Why Manufacturers Should Put Big Data to Work
Nick Ostdick - August 22, 2017
While Big Data has certainly permeated nearly every aspect of today’s manufacturing and supply pipeline, some industry analysts still question the validity, value proposition, and staying power of Big Data for companies as they strive to streamline their operational platforms and leverage lean manufacturing principles for optimal productivity and profitability.
First introduced to the manufacturing and supply chain landscape in the early 1990’s as a method of grouping, sorting, and analyzing large and complex data sets into executable actions, Big Data gives manufacturing companies the capability to apply predictive analytics and other forward-looking logistic strategies to increase the efficacy, efficiency, and cost-effectiveness of planning and production programs.
Big Data has since found a home working in tandem with other supply and manufacturing movements such as Industry 4.0, Advanced Analytics, and The Internet of Things (IoT). Alongside these technological developments and platforms, Big Data has helped companies gain increased insight and visibility into a number of critical planning and production functions such as forecasting, modeling, data analysis, and the implementation of integrated sales and manufacturing principles for a more streamlined production cycle.
Yet, even so, some questions still remain as to the longevity of Big Data particularly in variant-rich industries where change and evolution happens in the blink of an eye. In order to address these concerns or the reasons why companies still question the value proposition of Big Data, we’ll examine why manufacturers should put Big Data to work and what competitive advantages companies can derive from incorporating Big Data into their supply chain logistics.
The case against Big Data
Before we discuss why manufacturing companies should realize the value of Big Data, let’s first understand the arguments against the staying power of Big Data in today’s global manufacturing landscape. For those who cast Big Data aside as a non-essential element in today’s supply and manufacturing industries, their argument stems in large part from the viewpoint that Big Data complicates rather than simplifies, creates additional layers of undue complexity instead of creating increased levels of visibility and transparency. The basis for this outlook is comprised of several key points including:
- Big Data is well-suited for identifying correlations or patterns within unstructured data sets, however, Big Data lacks the capability or insight to provide planners and managers with the connection, links, and larger meanings behind these correlations.
- Because Big Data is so adept at showcasing patterns or correlations, some industry analysts worry a reliance on Big Data can result in too many correlations, some of which may be false or invalid.
- Big Data excels at analyzing data and reporting which contain common variables - or, in other words, when data is similar in structure and nature, Big Data provides an important value proposition in sorting and structuring information, but lacks the capacity to account for outlying data.
While these points do have some validity, the counterpoints for why manufacturing companies should integrate Big Data into their planning and production platforms not only alleviate the challenges or pain points these concerns bring to light, the value proposition of Big Data makes it imperative for companies in order to remain lean, agile, and competitive in an increasingly complex marketplace.
Why companies should push for Big Data
Now that we understand some of the points against Big Data, let’s examine why companies should put Big Data to work and the benefits manufacturing companies can leverage from doing so. As we’ve discussed in recent blog entries, Big Data is a truly disruptive and lasting force within the manufacturing and supply industry, and its functionality and capacity to help companies increase the efficiency of planning and production and streamline back-office or operational processes should not be undervalued. Planners and managers who push for the implementation of Big Data can expect to experience a number of critical value propositions such as:
- Big Data has and is continuing to increase the adoption of other industry-leading movements such as Industry 4.0, Advanced Analytics, and The Internet of Things. Essentially, if we view these three components of modern manufacturing as the car, Big Data is the fuel that allows the car to drive down the road. Because Big Data is largely built on Cloud technology and provides companies with easy information sharing and the ability to break down communication and planning silos, industry analysts believe it’s impact and staying power cannot be understated.
- Increased accuracy of forecasting and modeling is a critical element of operation for today’s manufacturing companies. According to a recent article in Forbes, Big Data can help companies increase the efficacy of their demand planning strategies by more than 40 percent. This means Big Data not only helps companies procure materials, manage inventory, and allocate jobs and resources more effectively, but it also helps companies reduce the costs associated with shortages, overages, and replanning programs.
- On a network partner level, Big Data gives manufacturing companies greater insight into supplier quantity levels and enhanced capability to predicting supplier productivity over a given span of time. Because Big Data works in conjunction with Advanced Analytics, companies can view product condition and quantity in real-time to help manage trade-offs. This means companies can provide more accurate production timetables and more precise delivery windows to bolster customer satisfaction.
Big Data = Winning?
As you can see from our comparing and contrasting, one side of the argument clearly has more weight than the other, and more distinct points of fact to support it. While some within the manufacturing industry may still discount Big Data as a needlessly complex tool without any real value, companies who embrace Big Data have the evidence on their side that Big Data is a key value proposition in refining a company’s value chain, promoting organizational-wide growth, and giving companies a competitive advantage in an increasingly global market.