In this golden age of digitalisation, manufacturing is one of the most data-heavy industries globally. According to Forbes, manufacturers annually generate an average of 1.9 petabytes.
With AI playing a key role in the explosion of data, we asked it to help create an analogy about how much 1.9 petabytes of data equates to put this into perspective. It replied that this amount of data is akin to storing the digital blueprints and real-time performance data for every machine on a factory floor, which has been operating continuously for over a century.
While the amount of data manufacturers generate is astounding, this highlights the mission-critical problem that manufacturers currently face in solving the data deluge dilemma and why they need to act now.
Executive leaders, not just CIOs, have reached a critical juncture and must now come together to ensure their manufacturing business can cope with the amount and volume of complex data being generated and stored daily.
A relatively new phenomenon, Forbes reports that roughly 90 per cent of the world’s data was generated in the last two years alone. According to McKinsey & Co., this rapid speed of data creation is driven primarily by AI and other modern technologies, computing, connectivity from digitalisation and cloud migration.
Industry experts agree that it presents both a challenge and an opportunity for manufacturing leaders with a growing sense of urgency to address their data dilemmas before the situation worsens.
Advanced data analytics is a critical part of the solution in transforming raw data into valuable insights to drive better decision-making and business outcomes, much like refining ore into precious metal.
The irony is powerful insights already exist within your data; but the real challenge is how to unlock it.
The data deluge: challenges of unlocking data insights without analytics
According to recent research conducted by the Manufacturing Leadership Council, most manufacturers don’t trust their data, with only 25 per cent of those surveyed having confidence that the right data is being collected in the first place. And less than half understand the dollar value of their data.
Other top challenges that manufacturers face include deciphering data that comes from different systems or is delivered in different formats (53 per cent), data not being easily accessible (28 per cent) and the need to upskill employees because they lack the ability to analyse data effectively (28 per cent).
Yet, despite these challenges, 95 per cent of manufacturers acknowledge their data has so much potential, unlocking the ability to make better decisions faster. While almost 90 per cent agree that data will be “essential” to their competitiveness, suggesting that they know what’s at stake if they don’t act now. Easier said than done, though, with manufacturing leaders struggling to keep the lights on, juggle workforce needs, and ensure their business stays salient.
It is clear that these barriers will be a challenge to overcome, but advanced analytics holds the key, enabling manufacturers to transform disjointed data into actionable insights that drive decision-making by all stakeholders.
The top 5 ways manufacturers use analytics to their advantage with real world examples
Navigating the data deluge successfully in manufacturing is key to unlocking efficiency, cost savings, and, arguably most critically, improved decision-making. But data analytics goes beyond just this and reveals a wealth of valuable information for manufacturers when accessed in real-time. Here are five transformative ways manufacturers are utilising data analytics.
Predictive maintenance to boost efficiency
Data analytics can anticipate equipment failures before they happen, presenting costly downtime and improving efficiency. As an example, Deloitte supported a global package delivery company that was experiencing a surge in downtime at its sortation facilities, but by leveraging predictive maintenance they predict they will drive over USD $100 million in annual benefits by unlocking capacity across 150 facilities.
Quality control and reduced waste
Data analytics can ensure consistent product quality by catching defects before they leave the factory. As a use case, General Electric used data analytics to its advantage to identify potential defects in products before they reached customers, lowering their defect amount by 50 per cent.
Supply chain optimisation, reducing costs
Analytics can pose significant optimisation opportunities for supply chain and logistics, enhancing transparency and control. According to Ernst and Young (EY), by utilising data analytics SmartMaps™ was able to mine their data effectively to transform their supply chain, resulting in a potential 5% to 15% cost reduction opportunity.
Demand forecasting and inventory optimisation
Forecast demand with laser precision, avoiding stockouts and overproduction. Through a unified view of demand forecasting, Accenture helped a food marketing and distribution company forecast errors by roughly 6-8 points, leading to roughly USD $100-$130M in potential benefits.
Data-driven decision making (DDDM) and cost profiling
Data analytics can empower leaders by transforming data into actionable insights and enabling cost profiling that informs data-evident decisions and optimises outcomes.
As a result of a data-led culture, EY reports that a video game manufacturer they supported during their data transformation journey is experiencing more efficient operations, increased customer satisfaction and a lower turnover rate.
Becoming a data-driven manufacturer: how to fast-track your digital transformation
Data is king in the new world of manufacturing and the leading organisations will be the ones who are data driven. To remain competitive, manufacturers need to make more data-evident decisions across their operations, including areas like investments, policies, and overall business strategies.
While it’s true that you cannot measure what you cannot improve, data analytics will help you uncover actionable insights that drive continuous improvement. By doing so, you can identify high-impact areas and empower your team to make facts-based decisions.
This approach drives business outcomes ranging from accelerated digital transformation to enhanced sustainable practices and improved ESG ratings.
This is particularly critical in manufacturing, a sector reported to be among the top data generating sectors globally. When manufacturing leaders know how to unlock the power of their data, they can achieve high performance and outperform their peers.
With an innovative data-analytics platform, leaders can transform their manufacturing business to unlock new data points, offering deeper insights into their business inefficiencies to identify high-impact areas for improvement and benchmark results globally with industry peers.
Are you ready to leverage a platform like INCIT’s XIRI-Analytics uncover these new insights that can drive significant change throughout your manufacturing organisation? To learn more, visit our INCIT website.
