There is a silver lining to an economic slowdown. Manufacturers have an excellent opportunity to improve future earnings by redeploying some of their knowledge management staff to the task of getting data organized and integrated. Why data? Because despite more than 30 years of investments in a variety of systems such as ERP, Manufacturing Resource Planning, Manufacturing Execution, Quality and Test, Machine Maintenance Support (like service and call center) Data, and Customer Data, executives still don't believe they are getting the full value out of their investments.
Gartner Analyst Mark McDonald was quoted in a January 13th, 2009 InfoWorld article published in CIO saying IT was expected to work differently during this downturn. "They're working harder, not smarter," said McDonald. The IT budget is typically 4% of revenue, so cutting it won't help much, McDonald says. Instead CIOs are focusing their labor on a couple of projects that will get quick results.
"In a connected world, collaboration and sharing are key principals," says David Loshin, President of Knowledge Integrity Inc. and author of Master Data Management. "In particular, the faster our networks are and the better our connectivity is, the more your organization will benefit from information sharing and operational collaboration." Every CEO wants to fully utilize all the assets in the organization to the optimal maximum. How is it that operational and transactional data is one huge area of investment that few companies can say they are maximizing or even recognize the imperative of comprehensive data management? How can we expect IT departments, with shrinking resources to tackle such big projects in normal times let alone an economic downturn?"
What are You Waiting For?
Data on production, customers, employees, suppliers and much more resides in multiple systems that are rarely interconnected or willingly shared among groups within the organization. Given the scope of the average IT investment in a manufacturing environment, it seems logical to spend a little bit more to get these systems integrated and working optimally so results have a deeper impact and reach farther across the organization.
Well, that's a job for the IT department, right? Not necessarily. IT is good at IT -- getting solutions and hardware up and running and maintaining that system. But IT doesn't have product experts or supply chain gurus on staff. IT also doesn't deal with inefficiencies like 70 different names for the same part or productivity delays that arise when two plants making the same product can't share data because each has an independent, customized ERP system.
Worse yet, IT can be a stumbling block. If you discussed data integration and "breaking down silos" with an IT exec 10 years ago, you were discussing a multi-million dollar project and a major headache. Many IT staffers still have data integration horror stories fresh on their minds, and they aren't convinced of the value of solutions and services that make data integration simpler, faster and cheaper. Recent innovations don't require an organization to rip and replace anything, but it does require talent from outside the IT organization working with the IT organization to integrate data in a meaningful and holistic fashion.
Take the example of a major engine manufacturer that has gone through numerous data collection upgrades including bringing on a major SAP system. Because of solid data integration practices, the company never lost its legacy data; nor has it had a problem with conflicting versions of the truth floating around separate silos. By using integration tools, the company allows operational managers, manufacturing supervisors and supply chain managers to work from the same data -- analyzing it by product line or time period. The company estimates this integrated approach saved $3 million on one quality initiative in the first year of use. That's far more than the data integration system cost in the first place.
Six Sigma experts, the highly trained quality gurus at many organizations, are ideal candidates for tackling an enterprise data integration project. Six Sigma black belts are accustomed to hunting down data as part of their projects (some will tell you that the hunt takes up 80% of the time of any project), and they understand the value of integrated data. They know how to ask the right questions of the right people whether those people are the heads of business units, product specialists or IT experts. And Six Sigma experts have the project management expertise to work with IT to develop strategies and tactics to discover and integrate supplier, production and customer data.
With manufacturing slowing down and headcount frozen, executives need to think creatively about the valuable individuals they have at hand who can solve complex tasks and position the company for future dividends. Now is the time to pull together a Data Integration SWAT team headed up by a Master Black Belt and an IT manager to create a roadmap of how to get your organization where it needs to be so it's more nimble. When the economy turns around, we all know there will be no time for enterprise projects that don't immediately impact production.
It's hard to think of a recession as a positive time -- but with the right approach companies can use this time to get ahead of the competition.
Michael Newkirk is a Product Marketing Manager for SAS Institute in Cary, North Carolina. SAS is a leader in business intelligence applications with particular expertise in data quality and analytics. http://www.sas.com/Interested in information related to this topic? Subscribe to our Information Technology eNewsletter.