With the increasing deployment of low- cost sensors and their connection to the internet, manufacturers now have access to a large amount of data. For companies to capture the value of this data, developing mature data understanding is as important as having advanced analytical tools.
A survey of 50 small and large businesses by McKinsey&Company, published in May this year, found that the surveyed companies used only 10 per cent or less of the information gained from their Internet of Things (IoT) sensors.
The survey respondents also reported that businesses often struggle with data extraction, management, and analysis.
Annette Slunjski, managing director of the Institute of Analytics Professionals of Australia, believes data literacy – the ability to understand and interpret data – is the next essential skill that people in every industry should develop.
“Data skills are going to be essential for every industry. There is always going to be an expert analytics team within every large company, but a basic level of data skills is needed across the organisations.
“We’re not going to be in the fourth industrial revolution unless we can start harnessing the data we have and start making better decisions. Our research shows that businesses that fail to embrace data- driven decision-making models in five years, will struggle to compete,” she said.
Adopting a startup approach to data
Jason Catania, principal, data modernisation at Deloitte Consulting, believes data will change our lives, just as computers did in the 80s and 90s.
“Data literacy is soon becoming a basic requirement for everyone, and not just the top executives,” he said.
While all companies struggle to better understand their customers’ needs, the challenge is that the technical know-how on data analysis has traditionally been limited to a small group within the organisations, said Catania.
“Because the technological disruptions have happened in a very short time, many executives and decision-makers have been left behind. The reason the startup companies are often successful is because they have a technology- savvy and data-savvy person making the top decisions. Businesses that have historically treated data analytics as a discrete business function need to adopt a start-up approach.”
Hume Winzar, associate professor in business, department of actuarial studies and business analytics at Macquarie University, said having user-friendly tools has made data literacy an achievable proposition for individuals who lack specialist qualifications.
“What’s important isn’t so much having a team of boffins, but having an educated team spread throughout the workforce who are insightful about the organisation or industry and who can ask sensible questions,” he said.
Global advisory group, the International Data Corporation (IDC) in its “Worldwide Semi- annual Big Data and Analytics Spending Guide” in April classified manufacturing as one of the five leading industries to make the largest investments in big data and analytics solutions in 2018.
IDC predicted that spending in Australia on big data and business analytics solutions will make up around 18.2 per cent of the $5.5 billion spent on such solutions in the Asia Pacific region (excluding Japan) in 2018.
Choosing the right tools
Australian businesses are increasingly employing enterprise resource planning (ERP) systems to help them gather accurate data and improve the efficiency of their processes. Picking the right tools and upgrading them regularly is helping organisations maximise their output.
One example was demonstrated by the Royal Australian Mint, which is the sole supplier of Australia’s circulating coinage.
The Royal Australian Mint had implemented a manufacturing resource planning solution in 2010 to facilitate the production of circulating coins and numismatic coins. The solution was designed to provide integrated manufacturing, sales, dispatch, financial, maintenance, HR, and document management capabilities. As the solution was reaching its end of life, a significant investment was required to upgrade.
The Mint went through a thorough evaluation process before finally selecting Epicor ERP. The solution lets the Mint manage quotes, sales orders, packing and dispatching orders, as well as manufacturing processes – including planning, scheduling, purchasing of raw materials and labour. The ERP system also allows all costs to be recorded so reporting can be completed accurately.
The Epicor ERP system is integrated with the Mint’s retail sales channel – including its eShop and customer relationship management system. It is also integrated with Australia Post’s eParcel system to track shipping deliveries recorded in the system.
Another example is how Boral Roofing, an Adelaide-based national building products and services supplier, used Epicor’s help to upgrade its ERP system to manage its increasing number of projects.
Boral Roofing completes hundreds of roofing and masonry projects every month. It starts with an order for the product – such as roof tiles or pavers – from the customer. Boral Roofing then assembles the materials for the order and sends them to the worksite where they are installed by authorised subcontractors. Those subcontractors claim payment from Boral Roofing and the company, in turn, invoices the builder or customer.
There are numerous transaction points throughout these projects and each requires accurate data and efficient processing. Boral Roofing had been managing this process with a legacy and unscaleable ERP system. While data was available to support ad hoc analysis, it was not structured in a contemporary fashion. This made analysis inefficient and, on occasion, repetitive.
The company sought a solution that could be cloud-based, less expensive to own and maintain, which made business reporting easier.
Using Epicor ERP, Boral Roofing can now transact digitally and with greater accuracy than ever before. The system automates a number of processes and lets the business exchange transactional documents with suppliers and customers electronically. This puts real-time project status and financial reporting information at their fingertips, providing increased visibility into business performance.
As a result of real-time visibility of transactions with customers and suppliers, visibility of inventory demand has also increased. This enables more responsive inventory planning and forecasting, which carries a number of business and customer fulfilment advantages such as being able to respond to unexpected orders more efficiently and quickly.
Using data management tools, such as ERP, data is becoming more easily available throughout different levels of the organisation. This according to the Institute of Analytics Professionals of Australia’s Annette Slunjski is a “double-edged sword.” “Having this wide availability of data means that everyone is connected. Therefore, everyone now has a responsibility to protect the data,” she said.
Simon Elleway, digital solutions manager for Boral Roofing said adopting Epicor ERP has helped the team members adhere to good governance and business practices. For example, the system enforces clear rules around credit exposure, and provides for the simple application of delegated authority to take and record certain actions. Previously, if a customer was on a credit-hold, team members could more easily exercise discretion that was not within their level of authority.
“The senior leadership team is pleased that Epicor ERP demands strict adherence to business practice because it reduces risk. Boral Roofing can also use the system to reduce
risk in other ways. For example, the business only supplies products to licensed, insured and qualified installers. satisfaction,” he said.