Making Analytics Pay in Manufacturing: 10 Strategies for Getting More Value from Your Data

  • Modern Manufacturing

From metal fitting manufacturers who keep machinery calibrated manually to high tech manufacturers whose production systems use self-diagnosing analytics, every manufacturer is continually working to improve shop-floor performance using analytics.

The best manufacturers I’ve worked with continually build out their system of record of plant floor performance. Creating a system of record like this can save thousands of hours (and dollars) each year, based on the intelligence it can provide.

Extending shop floor analytics to determine how plant, manufacturing, financial and enterprise-wide performance can be improved is key to making analytics pay. From measuring production throughput and plant schedule planning to support for demand management and forecasting, linking shop floor improvement to financial results is possible today.

Galvanizing the shop floor to the top floor with analytics has the potential to unify diverse manufacturing lines and programs with a common strategic direction. Analytics becomes the fuel that moves entire companies to synchronize their efforts and quickly maneuver the learning curve of new product development and new production techniques.

Ten Strategies for Getting More Value From Your Data

The following strategies are being used successfully by manufacturers to get more value from their data using analytics:

1. Measure existing manufacturing systems and process performance to establish a baseline. Many manufacturers already have these baselines together and are using fairly common metrics or analytics to get them.

2. Select the top three manufacturing processes that have the greatest impact on customer interactions and devise metrics that measure their performance from the customer’s standpoint. This is the pivot point in getting away from the inside-out mindset that dominates many manufacturers’ use of analytics. Instead of just measuring overall equipment effectiveness (OEE), consider measuring perfect order performance and other customer-centric examples.

3. Use value stream mapping or another comparable technique. By using these to rework the three most critical customer-facing manufacturing processes, manufacturers often find areas where immediate cost and time gains can be made. These include moving from master production scheduling to same-day closed-loop scheduling, and relying on sales and operations to plan production together.

4. For each of the three processes, define customer-centric metrics of performance and include them in a dashboard. Create a dashboard of metrics for each process area that relies more on customer-centric measures of performance first. Measurements of product quality, on-time delivery, perfect order performance and (over time) customer upsell are the kinds of metrics that link production floor performance to financial results via the customer.

5. Take time to give people ownership of pilot programs and you’ll set them up to excel in their jobs as a result. The best pilot programs take on a life of their own because project leaders give those most affected by them a chance to shine. Redefining the three most customer-centric manufacturing processes or workflows, attaching metrics to them, and then attempting to make them a part of the company takes trust. You can build that trust by allowing the people most affected by the change a sense of ownership.

6. For each pilot program, create metrics of performance that illustrate and reward collaboration, both inside the company and across suppliers. One of the most valuable aspects of analytics is their inherent power to provide recognition and reward collaboration. Using forecasting performance as a measure of combined team performance helps, as perfect order metrics and on-time deliveries show tight integration across teams inside and outside the company.

7. Evaluate the performance of all three customer-driven manufacturing processes and choose which one to implement company-wide. Using analytics to benchmark the performance of each process, manufacturers learn more about how they can improve from the customer’s standpoint than ever before. Through analysis, the one customer-facing manufacturing process with the greatest potential gains often becomes clear.

8. Use the data from pilots to promote and get the company behind the use of analytics to drive greater performance. One of the best CEOs to do this is a retired U.S. Marines general who launched three pilot programs in an effort to better integrate his company’s CRM system into manufacturing. After the pilot programs were completed, he shared all information as well as how the dashboard changed the way he worked. There was record adoption of the new analytics after he showed how he’d been able to do his job better and encouraged everyone to do the same.

9. Engraining a customer performance-driven mindset begins with stable, accurate analytics that tie plant floor performance to financial results via the customer. It is impressive to see how much accountability and customer responsiveness can change a company. One manufacturer of electronic components went from relying purely on inventory, costs, and other internal measures of performance and nearly lost their customer base. Only when the analytics of customer performance where shown plant-wide — on bulletin boards, Intranet sites and other ways across the company — did performance improve. Teams started working together and everyone focused on making their collective performance better when it was so visible.

10. As your customers’ businesses change, analytics for measuring performance will also need to change and stay in step with them. Analytics need to shift over time and stay consistent with customers’ needs and requirements. Devising entirely new analytics measurements or metrics will help keep your manufacturing operations aligned with current and future needs of customers over time.

Bottom line: Extending analytics past the shop floor and up to the top floor galvanizes manufacturing systems, strategies and processes, creating an agile business at the same time.