Business Intelligence And The Power of Focus

Business Intelligence is often touted by software vendors as a savior in this tough economy, and it can provide tremendous value. Yet, more often than not, it simply reinforces outdated management practices.

Researchers have found that a person’s focus determines the nature of questions they will ask themselves, and subsequently the actions that they will take. Are your people concentrating on critical areas, or are they distracted by relatively trivial matters?

The best investment your company could make may be to reduce the number of reports and options available. Your data warehouse may actually be distracting users and negatively impacting your entire company.

This may sound melodramatic, but not so for a handful of entrepreneurs who were trying to survive in a competitive industry.

Long before the term ‘business intelligence’ was coined, a VP of manufacturing and CEO asked me to look into a problem. They had recently implemented an MRP system but were still having parts shortages – particularly machined parts. This was causing the production lines to go down at great expense to the company.

So I had a chat with the foreman. He showed me the reports he was getting and though they were technically correct, they didn’t have the day-to-day detail that he needed to decide the priority and the lot sizes needed to keep up with the production lines. He told me they would be fine if they could see firm requirements broken down for the next three days of the schedule.

Next, I had a conversation with the purchasing manager and inventory control people responsible for the machine shop. They liked the idea of a firm three-day schedule. They told me that if the final assembly lines could commit to a firm schedule for three days, most of the shortage problems in the plants would go away.

So I went back to the VP and told him about a firm 3-day production schedule. It seemed everyone agreed that this was the most important KPI in the business (though the term hadn’t been invented yet). That meant everyone, including IT, needed to make a commitment and make it happen.

My next stop was the production control office. They showed me their existing process. We changed it slightly to support the rolling three-day schedule. Then I set up an overnight job to take the final assembly orders and calculate the netted daily requirements for each sub-assembly and display the results in a simple report.

From then on, every day the foreman would retrieve the report and tell his people – “If there’s any quantity required in Day 1 then build that right away. Then build Day 2, then, if you still have time, build Day 3 and then if you’re done with everything, come see me.” By the end of the first week, most of Day 1 showed as zero. Within a month, most of the quantities in Day 2 were zero and things had settled down.

And what was ROI of this simple change in focus?

The following year, a group of Japanese businessmen toured the plant with the VP. They were quite impressed by our just-in-time inventory system. Not long afterward, an announcement came down that the company was being acquired by a Japanese conglomerate.

All the executives made out I quite well I heard. A testament to what can happen when people focus on finding answers to the most important questions.

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