Companies turn to business intelligence dashboards to get a better handle on their operations.
By Bridget McCrea
With technology changing the way we do business, it stands to reason that manufacturers would look to it as a way to better control their operational performance, profitability and progress. Some are looking to business intelligence dashboards as a way to do that. For much like a car’s dashboard provides valuable information used by drivers to make key decisions, business intelligence dashboards can help manufacturers stay on top of key performance indicators (KPIs) that help them work smarter, better and faster.
“When you’re driving, you look at your dashboard. According to the speedometer you are going too slow, so you press on the gas pedal to speed up. According to the fuel gauge you are almost empty, so you look for a gas station to fill up,” says Jeff Smith, chief process officer at Cary, N.C.-based business process management firm Ultimus. “The dashboard is a graphical representation of what your car is doing, and you react to these indicators.”
The concept translates into the business world, where companies are using software-based systems to collect information from disparate locations across an entire enterprise, and then display – via a dashboard-like interface – that information in graphical format that a manager can use to visually monitor business activity.
“With this information the manager can then make well-informed decisions on how to act, when to act and where to act,” says Smith. “In many cases, a business intelligence dashboard may be interactive and the manager can ‘act’ via the dashboard by modifying information that the business processes use.”
According to Smith, business intelligence dashboards have been around for many years, with most companies calling them “reports” before modern technology came along. Generated weekly or monthly, these reports were cumbersome to create and distribute (to a limited number of people), and responding to the information on them took time.
“Despite the challenges, these reports still provide visualization into how a business is performing,” says Smith. “Therefore, in a very real sense, every company has and uses dashboards.”
To bring their reporting techniques into the modern age, Smith says manufacturers across all sectors are turning to the growing pool of business intelligence dashboards. Using state-of-the-art methodologies, these tools allow companies to quickly tap analytical information that can be used for forecasting, changing business process rules, simulation and other important functions.
For many companies, business intelligence dashboards are more necessity than luxury, according to David Brochu, executive vice president at Chicago-based business intelligence software developer Acumence Inc. With the option of moving their operations offshore out of reach for the typical precaster, for example, Brochu says such companies must find other ways to gain efficiencies.
“The only way to do this – or to really decrease costs – is by improving your current operations using business intelligence systems that provide visual displays,” says Brochu, who defines the dashboards as management tools that are used to monitor, view and track performance in real time. “The organization can use that information to change behavior or processes in ways that will result in improved performance.”
Brochu says that right now, manufacturing companies are adopting dashboards. Those companies in continuous, high-volume operations where a mixed product is converted into discrete units through repetitive steps (such as packaging, filling and the manufacture of metal, ceramic, plastic, concrete or other products) are reaping significant rewards from their investments.
“These companies are using the dashboards in their manufacturing environment to increase plant efficiency and throughput,” says Brochu, “resulting in higher production rates, higher efficiencies, lower costs and, ultimately, higher profits.”
How they work
At its simplest, a business intelligence dashboard is a visual representation of current business information that goes beyond the real-time data to summarize and analyze results a manager can use to make quick decisions. The dashboard typically presents some form of KPIs or performance measures, compared to a goal or target value (or range), in a way that makes it easy to understand exactly how a company is doing relative to those objectives.
A precaster, for example, might use a key dashboard value targeting production for a shift, compared with current production and forecasted (or predicted) production. “If the predicted value drops below the target value for the shift, then a supervisor or manager knows it is time to step in and take action,” says Brochu, “and does not have to wait until the end of the shift to find out that they missed a target.”
Using the dashboard, Reid Carr, president at Internet outsourcing firm Red Door Interactive in San Diego, says executives and managers can quickly and easily examine those KPIs and pinpoint any issues that need addressing. Rather than wait for a “report” at the end of the week or month to let them know something is wrong, precasters can tackle problems immediately, thus creating major efficiencies in their operations.
“It’s really just about being able to access data that’s important, and that is available at a glance and on the spot,” says Carr.
Typically Web-based but also available as installed software, dashboards can show discrete information or multidimensional information. Therefore, a dashboard works when the data it needs is made available to the company and when that data has been organized in a useful way. The complexity of the information, how the data is stored, the value of the data and the different “views” of the data determine the amount of effort it may take to set up a dashboard.
A dashboard may be included in a client/server application, says Smith, with the user having the software installed directly on the company’s computers. Dashboards can also be “served up” via a Web server and therefore are accessible via a Web browser. Prices vary, depending on the number of users and the scope of the business intelligence involved. Installed software generally would require a one-time fee for the licensing and the installation, while the Web-based applications are typically sold on a subscription basis.
“It can cost a lot of money or no money at all to buy software, based on the fact that the precaster may already have the software (or have access to open-source solutions),” says Smith. “It could require an investment in new software, hardware and people to implement the solution, but in general, enterprise applications have maintenance and support costs that have annual costs ranging from 10 percent to 30 percent of the original licensing costs plus inflation.”
And remember, says Smith, that business information is worthless if the precaster doesn’t have the right people in place to make sure that the data is both good and accurate. “Depending upon the amount of work required, those ‘people’ could be a consultant who pops up every once in a while or an entire staff,” says Smith.
One of the first things every manufacturer should know about business intelligence dashboards is that they don’t work on their own, that they’re highly dependent on receiving accurate information and disseminating it to employees who can analyze it and use it to make good business decisions. Much like a car’s dashboard, these tech-based business tools are just that – tools that contain pertinent information.
“You can buy dashboard software and install it all over your organization, but if no one ever looks at it or uses it, you’ve wasted your money,” says Brochu. “By themselves, dashboards don’t do anything.” To avoid wasting money and time, Brochu advises precasters to ask themselves these questions before making the investment: What am I trying to accomplish with the dashboard? What are my goals or objectives? How can I incorporate those goals or objectives into my management philosophy, including the way that I compensate my employees?
“If you can entice employees to work and be compensated in a way that makes the dashboards useful to them (through incentives that coincide with positive results, such as upping production by 5 percent because of better controls made possible by the dashboard),” says Brochu, “then the combination of the employees using the dashboards and the information the dashboards present can result in some significant savings.”
Dashboards can also help create a more proactive precast organization, says Scott Stein, practice director, business intelligence, for Seattle-based Avanade, a joint venture between Microsoft and Accenture focused on system integration. Rather than running around putting out fires all the time, managers armed with the right information can focus on making proactive decisions that help create a more productive, profitable operation.
Take the precaster who isn’t receiving materials from a key vendor in a timely fashion. “With a dashboard, that manufacturer can fire up a computer in the morning and see that the vendor is six days behind on providing those materials,” says Stein. “Knowing that the materials are a major part of the manufacturing cycle, the precaster can then make a quick, proactive decision to go to another supplier before its own manufacturing process is even affected.”
To companies looking to integrate business intelligence dashboards into their operations, Stein says the first step is to define the firm’s KPIs, and then create a system around those measures. Skip those steps, says Stein, and you may end up making an investment of time and money in a system that doesn’t live up to expectations.
“Too many companies take for granted the types of meaningful measures and performance indicators, and wait until it’s too late to develop those criteria,” says Stein. “By taking the time to understand which KPIs are most important to your company first, you’ll avoid those challenges and wind up with a system that allows for greater visibility of exactly what’s going on in your organization.”