Manufacturers Find Business Intelligence Elusive

Oct. 11, 2006
Real-time data is the key to greater operations visibility.

In the early days of computing, business intelligence was simply referred to as "management information systems," or MIS for short. But MIS was slow. Somebody had to dig through all the data, cull out the important stuff, put it into a meaningful format, and churn out a report. By the time it landed on managers' desks, chances are the business had already changed -- for better or worse.

Today, as manufacturers seek real-time business information and enterprise resource planning (ERP) systems start to push downward into the plant, the need for better production reporting, quality and logistics data is expanding. "With more and faster changeovers in production to support the shift from make-to-stock to make-to-demand, there is a greater need for real-time data," says Colin Masson, research director for manufacturing at AMR Research in Boston. "There is a need to put all real-time operational data, such as asset availability and capability, work in progress, and inventory movements, into a business context."

One industry sector that was quick to pick up on the benefits of business intelligence is logistics. Many large retailers and manufacturers can check the status of their shipments of goods from China and other Far East countries via online portals managed by shipping information firm GT Nexus of Alameda, Calif.

Logistics providers such as UPS continue to improve on their freight-tracking capabilities. In September, Atlanta-based UPS launched a new supply chain management tool called Flex Global View. Shippers of goods that use UPS can access the tool directly via a new freight-tracking page at Using Flex Global View, shippers can send proactive delivery and exception notifications for freight shipments as well as obtain detailed status reports on the customs clearance process.

"Visibility into the movement of goods is vital to our customers' success," says Dave Barnes, senior vice president and CIO at Atlanta-based UPS. "Our technology integration efforts are focused on enabling our customers to know with a simple mouse click if their shipment left Europe on a plane or on a ship crossing the Pacific and when it was delivered by truck in Tianjin."

Ultimately, the goal of manufacturers is to be able to combine real-time information on the supply chain, operations and business information such as cost data to enable better decision-making. "When you ask what a global manufacturing company really wants in terms of business information, they don't want silos of business intelligence data," Masson says.

Masson believes manufacturers need a broader operations intelligence platform that embraces more than just production data, but also supply chain and logistics information. "We want to expand the view of real-time data to support operations, not just offer a myopic view of core production information," he says. Unfortunately, the traditional business intelligence view "is looking in the rearview mirror at what happened yesterday," Masson adds.

He says manufacturers need real-time business intelligence on not only whether a product is "available to promise," but also whether it is "profitable to promise." For instance, a salesperson's ability to have cost data at his fingertips can mean the difference between taking an order at a loss or deciding to pre-empt a less profitable one in favor of a higher-margin order.

But most production control systems have no costing data, Masson points out. "There is still a lot of work to be done to bring the operations intelligence market into the same level of maturity as the overall business intelligence market," he observes.

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