideation through after-deliveryservice, even to retirement and recy-cling in some cases, but with a realsweet spot of manufacturing itself.


aHOW TO GET

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aCAN BI IMPROVE

EFFICIENCY?

aBI IN MANU-

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aGETTING

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BI SOFTWARE

SYSTEMS

aSEVEN KEY

QUESTIONS FOR

MANUFACTURING

BI TOOLS

EVALUATIONS

C H A P T E R 1

Can BI softwarehelp manufacturersimprove efficiency?


4/20

More specifically, manufacturingintelligence (MI) tends to be moreabout analyzing whats happening on

the production floor in real time ornear real time.What is happening on the convey-

or belt? How does it compare to yes-terday? Are there errors? Are thingsgetting stuck somewhere? Is every-thing flowing according to plan?Evelson illustrated, noting that thiskind of operational intelligence isdesigned to eke out efficiencies in the

manufacturing process. If youre talk-ing about measuring and trackingmachine state performance, odds areyoure looking at manufacturing intel-ligence.

FROM SHOP FLOOR TO TOP FLOOR?

If you want to look at the higher levelof product and process performance,understanding how certain materialswork at certain times or understand-ing how a process will affect the sup-ply chain, thats the crux, said SimonJacobson, a research director forBoston-based AMR Research. Thepoint you begin integrating the datawith the supply chain, it becomes abroader architecture where you start

to involve multiple data sources andmulti-site performance to track howwell manufacturing is or isnt per-forming.

The idea, of course, is to connectMI types of data with traditionalenterprise dataafter all, companiesthat manufacture have something to

sell, and how can executives make thebest decisions with data that showsonly a portion of whats going on?

More importantly, what if were talk-ing about companies with multiplemanufacturing plants?

The competitive advantage thatwere seeing manufacturers try toachieve is to holistically manage theirmanufacturing operations across theglobal networkthe large manufac-turers that have 90 to 100 plants,

said Matthew Littlefield, a seniorresearch analyst for Boston-basedAberdeen Group.

If they are able to evaluate andmanage those plants with a commonset of metrics for each plant, thatsreally viewed as a competitive advan-tage for those manufacturers. One of


aHOW TO GET

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aCAN BI IMPROVE

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aBI IN MANU-

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BI SOFTWARE

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aSEVEN KEY

QUESTIONS FOR

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BI TOOLS

EVALUATIONS

The crux ofa higher levelof product

performance isunderstandinghow a processwill affect thesupply chain.SIMON JACOBSON

Research director,AMR Research


5/20

the traditional problems is the siloapproach, where each of their facili-ties has [its] own set of metrics, [its]

own set of processes, and managesthose processes in [its] own way,Littlefield explained.

If you have a solution that can nor-malize across those manufacturingfacilities that are generally distributedglobally, thats viewed as a competi-tive advantage that can be achievedby these systems, he added.

For BI implementations, a manufac-

turer needs to have at least three tofive good-sized facilities before it willsee much return on investment inmanufacturing BI initiatives, he said,though any manufacturer can benefitfrom highly focused MI solutions thatcan be implemented at lower pricepoints.

Still, is there room for intelligence inwell-running plants?

More advanced companies arenow taking a next look and are saying,We have our production line in con-trol, we know whats happening there,we have the system alerting us. Sonow, what can we do with that data?How can we use the data and use theinformation to compete and conquerour competitors? Evelson explained.

And teasing out competitive ad-vantage is key in todays small, com-moditized world. Whether a companyis producing a commodity or not, arethere some key advantages manufac-turers can uncover by using BIstrategies?

At the higher BI level, it ranges

from better demand forecastingby[better] identifying customer needs,for exampleto improved sourcing

through a better understanding ofsupplier performance, GartnersMiklovic said, noting that common

use cases for BI in manufacturinginclude R&D productivity/innovationand warranty/quality areas.

In addition, if management has aclear understanding of how difficultor risky it is to produce a given prod-

uct, they might not sign contractsthat appear profitable on the surfacebut really arent the smartest moves.For example, if a high-volume, big-contract sale requires changes in sup-ply chain orders and plant floor labor,the profitability of that big-ticketorder may plummet. In this scenario,


aHOW TO GET

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aCAN BI IMPROVE

EFFICIENCY?

aBI IN MANU-

FACTURING

aGETTING

STARTED WITH

MANUFACTURING

BI SOFTWARE

SYSTEMS

aSEVEN KEY

QUESTIONS FOR

MANUFACTURING

BI TOOLS

EVALUATIONS

For BI implemen-tations, a manufac-turer needs to have

at least three to fivegood-sized facilitiesbefore it will seemuch return oninvestment inmanufacturing BI

initiatives.


6/20

it may be more profitable to take on alower-volume, lower-ticket order thatironically carries a much higher profit

marginbut you need data and toolsto help you measure the pros and cons.

DOES BI FOR MANUFACTURING

OFFER EVEN MORE OPPORTUNITY?

All manufacturers, no matter whatproducts come off their assemblylines, share common areas of oppor-tunity. A good place to start is under-

standing customer needs and buyingbehavior to reduce costly inventory.Can you change operations in a plantor multiple plants so you can take oneven more business?

If you drive this level of informa-tion integration and availability thatshows the tradeoffs at the supplychain level with whats going on inmanufacturing, you can start shiftingcapacityor make better decisionsaround capacitybut you can alsoreally gain [insight] into multiple siteperformance, Jacobson said. Basical-ly, opportunities that are blurry whenlooking at a single plant can becomeclear when youre looking at several.

The million-dollar question: Can BItools magically uncover gold in hard

times?No, Littlefield said. Technology is

not the answer; its just a tool.

If a company tries to apply BI with-out a strategy, it could end up causingharm, and if the information revealed

by BI tools isnt acted on, its just a bigwaste of money.The key to success is getting the

strategy and philosophy right, thenapplying the right tools to get thedata to make the necessary deci-sions, Littlefield explained. Andfinally, you have to use the tools to

validate that the corrective actionstaken have yielded the results youdesiredand expected. I


aHOW TO GET

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aCAN BI IMPROVE

EFFICIENCY?

aBI IN MANU-

FACTURING

aGETTING

STARTED WITH

MANUFACTURING

BI SOFTWARE

SYSTEMS

aSEVEN KEY

QUESTIONS FOR

MANUFACTURING

BI TOOLS

EVALUATIONS

The key tosuccess is gettingthe strategy and

philosophy right,then applying theright tools to getthe data to makethe necessarydecisions.MATTHEW LITTLEFIELD

Senior research analyst, AberdeenGroup


7/20

BUSINESS INTELLIGENCE (BI) in manufac-turing environments is emerging as a

worthwhile investment for many savvycompanies. These firms are startingto realize that the gap between manu-facturing intelligence designed tokeep assembly lines running smooth-ly and their traditional BI systems ismore like a chasm.

How does what happens on theproduction floor affect sales? Prof-itability? Can small changes driven

through many manufacturing sitesdeliver large returns for the companyas a whole?

If companies with significant manu-facturing operations want to beamlight into the dark, they have to makea case for implementing BI thatscapable of creating meaning frommanufacturing activity.

MAKING THE CASE FOR BI IMPLE-

MENTATION IN MANUFACTURING

Building the BI business case beginswith a number of questions, includ-ing: Where do you start? How do youcalculate business intelligence ROI?

Who needs to be involved? Whodrives the BI projects?

Depending on the characteristicsof the company, whos driving itdetermines what it [the BI project]looks like, said Simon Jacobson, aresearch director for Boston-basedAMR Research. You can see anyonefrom VPs of the supply chain demand-ing this just for information integra-tion, or you can see this from a chieffinancial officer whos looking at how

to compensate plants, especiallythroughout manufacturing as a P&L,where the [goal] is to free up as muchworking capital as possibleyou haveto understand how these plants areperforming.

Alternatively, a vice president ofsupply chain might want to under-stand what performance capacity

looks like so he can better map whereto drive response based on globaldemand, Jacobson added.

1. Make sure you have a driver

for BI in manufacturing

As with any road trip, drivers have the


aHOW TO GET

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aCAN BI IMPROVE

EFFICIENCY?

aBI IN MANU-

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aGETTING

STARTED WITH

MANUFACTURING

BI SOFTWARE

SYSTEMS

aSEVEN KEY

QUESTIONS FOR

MANUFACTURING

BI TOOLS

EVALUATIONS

C H A P T E R 2

Making the case forBI in manufacturing


8/20

steering wheel, but that doesnt meanthey dont get navigational assistancefrom their passengers. IT may end up

taking over the wheel at various

points of the project, but organiza-tions need more than just executive-level buy-in. They need executive-level ownership.

Traditionally, a business guy says,I need this type of information, andan IT guy figures out how to collectand present it, said Boris Evelson,principal analyst of business intelli-gence for Cambridge, Mass.-basedForrester Research. IT would bearchitecting, building, delivering, andbuying BI solutionsthats the tradi-

tional approach.But that doesnt work, he said. A

business person has to step up andsay: Not only do I need information,but let me tell you exactly what kind,and let me be the owner of the initia-tive. Its my budget, my data, its myneck on the line before my CEO, so

Im going to own the products. Whenwe hear CEOs, COOs and CMOs talklike that . . . thats when we see suc-

cessful implementations.Clearly the person whos driving theinitiative has the power to determinethe direction and course of action. Butorganizations should make sure theydont have a driver whos solicitingdifferent destinations from everyoneand ends up pulling over in a state ofconfusion.

2. Find your pain points

that BI could solve

A company needs to know its painpoints and address them quickly dur-ing the implementation.

But, at the same time, even if com-panies fix their existing pain points,they may be ignoring far greateropportunitiesand this knowledgecuts both ways.

Realize you are going to want to beable to do some analysis on yourentire global manufacturing net-workso for a large manufacturer, itsprobably a very large project, saidMatthew Littlefield, a senior researchanalyst for Boston-based AberdeenGroup.

And large projects carry expenseand risk.

It is risky in not having a clearlydefined goal and not understandingwhere youre going to derive yourvalue from, Littlefield explained,adding that trying to do too much is acommon mistake.


aHOW TO GET

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aCAN BI IMPROVE

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aBI IN MANU-

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STARTED WITH

MANUFACTURING

BI SOFTWARE

SYSTEMS

aSEVEN KEY

QUESTIONS FOR

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BI TOOLS

EVALUATIONS

Organizationsneed more thanjust executive-level buy-in.

They needexecutive-levelownership.


9/20

3. Clearly define your goals for BI

If an organization doesnt have easily

identifiable pain pointsor they dontseem to justify the cost of a manufac-turing-focused BI systemthat does-nt necessarily mean theres little togain. Smart organizations will want tosee whether theres information theycan deliver to decision-makers thatcan help them meet company goalsor align corporate priorities with busi-ness metrics.

THE CRITICAL IT ANGLE IN BI FOR

MANUFACTURING IMPLEMENTATIONS

Meanwhile, even with business-focused stakeholders and clear exec-utive support, IT remains critical inany manufacturing-focused intelli-gence rollout.

You need to have a mature ITdepartment within the manufactur-ers, so you need to have a relativelylarge size company to have that, Lit-tlefield said.

An underpowered or inexperiencedIT staff will have to be addressedright away. In addition, even in an ITdepartment packed with super brains,organizations need to be able to con-

nect three critical groups: IT experts,manufacturing experts and businessexperts.

Its tough to do, but we do see thatbest-in-class manufacturers are con-siderably more likely do that, andsteering committees and cross-func-tional continuous improvement

teams are two ways we see that com-ing together, Littlefield said.

A steering committee helps direct

the vendor selection process and ini-tial project implementation, and oncetheyre up and running, a cross-func-

tional continuous improvement teamwill ensure that the organization con-tinues delivering new business value.

UNDERSTANDING THE ROI

OF BI FOR MANUFACTURERS

Determining ROI can be the hardestpart of any large-scale business intel-ligence initiative. Even with painpoints and clear goals, business intel-ligence projects are notorious for slid-ing out of scope, breaking budgets,and passing deadlines. With large


aHOW TO GET

STARTED

aCAN BI IMPROVE

EFFICIENCY?

aBI IN MANU-

FACTURING

aGETTING

STARTED WITH

MANUFACTURING

BI SOFTWARE

SYSTEMS

aSEVEN KEY

QUESTIONS FOR

MANUFACTURING

BI TOOLS

EVALUATIONS

Even in an IT de-partment packedwith super brains,

organizations needto be able to con-nect three criticalgroups: IT experts,manufacturingexperts and

business experts.


10/20

projects that can take months, if notyears, a reasonable ROI calculationcan be difficult to determine.

Focused BI efforts can often showROI, but many of those cases also lineup with manufacturing intelligencesystems that are focused on a portionof a plants performancewith verylittle connection to the broader busi-ness. Figuring BI ROI is a difficult prop-osition, and often a bit of a gamble.

Can you prove ROI in two years?Nobody can prove that today, Evel-

son said. You [must], unfortunately,be a believer that this is the futureand you cant survive without it.

He weighs spending $100 million torevamp an organizations BI environ-ment against spending the sameamount of money to buy another fac-tor. Which will give you more ROI? Idont think anybody can come to youand answer this question.

However, savvy manufacturerstend to invest in constant improve-ment and optimization. That willinevitably lead to a tradeoff down the

road when companies that investedin more plants are facing competitionfrom companies that invested in mak-

ing themselves smarter.The key is creating short-term goals

with long-term investment. I


aHOW TO GET

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aBI IN MANU-

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EVALUATIONS

Can you proveROI in two years?Nobody can...You [must],unfortunately,

be a believer thatthis is the futureand you cant sur-vive without it.BORIS EVELSON

Principalanalyst, ForresterResearch


11/20

GETTING STARTED with business intelli-gence (BI) software systems can beparticularly challenging for manufac-turing companies. The problem facedby many organizations with multiplemanufacturing units starts close tohometheyve probably grown them-selves into something barely recog-nizable.

Say, for example, that my com-pany became large by acquiring 10different manufacturing companies,and they all have their own customerlist, their own product naming con-ventions, said Boris Evelson, princi-pal analyst of Business Intelligencefor Cambridge, Mass.-based ForresterResearch. How do I make sure I am

not stepping on my own toes? Howdo I know my factory is calling thesame product by the same nameas my factory in another country?

The answers lie in your businessintelligence dataand data prepara-tion, it turns out, is critical.

BUSINESS MUST OWN THE DATA

No intelligence tool can work withoutdata, and if the data isnt accurateand specific, the tools used will onlyspew more meaningless data. Sur-prisingly, the first step isnt building adata warehouse or creating special-ized databases. No, the real prepara-tion starts far sooner than many

expect.We always say the very first step

is to admit that what you do as a CEOor COOin addition to owning widg-ets and factoriesis that you owndata, Evelson said. When businessowners look at their data problems asa technology problem, they say, Mydata is all over the place. Its not syn-

chronized. What is my IT doingwrong? That, to me, typically is thefirst indication that a company isntgoing to be successful doing businessintelligence.

After ownership is defined andembraced, the steps become clearer.


aHOW TO GET

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aCAN BI IMPROVE

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aSEVEN KEY

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EVALUATIONS

C H A P T E R 3

Getting started withmanufacturing BIsoftware systems


12/20

1. Define your data

IT is there to help you, but you have

to come up with the definitions. Whatis a widget? What is a customer con-tact? Evelson said. Try getting twoor three people in a room to define aproduct or customer profitability met-ric... you have to understand howprofitable each customer is. Trackingrevenue from each customer is easy,but understanding how much yourespending on a customer is a very diffi-

cult task. You can calculate your costover raw materials, but electricity,real estate, work force... thats notattributable to a single customer.How do you allocate all of your costsacross your company? Youll get dif-ferent opinions.

A business has to have a very clearunderstanding of what they are goingto measure and how they are going tomeasure it, and then, and only then,can they hand it off to IT, Evelsonadded.

2. Aggregate your dataMany traditional BI software systemsstart with a dedicated data ware-house. But as tools get better at

accessing data from various sourcesystems, data warehouses arebecoming less necessary.

It doesnt matter what you call it,but you need some kind of integratedway to have all your data in one logi-cal placenot necessarily physicalbut it has to be brought together so

you can, for example, relate yourfinancial data to chart data, or relateNorth American data to European

data, Evelson said. You can builda virtual data warehouse.Companies can evaluate new

technologies designed for BI, he said,as opposed to older relational data-bases that may have been designeddecades ago and augmented overthe years.

There are some new technologiesthat came from the ground up specifi-

cally for data warehousingthingslike columnar databases or invertedindex databases, which are especiallyuseful for any company looking toanalyze structured and unstructureddata, Evelson said.

Clearly, companies will need tomap out their data architecture early.

3. Clean your data

Meanwhile, manufacturing-focusedcompanies need some sort of masterdata management plan to ensure thattheir BI data is accuratethey simplycant make decisions based on faultydata.

All this data aggregation, datasynchronization, and data cleansing

is a very tough exercisethats thebulk of the difficulty in BI environ-ments. Once you get the data in oneplace, and its clean, you can startusing it, Evelson said. That first partis huge, and thats what companiesare spending millions of dollarson.


aHOW TO GET

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aCAN BI IMPROVE

EFFICIENCY?

aBI IN MANU-

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aGETTING

STARTED WITH

MANUFACTURING

BI SOFTWARE

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aSEVEN KEY

QUESTIONS FOR

MANUFACTURING

BI TOOLS

EVALUATIONS


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PRINCIPLES FOR BI SUCCESS

FOR MANUFACTURERS

Of course, in any major undertaking,the rules are rarely hard and fast.

There are no strict, well-definedmethodologiesthe whole process ismuch more an art than a science,Evelson said. Its all about lessonslearned, not repeating someone elsesmistakes. You cant really buy astrategic Business Intelligence 101textbook.

Still, there are solid principles for

success. Here are some importantones:

Call in the consultants: While it maybe theoretically possible for an organ-ization to create its own manufactur-ing-focused business intelligence sys-tem, its going to be much moredifficult if it doesnt hire consultants.

One best practice, according toEvelson, is to work with consultantswho have done this before, who knowbest practices, who have alreadyaccumulated a long list of potentialpitfalls, so when they come to you,you pay them so you dont repeat thesame mistakes.

Dont try to boil the ocean: Manufac-

turers have to take small steps, andplan waypoints into their journey.

Pick a metric you can implement ina few weeks, Evelson said. Try toshow your key stakeholders some-thing tangible, because if they dontsee something tangible within a fewweeks, people lose interest, lose

focus, and business requirementschange. You cant have long-termstrategic planning without still deliv-

ering something tactical every fewweeks.From KPIs to real-time datause

only what you need: Manufacturingintelligence thats focused on the pro-duction line can be particularly usefulif the data is real-time or near real-time. But for strategic analysis anddecisions, data thats a few days oldmay be of little use. Real-time dash-

boards are impressive, but a companyhas to consider the metrics its meas-uringin some instances, it might notbe worth the cost of managing real-time data. Still, if the goal is to betterunderstand manufacturing perform-ance, the further you go away from aline or process, arguably the less valu-able your data becomes, notedSimon Jacobson, a research directorfor Boston-based AMR Research.

Build flexibility: One of the problemswith large BI rollouts, if you build yoursystem without flexibility, and it takesa year to roll out a cross-functionalsystem, then something is going tochange, said Matthew Littlefield,senior research analyst for Aberdeen

Group.

Buy some BI and data management

tools: Organizations shouldnt rein-vent the wheel, but rather buy sometools. They may be bolt-on productsfrom the enterprise manufacturingsystem or the ERP system, or a com-


aHOW TO GET

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aCAN BI IMPROVE

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aBI IN MANU-

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MANUFACTURING

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aSEVEN KEY

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14/20

bination of the two with some best-of-breed solutions thrown in. Theresno way around it, though: Selecting

applications from vendors is going totake a lot of time.Theres two major places weve

seen people using BIone is to ana-lyze and connect production data tocorporate performance, and the otheris to connect maintenance and down-time data and then to analyze thatdata, Littlefield said. So on an assetmaintenance side, if youre looking to

find trends and reliabilityreducedowntimevery often that downtimedata is stored in ERP or data ware-houses, and the analysis tools thatcome with the BI system can help youdo that.

It all depends on the metrics anorganization is using, and it will wantto make sure that the possible ven-dors have tools that have been usedin similar situations with similar typesof data.

WHERE TO START WITH BI

FOR MANUFACTURERSGETTING

YOUR HANDS DIRTY

The last three key lessons learned arestrategic rather than tactical, and

they ensure that a company navigatestoward the areas that will reveal thebest return on investment.

Look for variability: Many organiza-tions get stuck finding the best places

to start, but theres a simple rule ofthumb that always helps: Its a mat-ter of attacking the biggest point of

variability and getting visibility intothat, Jacobson said.

Find points of leverage: Where tostart will always depend on a combi-nation of factors that will vary bycompany, industry and geography.Market factors create opportunity,too.

When crude oil was $150-plus,

logistics and supply chain efficiencywere critical, but thats less so now,said Dan Miklovic, vice president ofManufacturing Industries AdvisoryServices with Stamford, Conn.-basedGartner Inc. In general, the bestadvice isafter a few pilots to vali-date you know how to use the tooland build some credibilitygo afterthe areas with the greatest leverage.If labor is a major contributor to cost,use business intelligence to improvelabor productivityi.e., increase vol-ume or lower cost or both. If energy isa major factor, go after that.

Change your philosophy: To use BItools and principles successfully indynamic, global manufacturing envi-

ronments, companies may need totweak their basic worldview.

Adopt a philosophy of continuousimprovement, Miklovic said. It reallyis making a cultural shift and not justimplementing a tool. I


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A LOT GOES into developing a businessintelligence (BI) software system formanufacturing organizationsdataaggregation, cleansing, and synchro-nization, plus defining metrics andcreating specific targets for analysis.At the heart of any system, however,are the software and hardware thatdo the heavy lifting. Choosing thewrong tool guarantees a costly mis-take.

For instance, theres manufacturingintelligence that focuses on real-timeor near-real-time data and isdesigned to ensure that manufactur-ing processes run as efficiently aspossible. Then theres more tradition-al business intelligence that focuses

on historical transactional data thatrests in various databases, which isthen cubed and analyzed. And thereare varied connections of everythingin between.

Certainly, the vendors in this spaceare trying to confuse ita lot of BIvendors are trying to go down to the

shop floor and deal with real-timedata, and its not necessarily their tra-ditional strength, said Matthew Lit-tlefield, senior research director withBoston-based Aberdeen Group. Con-versely, some manufacturing intelli-gence solution providers are lookingto provide tools to help manufactur-ers connect and analyze their datawith more business-focused systems.

There are, however, lots of tips forcutting through the hypehere areseveral questions buyers will want toanswer as they begin the BI toolsevaluation process:

1. Should you write an RFP for

manufacturing BI systems?The writing of an RFP isnt the onlyway to solicit bids and buy solutions,but the act of writing one forces anorganization to nail down what it real-ly needs. Thats a critical startingpoint.

Its still good common sense that


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C H A P T E R 4

Seven key questionsfor manufacturingBI tools evaluation


16/20

you really need to define your require-ments very welland nobody elsecan do that for you, said Boris Evel-

son, principal analyst of BI for Cam-bridge, Mass.-based ForresterResearch. You have to take the timeto write the requirements.

2. Can the BI vendor address IT and

manufacturing? Can the BI vendor

speak the languages of IT as well asmanufacturing operations?

If they have that ability to talk andwork collaboratively with both organi-zations, thats a start, Littlefield said.I would only work with a vendor whohad that ability to make those con-nections.

3. Does the BI vendor have

experience in manufacturing oryour particular industry vertical?

When it comes to BI tools evaluation

for manufacturing-related uses,

how important is industry-specific

functionality?

On a scale of 1 to 10, about a 7 or 8,said Dan Miklovic, vice president ofManufacturing Industries AdvisoryServices for Stamford, Conn.-based

Gartner Inc. It clearly will speed upyour implementation if the solutionhas templates using the terminologyspecific to your industry, and it isalways good to have access to indus-try-standard practice.

However, just because a vendorhas limited or minimal experience in

your industry, you should not rulethem out, Miklovic said. Proximityand fit with your overall architecture

are two other factors that shouldweigh heavily on your choice, headded.

4. Is your EMS or ERP vendor

the best option for BI?Clearly, fit with your architecture isessential, and if your ERP vendoroffers a solution, it should be on the

short list, but it should not be the defacto choice, Miklovic said. ERPvendors are generally broad andcross-industry and so have breadthon their side, but not always depth.

5. BI can be expensiveis off-

shoring a good option for manufac-

turing?Aside from the politics of off-shoring,the initial stages of BI rollouts mightnot be a good fit for companies con-sidering it.

Unlike traditional software devel-opment where you can write yourspecification and hand it over tosomebody that can be anywhere, takea couple of months and bring it back,

with business intelligence, you haveto be talking to a person face-to-face, Evelson said. Its very hard todefine requirements because thereare multiple definitions. You have tobe in the same room when businesspeople are discussing these things. Ifyou take notes and hand over a piece


aHOW TO GET

STARTED

aCAN BI IMPROVE

EFFICIENCY?

aBI IN MANU-

FACTURING

aGETTING

STARTED WITH

MANUFACTURING

BI SOFTWARE

SYSTEMS

aSEVEN KEY

QUESTIONS FOR

MANUFACTURING

BI TOOLS

EVALUATIONS


17/20

of paper, you just cant get the com-plete BI picture.

Off-shoring for certain parts of BI

doesnt workyou can off-shoremaintenance, support, help desk; butall the initial stages, like rapid proto-typingthese guys need to be sittingright in your office doing everythinginteractively, Evelson added.

6. What are the tradeoffs for manu-facturers between larger ERP ven-

dors and more focused BI vendors?It is always a challenge in that thelarger ERP firms generally write goodcode but are not intimate with theprocesses, Miklovic explained. Bou-tique vendors write great functionali-ty into their products, but their soft-ware skills may not be the best.

At the same time, an industry-focused vendor might fit nicely but lackflexibility, while an ERP-based systemmight require more customization.

7. Is a BI pilot program necessary?Odds are, companies are spending alot of money on BI for manufacturing,and a test drive isnt just a routinetradition.

The best approach is a robustpilot, Miklovic said. Make the pilotrich enough to validate the claims andbroad enough to encounter the mostlikely issues. Only upon successfulcompletion of the pilot [should you]commit to a rollout. I


aHOW TO GET

STARTED

aCAN BI IMPROVE

EFFICIENCY?

aBI IN MANU-

FACTURING

aGETTING

STARTED WITH

MANUFACTURING

BI SOFTWARE

SYSTEMS

aSEVEN KEY

QUESTIONS FOR

MANUFACTURING

BI TOOLS

EVALUATIONS

A B O U T T H E A U T H O R :

Chris Maxcer has spent more than a dozen years reporting on everything from enterprise tech-

nology to consumer gadgets. While tech brings him great joy, there's something to be said for

getting out in the wild and turning it all offor most of it. When he's plugged in, you can reach

him at [email protected].

The bestapproach is arobust pilot,DAN MIKLOVICVice president,Gartner Inc.
mailto:[email protected]:[email protected]


18/20

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Five Ways ERP Can Help You Implement Lean

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