BI and ERP: tools to help SMEs and large companies manage their manufacturing activities

Today, manufacturing companies collect massive volumes of data which, without processing, remains mute and unusable. Hence the need to analyse them to identify indicators, trends and growth potential. To achieve this, companies can use BI (Business Intelligence) tools. BI is responsible for strategic analysis, based in particular on operational data from the ERP system. The ultimate objective: decision support. 

Business Intelligence covers all the technologies that support strategic decision-making. This is the common denominator with The ERP system, which helps to make the optimum operational decision. To make the most of these solutions, an industrial SME must first and foremost choose the most relevant indicators to illuminate the action that will lead to the objective. 

Which KPIs are relevant for BI? 

Managing your business with the right indicators enables you to monitor the progress of your strategic objectives across the whole company, as well as in each division. This is why the company must use global KPIs that give an overall view of the company, and KPIs specific to each department that feed into the global KPIs. This multi-level visibility is a compass that enables decision-makers and each department to keep their eye on the company's overall objective. 

KPIs should regularly monitor the overall performance of each key area of the business, including sales, production, procurement and engineering and development. Hence the key KPIs such as sales levels, which can be broken down by segment, region, product or return on investment. KPIs can also be used in finance, for example in terms of receivables/payments, in market intelligence with sector profitability, or in productivity by tracking revenue per employee, payroll per hour, costs, number of units produced or compliance with deadlines, among other things. 

Industrial and specific KPIs 

In addition to the performance indicators common to most companies, it is relevant to monitor KPIs specific to the business. For example, return on assets will be crucial for businesses that own assets such as machinery, or points of sale, compared to a service business. 

In manufacturing SMEs, stocktaking is a strategic metric. Keeping track of stock levels on a month-by-month basis is complicated and time-consuming. It would be better for the company to equip itself with a A solution capable of tracking stock rotation and to cross-check it with the following production requirements, which take into account framework orders and products in reserve. This indicator makes it possible to anticipate and avoid stock shortages.  

KPIs at the heart of ERP data 

The ERP system that collects and analyses operational data is a source of useful indicators for BI. The data it centralises and consolidates reflects what is happening in the business in real time. This includes data such as quotations, order taking, stock management, production launches and production monitoring. ERP connects to different functions such as production, customer relations, administration and finance, and governs all the company's management rules. It decompartmentalises data by bringing it together in a central database, consolidating it and extracting information that is useful for operational decision-making. 

The ERP already carries out various analyses to produce KPIs for operations. For example, on a production flow, ERP consults stock and order data, records what is happening in real time in the production chain and, on this basis, calculates the optimum flow, without dead time or bottlenecks, optimising resources and materials. For decision-makers, organising such a flow would not be possible without the analyses provided by the ERP.  

Moving from KPIs to strategy 

The strategic dimension of the company's overall management is, for its part, a matter for BI. The BI tool centralises information from the company's management tools, in particular the ERP. This centralisation will enable an overall analysis that is more sophisticated and effective than if the sources had to be analysed separately.  

Key BI capabilities include powerful multi-dimensional analysis functions, at any desired level: global, by division, by region, etc... . BI tools are also becoming increasingly predictive thanks to artificial intelligence and Machine Learning. It provides a clearer picture of what is going on in the business and in the environment of the SME or large industrial company, enabling anomalies to be spotted and unusual events to be anticipated. This gives decision-makers the tools they need to make informed decisions that are conducive to business development. These decisions save time, make the company more competitive and enable it to plan ahead. 

Another strong point of a BI solution is that analyses can be reproduced in a wide range of dashboard formats , making them immediately readable. User-friendly and ergonomic, these pivot tables, graphs and charts can be easily created and customised by users, with no need for expert knowledge of BI. This makes it possible to quickly interrogate the BI tool on any new issue, as and when required. 

How do BI and ERP work together? 

BI and ERP work together to centralise and consolidate data. An ERP can interface with BI solutions on the market, but it can also offer its own BI module, guaranteeing total integration.  

The ERP will feed the BI solution with all the operational data required for customised analyses based on the nature of the business. Combining BI and ERP means that all the ERP data can be taken into account when building the queries carried out by BI. BI adds a layer of strategic analysis to KPIs and ERP data, consolidating them according to parameters that can be customised at will to highlight trends, developments and performance levels. Decision-makers then benefit from a high-level analysis when making each strategic decision.