Data-driven decisions

Data-Driven decision making

The Art of Data-Driven Decision-Making in the Manufacturing Industry, by Roderick Ongpaov CA, Head of Implementation Services ANZ at Jedox.

The global manufacturing industry has taken a hard hit over the past few years. According to the Australian Performance of Manufacturing Index (Australian PMI), the sector’s performance dropped by 1.5 points down to 52.5 in July 2022 due to supply and labour constraints affecting the Australian economy. Numbers above 50 on the index indicate expansion, with higher numbers leading to a faster rate of expansion. While demand for goods remains high, manufacturers are struggling to keep pace with production due to a lack of skilled workers and supply chain disruption. Given the added pressure of post-pandemic conditions, smart business management is mission critical to manage the challenges the industry faces. Apart from the soft skills managers require such as emotional intelligence, trust-building abilities and effective communication, they also need to embrace a data-driven mindset to tackle the issues at hand. The manufacturing industry is clearly the most data-heavy sector in the world. The key to its management is based on increased automation, AI and robotics. However, it is not just a matter of generating data, but knowing what to do with it. Building a data-driven culture

Creating a data-driven culture requires a collaborative mindset on all levels of the organisation, which is based on the principles of organising and sharing information, focusing on planning and forecasting and easing workflow processes. The pandemic has underscored the evolving role of the CFO as a value partner who informs business performance beyond the daily numbers. While executive buy-in is an essential component to building collaboration, one of the greatest stumbling blocks for organisations today is fragmented data strewn across multiple silos without automated processes to keep decision-makers informed in real time. According to a recent CFO Research and FTI Consulting study, more than 40% of the executives surveyed claimed the pandemic had a significant impact on cost management, financial planning and analysis, and budgeting and forecasting. In addition, supply chain disruption has rendered projections moot, placing an increasing drain on cash reserves. More than one-third of the survey respondents said that risk management, treasury and working capital management, technology adoption, and accounting and financial reporting were also significantly impacted due to the pandemic. But only 27% said that at least one in five members of their finance team were virtual, which suggests that automation has not reached its full potential in most organisations. Eliminating and automating manual processes was a high priority or critical priority for 52% of the surveyed executives. But are they doing it? Accelerated need for digital transformation

A recent global survey on the state of digital adoption found that 67% of the executive respondents claimed to be under considerable pressure to accelerate their digital transformation initiatives. While organisations plan to invest an average of USD30m in digital adoption in the next three years, the challenge remains that 70% are unclear as to who is responsible for owning the digital adoption strategy itself. A particular trend is emerging for the Office of Finance to embrace technology in ways never seen before to ensure a smooth operation across the entire enterprise. Sharing data from all levels of the organisation has become integral in overall business strategy and management. The Case of IFCO

IFCO is the world’s leading supplier of reusable packaging solutions for fresh products, serving customers in over 50 countries. The company has a worldwide pool of more than 314 million Reusable Plastic Containers (RPCs), which are used annually for over 1.9 billion deliveries of fresh food from producers to retailers. IFCO RPCs optimise the food supply chain by preserving freshness and product quality, saving costs, and being more environmentally friendly than disposable packaging. The service-oriented business model requires a great deal of logistics knowledge, as IFCO serves its customers’ supply chains very individually. The RPCs are made available on site, picked up and professionally cleaned. IFCO sought a self-sufficient data management system to facilitate faster reporting. The ability to self-service in the support, development and operation of the reporting environment was elemental for IFCO’s expansion. They have developed several applications for individual departments and regions that run integrated with consistent data and reporting structures on the basis of a smart Enterprise Performance Management software available worldwide. The daily updated Transport Freight Report, which supports various detailed analyses, is one of the most important control instruments for the company today. The impact of its efficient data management system has contributed to its sustainability approach: Through its efficient data reporting system, the company helped save the planet over 616,000 metric tonnes of CO2 emissions in 2021 alone. Effective contract management

As a larger application, a contract management module for roughly 50 users was developed and rolled out within five months. The module helps account managers plan upcoming projects, supports contract creation through an integrated release workflow and provides an overview of contract status. Now, account managers enter their upcoming customer projects directly into the Webbased system, driving access from anywhere and making all data immediately available centrally and aggregated. The integrated platform saves considerable costs and time, ensuring significantly higher data quality by avoiding human transmission errors. It is automation at its finest, allowing for decision-makers to access data at the click of a button. Change is inevitable. Those who are equipped with the right solutions will be able to pivot more quickly, adapting to market demand faster and with the power to ride the next wave that comes their way. jedox.com/en/