As a manufacturer, do you know where you make money?
The importance of ROI is well known. Certainly it forms a significant part of the investment appraisal when reviewing new software. But do you ever consider the ongoing improvements that aren’t quantifiable? Have you ever pondered where else you might make more money?
It’s likely your business has tried to tackle this issue in the past, but have you known how to extract this data and more importantly, where to look for it? We often hear manufacturers say, “We know we make money, but we don't know exactly where!”.
How software can help you decipher data
Common reasons manufacturers are not making more money
A surprising number of companies only look at departmental costing (and sometimes not even at this level), not job costing. This is easy to tolerate when business is all consuming and as each day speeds past. It’s easier to concentrate on one area of growth or on production and feel progress is being made than it is to dig into the data and find out which customers make you money and which lose you money. This is compounded when looking at the less exciting parts of your business where you could be losing significant amounts of money without knowing. For example, have you ever considered that you might be doing things in complex ways that take much longer than they should? Inefficiencies such as document storage and uploading old records etc. can cost far more than you might imagine. These inefficiencies can creep up on us unannounced. They become part of the everyday normality and no one questions this. Often it takes an outsider to ask the obvious.
You may well have production planning on a factory floor sorted.
Production control and scheduling might be running smoothly but have you ever wondered just how much your backroom operations might cost down to the last staple? Are there ways to cut waste and minimise costs? Would you know where to begin? You might be thinking there are more important things to do but how much might you save if you questioned the visibility and dynamism of your back room operations? Do you have a system for managing this that’s easy to use, easy to navigate and makes visibility much easier?
Is data the same as analytics?
Often, the terms data and analytics are used interchangeably, but they are not the same. Put simply, analytics is the meaningful use of data. Businesses often struggle with how to collect the relevant data, and how to extract key metrics they want from this.
Access Workspace surfaces the data for you, meaning you can glance at all of the information you need, such as machine efficiency to profit on a single component, to make informed business decisions.
Why are analytics important?
Estimates and assumptions are not enough when it comes to the goal of increasing productivity and profits. Many manufacturers don’t have access to real-time, accurate data from their current software. Therefore, detailed analytics of equipment, staff, capacity and inventory can’t be easily studied to see how your current production setup makes money and where it can be improved.
Capacity is a difficult metric to measure without the data to back it up. For example, it is easy to assume a machine is at capacity if it appears to be constantly operating. By diving into data and pulling out true efficiencies of people, machines and production times, you can gain useful information that you can make business decisions with.
Applying analytics to business
They are just tools, but data needs to be used intelligently and interpretation is key to unlocking the real narrative. Data miners and storytellers might well offer you a very different evaluation of your current position. They might also challenge assumptions regarding the way data might be interpreted and used. Have you ever considered how complex data capture can be transformed into stories that actually influence strategy and tactics? This can lead to better sales results, increased motivation and higher productivity. The issue here is you need the data in order to find the narrative and also watch your costs.
Most manufacturing and logistics software suites will capture more data than ever before. Certainly our ERP, MRP, WMS and Scheduling software hold vital data on operational efficiency and profitability. But we find the true value is found when surfacing that data in a focussed way and giving your team relevant, real-time data to make the right decisions. Systems such as ERP, MRP or, WMS need to be complex beasts to handle the high volumes of data generated in any busy site. But taking that data out of the system and presenting it to the user in real-time can be simple. This is why Access Workspace is such a standout platform. It sits over the operational software and pulls the data you need when you need it. And you can read that data on a browser wherever you are.
Gain control of business insights
Think of how having confidence in your plans will help you:
- order materials on a ‘just-in-time’ basis,
- avoid over-stocking
- improve cash flow
- make a considerable impact on your profitability
- accurately forecasting labour to reduce temporary staff spend.
- reduce sub-contracting need through increased efficiency of plans and associated productivity gains will make a profound difference
And above all, find out where you make money and where you don’t.
