Business Intelligence in Manufacturing Industry

by May 11, 2018

The manufacturing industry has always been one of the most challenging and demanding industry. With multiple complex and convoluted operational networks, management of operation often becomes a herculean task. Big data and data analysis has moved the world towards a more data-driven approach. Technology has bridged the gap involving locational advantages. It becomes imperative now to transform towards a more data-driven approach and usher in a new era of manufacturing intelligence.


Why Is There A Compelling Need for BI in Manufacturing?

The manufacturing industry has undergone significant changes in the past several decades. With globalization, global competitors are increasing, as competitive advantages arising out of geography alone are dissipating rapidly. Traditional orthodox management systems are giving way to a more data-oriented structure.

Manufacturing costs are increasing rapidly coupled with declining profit margins. Increased regulations from governments are also making the path harder to traverse. In this backdrop, the demand for simple, data-driven insights is greater than ever.

Moreover, manufacturing is one of the most data-intensive industries.  From reaching out to customers to delivering products, by nature, manufacturing is an extensively data-intensive industry. However, most of these data often lie idle with the companies. So, Business Intelligence (BI) can offer massive potential by utilizing these data in a fruitful way. BI can transform and simplify many core activities in the manufacturing firms. BI can improve activities in almost all spheres of businesses by optimizing scarce resources.

Some of the ways in which BI strategy can improve operations in the manufacturing sector are as follows.


Informed Decision-Making

With the huge influx of data from multiple sources, there arises a need for proper management, storage, and utilization of all these data. BI can help in management and utilization of data from multiple sources. BI tools can access large, cumbersome database and transform it into an easily comprehensible structure. With the help of visualization tools, the analysis can be presented in a simplified manner along with key business matrices and KPIs to business executives. This helps the decision-makers to take a more informed and concise decision. Information from all sources can be sophistically incorporated in the decision making. It can also test ‘what if’ scenarios to project and analyze alternate strategies. This, in turn, increases the risk-taking capability of a business.


Increases Operational Efficiency

BI accelerates the pace of operational efficiency by making huge volumes of data readily accessible and understandable. It can help in analyzing team performances and suggesting remedial measures for proper allocation of scarce resources. Product modeling through analytics helps to reduce and correct errors during product development. By incorporating viable financial models, BI can evaluate capacity and material requirement periodically. Almost every complex process from production to shipping can be simplified by using BI. From constantly changing market demands to sales strategy, forecasting and supply chain management, BI can take care of all. It also helps to bring more transparency to the network.


Financial Management

BI tools can be used for profit and loss analysis, sales analysis, raw material analysis, and thus help in optimizing resources and increase ROI. Both external profit building and internal cost reductions are necessary to improve the profit margin. BI can help in this case by identifying new unexplored channels of revenue and minimizing internal costs. It allows to do an in-depth cost-benefit analysis that helps companies to manage production costs through multiple information layers. It also helps to streamline operational procedures by managing and monitoring processes. With demand-supply analysis, BI can control value chain more efficiently.


Supply Chain and Logistics Management

BI can help in managing the supply chain logistics by evaluating its performance on a daily basis and analyzing data to ensure timely deliveries and quality service. It can monitor freight costs by identifying changes in supply and demand. It can also help to optimize the value of suppliers by giving feedback on their services. Thus, BI can help to evaluate shipment performances and accordingly negotiate contracts.


Inventory Control

Inventory control and management is one of the most crucial operations of a manufacturing firm. It is one of the biggest assets of any firm and can regulate the performance of the firms accordingly. It can also help in tracking and reducing inventory costs across location and time. Testing and simulating new manufacturing products also becomes easier. This helps in reduced process flaws by pin-pointing defects. It can also analyze turnover rates and margins based on products, departments and sellers.



Manufacturing is increasingly incorporating BI in all of its operations. The integration of BI with manufacturing operations are opening up new avenues of growth for the industry. With the increased adoption of BI in manufacturing industries, a new revolutionary age of manufacturing intelligence is about to commence. This manufacturing intelligence holds the potential to drastically transform how the existing manufacturing industry operates.