By David Turbide, CFPIM, CMfgE, CIRM
Many aspects of a manufacturer’s business start with data: transactions, sensor output, numbers and status reports. However, data in and of itself is not of much use; only when data is put into context – combined, related, and analyzed – does it become information. Information can help control a process, inform managers, supervisors and workers about what has happened and its impact and support the decision-making that keeps the plant producing and the product flowing.
But when does information become intelligence? According to Olivia Rud, “Business intelligence (BI) is the ability of an organization to collect, maintain, and organize knowledge. This produces large amounts of information that can help develop new opportunities. Identifying these opportunities, and implementing an effective strategy, can provide a competitive market advantage and long-term stability.”
The key idea is in the last sentence: business intelligence helps develop strategy and build a competitive advantage.
Business intelligence systems are readily available today; many can be licensed as part of an ERP system. BI provides graphical displays (data visualization) of many parts of the business with the ability to “drill down” to successive levels of detail. Ideally, the BI dashboard is configured to monitor key performance indicators (KPIs) that tie directly to the company’s strategic objectives and go-to-market strategies.
This is all information and is very useful for managing the business. What turns it into intelligence is the interpretation of the information and using the insight gained to make strategic moves and decisions. No system or software application can do that on its own, butwhat it can do is bring information together and format it in such a way that the users can extract the intelligence out of it.
BI systems also support the intelligence creation process with simulation capabilities. By testing various what-if scenarios, executives can test alternate theories and approaches and get some indication of what the result might be.
Executive dashboards and BI systems are increasingly important tools that allow executives to draw intelligence from the huge amounts of data and information that are pouring into every company in increasing volume, velocity and variety. The old adage that “knowledge is power” is proving itself more clearly every day as business intelligence helps companies stay ahead of the competition.
Dave is a consultant, writer, educator and subject matter expert with first-hand knowledge of manufacturing management practices, supply chain functions and enterprise systems. He is certified by APICS as a Supply Chain Professional, at the fellow level in Production and Inventory Management and in Integrated Resource Management. He authored six books, published hundreds of articles and is currently President of the APICS Granite State Chapter. www.daveturbide.com