A Roundtable Recap: Making Data-driven Decisions in the Manufacturing Industry

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Decision making concept, hands with light bulbsI recently gathered with local leading manufacturing and distribution experts as part of our ongoing manufacturing roundtable series to discuss relevant topics, challenges and best practices in the industry. During this time, I had the opportunity to engage in discussion on making smarter, data-driven decisions. Debbie Altham, Sikich’s manufacturing technology expert, led the conversation. What I heard was valuable advice for distributors and manufacturers.

Manufacturing leaders and business owners are constantly tracking data. From material costing, product yields and cycle times to employee hours, productivity and pay, numbers can easily blur and become a catalyst for costly mistakes. Close that Excel spreadsheet and start tracking key data and customer information the easy, effective way—read on to learn how to make data-driven decisions in your business.

How to Address the Lack of Confidence You Have in Data

Manufacturing processes have multiple variables, making it challenging to collect and track accurate data. Beyond human error, a number of issues present themselves (think: too many people managing one set of data, system failures and missing inventory). At times, it can be difficult to see the return-on-investment in data collection since it’s not only labor intensive but can be expensive and overwhelming. It’s no wonder manufacturers lack confidence in their data and systems.

Cue the many benefits of transitioning to ERP systems. To see if an ERP system is a good fit for an organization, manufacturing business owners are advised to take the time to define their business objectives, key business processes and future plans to identify areas where processes can be streamlined. From there, they can talk with ERP and CRM experts to find the right system to start tracking and housing their information. Storing valuable data in a smart ERP system—that’s also easy to navigate—reduces the risk of keeping and spreading incorrect information while also simplifying the process.

Errors in reporting often lead to poor decision-making. Utilize technology to combat this and regain confidence in data.

Are You Being as Effective as You Can with your Digital Transformation Strategy?

More accurate and timely decision-making is driven by efficiencies. Digital transformation provides the opportunity to help businesses build and maintain those efficiencies and contribute to growth through the usage of automated processes. Utilizing automation and data technology can assist in improving the quality of a process, system or product and deliver accurate and timely metrics. Look to technology to aid in market forecasting, inventory tracking and customer research (learn who the customers are and what they are buying).

Technology plays a crucial part in the evolution of a company. Unfortunately, automation is often feared by those who have yet to use it. Business owners are advised to work with this technology, as it has the potential to propel manufacturers to greater levels of productivity—including artificial intelligence that operates back-office, mundane tasks on its own. (I also spoke with industry leaders a couple months back about the future state of manufacturing. Automation was a huge part of this. Take a look at this insight to learn more.)

Bridging the Gap Between Experience and Impulse

Within any industry, there exists generational gaps. How a business owner bridges the generational gap coincides with how the employer introduces new technology. Among the manufacturing leaders I spoke with, the majority agreed that older generations of laborers are more likely to have hesitations in making data-driven decisions or using technological systems for tracking and inventory purposes. Younger generations, on the other hand, are quick to make decisions based solely on data. The speculation here is that younger workers are more impulsive, which derives from a lack of experience. So how can manufacturing companies get the best of both worlds?

Proper training is crucial—from the start, processes need to be put into place, mistakes need to be addressed and clear expectations should be established. For this to work, managers will require additional training so they can lead their teams. Employers should also strive to grow and foster a culture where employees are open to learn and understand any introduced processes or new technologies. Lastly, business owners are encouraged to modify their training processes to meet the learning styles of their diverse employees.

Put Your Digital Transformation strategy to practice

The leaders I spoke with provided an insightful point of view when it comes to data-driven decision-making in the manufacturing and distribution industry. Apply these practices in your own company and focus on conquering the lack of confidence in data, driving efficiencies and bridging generational gaps in technology.

An in-person M&D roundtable may be coming to your market. To learn more and to become a part of these manufacturing focused conversations, please see our events page.

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This publication contains general information only and Sikich is not, by means of this publication, rendering accounting, business, financial, investment, legal, tax, or any other professional advice or services. This publication is not a substitute for such professional advice or services, nor should you use it as a basis for any decision, action or omission that may affect you or your business. Before making any decision, taking any action or omitting an action that may affect you or your business, you should consult a qualified professional advisor. You acknowledge that Sikich shall not be responsible for any loss sustained by you or any person who relies on this publication.

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