BI in local manufacturing industry yet to take off

by Ashutosh Desai    Jun 22, 2010

Businesss intelligence (BI) and analytic solutions are no strangers to industry verticals like retail, telecom and BFSI where user profiling and trending are of utmost importance to generate revenues or provide added services to its customers. Even logistics and supply chain management cannot really do without BI. But in the manufacturing and supply chain space, the need for BI solutions still needs to be fully addressed.  

In manufacturing, feels Sriram K Moorthy, Head (Telecom & Analytics), ConnectM, most companies believe that once they invest in an ERP system, a lot of the planning requirements can get taken care of. But the real challenge lies in how they can optimize the data that they are feeding into the ERP system. "In order to be competitive, they need to start looking at better planning and forecasting tools."

Moorthy said, "MNCs that have global operations have already invested into business intelligence and analytics. The rest of the Indian industry is in the catch-up mode." The main roadblock, according to Moorthy, is the question that local manufacturing companies seem to have about whether it is worth investing in analytics. These companies question why their employees cannot handle it themselves because the understanding is that BI is ‘MIS reporting’ or ‘timely MIS’.

Over the past three years, BI is taking a higher priority amongst CIOs, stated Moorthy. "Last year the recession definitely helped because the challenge was to reduce operating costs. Six Sigma and ‘lean’ was always there but that was more on the quality of the product. It was not towards the business processes or operation costs."

"The industry is just at the take-off stage where companies are only pursuing proof of concepts or ideas as to how analytics really help them." The M2M (manufacture to manufacture) field, which ConnectM caters to, is still a few years away from actually having ‘proper tools’. The day when off-the-shelf BI tools will be available for this space is still some time away because right now a considerable amount of effort in customization is required to cater to specific industry needs.

Another challenge is the lack of data. "Data available in the M2M space (manufacturing and supply chain), in India is so less. It will take some time before we can have an off-the-shelf product in analytics," explained Moorthy, "In the M2M space, except the process industries where again it is only the process which is monitored, there aren’t too many solutions that monitor the health of machines."

For example, construction or passive infrastructure providers in telecom today do not have the means to accurately measure the energy consumption at site. They are at the level where they need accurate and reliable data. The second requirement is the need for getting timely reports. Only then can they start leveraging the advantages of BA.

The way forward is to first ensure that data is recorded accurately so as to analyze the information it at a later date. "Most of the clients we have been talking to are at the level where MIS reports are the first need of the hour. It is a web-based application which is customized to an individual customer’s needs." Only after 3-6 months, depending on the amount of information collected, can ConnectM show customers the power of analytics. "The more data you get, the better it is," vouched Moorthy. 

Tags: industry