How to Analyse Performance and Unlock Data-Driven Manufacturing

October 21, 2022


Businesses in every industry and sector are waking up to the value of data. Indeed, McKinsey Global Institute found that data-driven organisations are 19 times as likely to be profitable. While large enterprises are ahead of the curve, it’s critical for SMEs too. So far, as part of our Streamline, Connect, Analyse, Level-Up and Extend (SCALE) series, we have highlighted the need to Streamline processes and Connect your factory. However, these are with the advent of bringing more information into your business that you can use to drive further improvements. And, while data alone won’t yield profits, it is a critical step to creating a smart factory. So, in this article, we explore how to analyse performance and unlock data-driven manufacturing to increase performance and profitability. 

analyse performance for data-driven manufacturing

Why analysis is the key to unlocking your smart factory

We need to make quick decisions to affect the outcome of our businesses every day. Often, these situations are complex and you need to make decisions using facts and information, not guesses and gut feel, to achieve the best outcome. Therefore, having effective analytics is critical to helping you make those right decisions. Our previous article explored how to capture data from your people, plant, processes, products, and partners. With the Analyse stage of our SCALE journey, we help you use that data to make better decisions to reduce costs, increase OEE and improve supply chain distribution. Essentially, the Analyse stage turns your meaningless raw data into valuable intelligence to help you improve.

The below image demonstrates the value of data at different stages of how you can use it:

  1. Raw Data: This is the data collected but with no use. Businesses don’t use 68% of all data available to them, according to Seagate Technology. This 68% is this raw data.
  2. Sorted: Systems such as ERP / MRP systems sort data and process it to allow you to use it. 
  3. Arranged: You arrange data by identifying commonalities between different data feeds. For example, arranging data allows you to sort it into silos between various departments or segments.  
  4. Presented Visually: Dashboards bring lots of information together and simplify how you review data individually and collectively.
  5. Explained with a story: The real power of data is in explaining it with a story. By fully contextualising data within the goals of your business, you can unite your team behind a mutual objective. And, when the data is accurate and considered, people are often much more responsive to feedback to help them improve.
Data-driven manufacturing. Raw data, sorted, arranged, presented visually, explained with a story

Benefits of data-driven manufacturing

As you can see, having data or dashboards is only part of the process. Indeed, analysing performance enables data-driven manufacturing which is a culture of a data-first approach to solving problems through continuous improvement. Other businesses have achieved the following significant benefits from this approach:

1.     Reduce downtime

Data-driven manufacturing ensures you are capturing vital information from your plant that you can use for Predictive Maintenance. By setting tolerances on data feeds from machines, you can receive alerts when machines require service or recalibration, so you can inspect them before they break. Additionally, automatically scheduling maintenance at regular intervals ensures that checks are not deprioritised for more urgent work. As a result, you may have a few extra machine inspections, but you significantly reduce the chance it breaks down completely.

2.     Accurate business visibility and decision making

Data is embedded everywhere throughout your factory – but adopting data-driven techniques ensures you can access and use the data you need. With the correct information, you can check your business performance at a glance and take action to resolve any issues. You will no longer have to wait until the end of the month to view performance reports as information will reach the right people at the right time.

3.     Increase OEE

You may think that you’re currently operating at high capacity. But, interestingly, once you can accurately measure your OEE, many companies find they are only at 30-40%. Once you and the team are aware of this, you can investigate the inefficiencies, find the root cause of issues, and exploit opportunities to improve.

4.     Increase productivity

As you can analyse real-time data, you can act upon it efficiently to make critical decisions to drive productivity. By getting the right data to the right people at the right time, you can begin to make the right decisions. From identifying bottlenecks in production to analysing your engineer’s non-productive time, you can identify new ways to work more efficiently and do more with less.

5.     Increase profitability

One of the key benefits of a data-driven approach is the increase in profitability. For example, a McKinsey Global Institute study of analytics in manufacturing found companies that increased earnings by as much as 55%. Additionally, more comprehensive studies identified that data-driven organisations are 23 times more likely to acquire customers, 6 times as likely to retain customers and 19 times as likely to be profitable. While this isn’t a promise, it is significant.

6.     Positive culture of continuous improvement

Finally, data-driven manufacturing can create a positive atmosphere amongst the team. Many fear that adopting digital will replace jobs. However, it actually removes the tedious admin work from our current tasks, allowing people to focus on more productive tasks. Additionally, a data-driven culture removes the challenges of continuous improvement. By reviewing accurate data with the team, you can spend less time discussing what went wrong and spend more time fixing it. This culture is incredibly powerful in your business if everyone takes this approach.

7.     Automating operations through AI

Artificial Intelligence is the elephant in the room when discussing data-driven manufacturing. However, AI can be highly effective in enabling lights-out automation and ensuring that your factory runs at maximum capacity. Appropriate machine learning algorithms can learn which actions to take (or delegate) to create the optimal outcome when presented with information. AI systems make these decisions based on various sources, but ultimately, the more information you can feed into machine learning platforms, the more valuable they can be to your business.

8. Mitigate supply chain risks

Finally, you can take a data-driven approach to supply chain management as well. By analysing quality, cost and delivery performance, you can identify any weak links in your supply chain and collaborate with them to improve performance. Additionally, with real-time information feeding into your system, you no longer have to call suppliers for updates. As products move through their productions line, you can gain visibility on work-order status. This allows you to take action to mitigate the risk of delays as they occur. You could help your supplier process the job more efficiently, alter your own production schedules in anticipation of late delivery, or let your customer know of a potential delay.

How to implement data-driven manufacturing

So, how can you begin to implement data-driven manufacturing in your business? If you have followed our Fitfactory SCALE model, you can see the importance of having accurate data from your people, plant, process, products and partners. So, the first step is to capture that information.

However, you can begin this approach without having everything. You should view any digital transformation project as a continuous improvement process, where your strategies and systems are developing and adapting to changes.

So, don’t wait to have all of the information together before analysing performance. Instead, begin with what you have available – be it accounting software, MRP systems or Quality management software – and make decisions based on this. This approach will help generate quick wins, demonstrate the value of data-driven decision making, and embed the desired culture.

One key thing to have in mind, even when starting small, is scalability. For example, will your business intelligence system be able to collate all your information? Or will you need to replace it to bring disparate data sources together later?

SCALE with Fitfactory

At Fitfactory, we provide technology to help you capture information from the 5Ps of your business, ensuring that you have accurate information to form the foundation of your smart factory. Additionally, our intuitive business intelligence platform, Insights, helps you get the right information to the right people at the right time. We set you up with best practice reports and dashboards based on your industry to ensure you’re monitoring relevant KPIs. And, you can set up tolerances and alerts so that relevant people can react to issues as they occur in real-time.

Finally, our Streamline, Connect, Analyse, Level-Up, and Extend (SCALE) model supports your digital transformation regardless of whether you are a digital novice or a digital champion. We focus on your business goals and identify technology to help you thrive.

Get in touch if you would like to discuss your upcoming digital transformation project.

Learn more about SCALE

You can learn more about SCALE by subscribing to our blog. We provide weekly updates to support your digital transformation journey, including interviews with our in-house experts, highlights of funding opportunities, and blogs like this one. Last week, we introduced Connect, and next week we will look ahead to Level-up and Extend.

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