Running the Numbers: April/May 2007

The latest facts, figures and benchmarking data in Business Intelligence, Manufacturing, Radio Frequency Identification, and the Express and Parcels Industry


Compiled By Sarah Murray

Business Intelligence
Companies Have Room for Improvement in Business Intelligence

Ventana Research recently conducted a survey of companies, including Supply & Demand Chain Executive readers, to see how executives in the various functions of manufacturing and supply chain operations view business intelligence (BI) and the role it is playing, or should play, in their organizations.

Based on Ventana Research's own Maturity Model, which categorizes and evaluates BI maturity at four levels — Tactical, Advanced, Strategic and Innovative — survey respondents that practice or will practice supply chain BI were found to do so at either the Tactical or Advanced level. Only 9 percent of respondents' companies could be considered Innovative, using supply chain BI not only to manage their supply chain processes but also to help manage their demand-shaping activities.

The research also reveals that improved customer service and inventory visibility are the goals driving supply chain BI initiatives. Companies said they are looking to apply BI primarily to sharpen the accuracy of forecasting, reduce costs, reduce inventory levels and better understand the drivers of customer demand. Even so, the evidence shows that they are primarily intent upon using supply chain BI to improve forecasts and demand management.

Ventana Research offered some steps for any company using, or considering using, supply chain BI:

  • Assess your maturity and take steps to improve it. Compare the maturity of your organization to that of your industry, and use this benchmark to determine your strategy and steps to implement it. Determine the ability of your BI technology providers to add supply chain BI, and look for areas where you can leverage supply chain BI to extend the value of your investments.
  • Expand deployments beyond direct supply chain users. Ventana Research recommends that companies expand the scope of their supply chain BI to include members of executive management and Finance, Sales, Marketing, Engineering and Product Development. Companies should engage the COO, general manager or CFO as the primary sponsor of their supply chain BI initiative in order to improve the success rate.
  • Measure the performance of your processes. Expand use of supply chain BI to measure the effectiveness of the core supply chain processes. Your company can apply supply chain BI to transform itself into a demand-driven enterprise by making decisions about how the supply chain processes can make the company more effective (not just more efficient).
  • Use supply chain BI to improve your balanced scorecard. The best way to measure process effectiveness is to organize your supply chain BI measures according to a standard performance measurement reference model, like the Supply Chain Operations Reference model (SCOR), created by the Supply Chain Council (www.supply-chain.org).
  • Integrate plans, schedules and forecast data. Seek to improve your understanding of plan performance by using supply chain BI and analytic applications.
  • Use advanced BI technologies to improve decision-making. In addition to reporting; dashboards; and extraction, transformation and loading (ETL), also use the more advanced BI technologies, including ad-hoc search, multi-dimensional cubes, business rules engines, workflow, business activity monitoring and alert notifications. Applied in the right way, these technologies help to improve decision-making by automating the time-consuming task of analysis.

Manufacturing Outlook
Manufacturers Alliance/MAPI Index Points to Positive Trends for Sector

According to the Manufacturers Alliance/MAPI Survey on the Business Outlook, a leading indicator for the industrial sector, the March 2007 composite index of 58 is up from 54 reported in the December 2006 survey after three quarters of decreases. A composite business index above 50 indicates that overall manufacturing activity is expected to increase over the next three to six months.

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