The Importance Of Business Agility In Uncertain Times
Disruption might accurately be named the theme of 2020. A sudden global pandemic threw both demand and supply chains into disarray, leaving many manufacturers scrambling.
This disruption cast focus on the tension between rigor and agility. On the one hand, manufacturing has traditionally thrived by mastering highly structured, complex planning. However, this degree of structure interferes with the kind of quick course correction demanded by topsy-turvy conditions like we’ve been enduring over the last two quarters.
Big Data to the Rescue
Once again, data can come to the rescue. We’ve talked a lot about Big Data and automated data collection, analysis and reporting. Accurate and robust mastery of internal data is critical for constructing the forecasts and re-forecasts and re-re-forecasts manufacturers have been generating as they try to weather this storm.
Static, traditional spreadsheets don’t cut it in today’s fluctuating and highly competitive environment. They’re time consuming and prone to human error. The Association of Finance Professionals calculates that it takes an average of 77 days to complete an annual budget and 20 more to perform a forecast using those low-tech tools. Such a slow cycle is not capable of addressing the kind of rapid changes demanded by current circumstances.
The Power of Automated Data Collection and Analysis
When data is highly automated, finance teams can easily adjust the equation to provide ongoing rolling forecasts in real time.
Increasing data automation also prevents a friction point commonly seen in the old spreadsheet paradigm: Multiple sources of data, coming from varied sources such as inventory and production, each of which is separate and siloed and demands significant human effort to consolidate them. By adopting specialized tools which seamlessly incorporate financial and other data, management can hone in on patterns in real time.
This kind of IT infrastructure may be ambitious and costly, but it can translate to great payoffs in forecasting, analysis and agility. Once in place, it is also easily scaled up and cloud-accessible. With such a system in place, operational metrics such as cycle time, asset utilization, costs and labor can be viewed both independently and as a whole.
Another benefit: KPI (Key Performance Indicator) data can be quickly available to relevant stakeholders. Dashboards enable decision-makers to easily view the numbers and see the real-time impact of changes they make or don’t make. This contributes to a more nimble plant, as well as increased collaboration and sense of accountability and ownership.
Nimble Course Correction Is Essential
Change is inevitable, and actually provides tremendous growth opportunity for those who can change course quickly and strategically. Having a highly networked command of data is an essential tool in any manufacturing company’s arsenal.