Published on October 28, 2013
Analytics for manufacturers The three-minute guide
1 Analytics for manufacturers The three-minute guide Copyright © 2013 Deloitte Development LLC. All rights reserved.
Why it matters now
Manufacturers discover the power of analytics Many business trends—such as globalization, vertical integration, and margin pressure—are forcing manufacturers to find new and innovative ways to improve decision-making and boost performance. Analytics can help. The manufacturing industry has been relatively slow to adopt analytics. However, it is now leapfrogging other sectors by applying analytics to a wide range of business areas, from finance and supply chain to sales and marketing and product development. With internal and external data expanding exponentially—and data-driven insights becoming a strategic necessity—it’s tempting to launch an enterprise-wide analytics initiative that tries to capture and analyze everything under the sun. However, that allencompassing approach can be expensive, time-consuming, and risky. Focusing analytics on targeted business areas generally produces better results by providing valuable answers to a business’ most critical questions. 3 Analytics for manufacturers The three-minute guide Copyright © 2013 Deloitte Development LLC. All rights reserved.
Why analytics for manufacturers?
Actionable intelligence Analytics can provide actionable insights that directly support a company’s most important business decisions: Which product families are yielding lower margins? Which suppliers are most likely to disrupt our production? What is the competitive landscape on sales incentives for specific products? How can we predict and manage the levers that drive sales revenue? Since products are typically at the core of a manufacturing business, the initial wave of analytics is often targeted at improving product development. Other common focus areas include optimizing the supply chain, managing sales and marketing spend, reducing warranty spend, and improving overall financial management. Breakthrough insights in these specific areas can have a major impact on business performance and potentially deliver an impressive return on a company’s analytics investment. Also, the use of analytics can enable new revenue models designed around selling services, not just products. 5 Analytics for manufacturers The three-minute guide Copyright © 2013 Deloitte Development LLC. All rights reserved.
Competitive advantage Analytics can provide a competitive edge by revealing opportunities to improve efficiency across the product lifecycle. This helps a company spread its innovation costs across product lines and boost margins. Improved connection between decision-making and ROI With business-focused analytics, there is a clearer link between analytics investments and business decisions that deliver improved results and performance. This is especially important in the manufacturing sector, where many companies use a federated business model with multiple business units that are relatively independent. Agile, flexible, and responsive Analytics can provide forward-looking insights to help a company manage resources more effectively. It is relatively easy to adjust analytics efforts and initiatives in response to changes in the business environment. 7 Analytics for manufacturers The three-minute guide Copyright © 2013 Deloitte Development LLC. All rights reserved.
What to do now
Focus on individual business functions A focused approach to analytics often produces more relevant results than an enterprise-wide approach. It can also be faster and cheaper to implement. Lead from the business The most effective analytics initiatives are often driven by the business, not IT. Focus on business issues and strategic decisions, not just software tools and packages. Generate value early and often Implement analytics in bite-sized chunks that deliver incremental value in a timely manner. This helps build positive momentum and generates benefits that can be used to fund subsequent efforts. Create a closed-loop analytics strategy Think about your business objectives and existing analytics projects and capabilities. Develop a phased strategy that aligns with your strategic priorities over the next 12, 24, and 36 months. Measure results, and then tweak the strategy based on what you learn. 9 Analytics for manufacturers The three-minute guide Copyright © 2013 Deloitte Development LLC. All rights reserved.
Time’s up 10 Analytics for manufacturers The three-minute guide Copyright © 2013 Deloitte Development LLC. All rights reserved.
Ready. Set. Go. Analytics has the potential to supercharge your manufacturing business and give you a competitive edge in the marketplace. However, it is not a silver bullet. To reap additional benefits, you need the right approach. To learn more about how analytics can spark business insights in manufacturing, please contact us. Contributor Ashwin Patil Deloitte Consulting LLP Contacts Forrest Danson Principal US Leader, Deloitte Analytics Deloitte Consulting LLP firstname.lastname@example.org Greg Swinehart Partner Deloitte Financial Advisory Services LLP email@example.com 11 Analytics for manufacturers The three-minute guide Vivek Katyal Principal Deloitte & Touche LLP firstname.lastname@example.org Nick Gonnella Partner Deloitte Tax LLP email@example.com Copyright © 2013 Deloitte Development LLC. All rights reserved.
This publication contains general information only and is based on the experiences and research of Deloitte practitioners. Deloitte is not, by means of this publication, rendering accounting, business, financial, investment, legal, tax, or other professional advice or services. This publication is not a substitute for such professional advice or services, nor should it be used as a basis for any decision or action that may affect your business. Before making any decision or taking any action that may affect your business, you should consult a qualified professional advisor. Deloitte shall not be responsible for any loss sustained by any person who relies on this publication. About Deloitte Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee, and its network of member firms, each of which is a legally separate and independent entity. Please see www.deloitte.com/about for a detailed description of the legal structure of Deloitte Touche Tohmatsu Limited and its member firms. Please see www.deloitte.com/us/about for a detailed description of the legal structure of Deloitte LLP and its subsidiaries. Certain services may not be available to attest clients under the rules and regulations of public accounting. Copyright © 2013 Deloitte Development LLC. All rights reserved. Member of Deloitte Touche Tohmatsu Limited 12 Analytics for manufacturers The three-minute guide Copyright © 2013 Deloitte Development LLC. All rights reserved.
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