The vital role of data and analytics in manufacturing

As a manufacturer, you are most likely used to dealing with tangible raw materials and creating solid objects with a physical impact on the world around you. But what about when the structures you build are not products, machinery and tools, and are instead comprised of data and ideas?

A business is a complex idea that requires executives to establish a network of important decisions, plans and strategies to keep production moving. These organisational frameworks are typically supported by instinct, experience and data. 

In order to ensure your business decisions benefit your company and drive future growth, you need to invest in analytics. This will give you the insight required to influence strategic choices and measure the potential of each decision.

Where are manufacturers falling short?

Despite the obvious need for data and analytics, many manufacturers are falling short in this area. Whether due to a lack of knowledge or shortages in skills and resources, executives in this industry are behind the curve in analytics adoption.

This is according to a recent survey from Pricewaterhouse Coopers (PwC). The Big Decisions report found that manufacturing business owners and executive officers are facing new challenges every day, with profitability likely to be impacted in many ways. The key challenges driving change in companies include constraints in raw material supply and the price falling for sensors, robots and 3​-D computer software. Labour shortages were also identified as a trend influencing the future of manufacturing across the globe.

Are your data analytics on point to help make strategic decisions and evaluate the possibilities and future impacts of these factors? According to PwC, few manufacturers believe the senior departments of their business are prepared to make the important decisions they need to over the next 12 months.

One-quarter of respondent said they consider their company fully prepared while 59 per cent indicated management is somewhat prepared. This means that 16 per cent believe their business is currently unprepared.

A similar study from IDC found that big data and analytic technologies are helping companies stay competitive in the global market. Manufacturers, however, may need a little bit of a push in Asia Pacific. These organisations remain cautious in the adoption and use of analytics tools, with two in five respondents still not aware of big data, according to IDC.

Only 37 per cent of manufacturers in Asia Pacific are using big data technologies to improve on production quality management, IDC found. Another 29 per cent use it to improve inventory management, yet 37 per cent believe they don't have the right people or skills to make the most of big data. Close to one in five executives (17 per cent) struggle with identifying the best data to use and 20 per cent are concerned with the cost of these technologies.

However, strategic decision making is on the radar of many executives, according to PwC, with 53 per cent of manufacturing executives expecting to make important decisions at least once per month this year. More than one-quarter (29 per cent) say their decisions will be based on a new opportunity they simply can't ignore and 52 per cent plan to revise their most important big decisions within 3-6 months to adjust for new information.

What drives manufacturing business decisions?

For one-third of manufacturing executives (34 per cent), business decisions rely on their own experience and intuition. More than one-quarter (26 per cent) made plans based on the experience and advice of others, while just 41 per cent used data and analytics.

But with analytics so crucial for future growth, what is stopping more executives from taking advantage of data?

PwC revealed that 26 per cent of decision makers believe their biggest barrier to analytics is a lack of skills and knowledge. A further 33 per cent think learning about data would not directly benefit their role, so there is not much point getting involved. 

At the same time, 30 per cent believe it is difficult to assess which data is truly useful, so they cannot make the most of this trend. There is so much information to shift through, it seems that many businesses are overwhelmed with data and unable to correctly identify the information that would best support their decision making. 

Where is change needed and where is starting?

Big decisions require big investments in analytics. Upskilling to better understand and use data is crucial for any business, including those who typically deal in raw materials and tangible products. 

Already, 57 per cent of manufacturing executives are making changes to their analytics and decision making strategies, A further 27 per cent claim to have not yet made changes but are planning to in the near future.

So, what are manufacturing decision makers changing? In the last two years, the most popular strategies relied on enhanced data analytics such as simulation, optimisation or predictive analytics.

Many companies have or are planning to train executives on analysis techniques and how to accurately and effectively interpret data. Other businesses are adopting analytics by employing a dedicated data insights team to inform strategic decisions.

By embracing this trend and adopting analytics strategies in your company, it should become easier to make business decisions that support the future of your organisation. The important thing is getting started sooner rather than later.

Designing or manufacturing in Asia Pacific? Contact us at SOLIDWORKS to see how we can help inspire engineering innovation and improve every aspect of your product development.