March 27, 2015

The IBM® Cognos® 8 Business Intelligence Solution for Operations Excellence

The IBM® Cognos® 8 Business Intelligence solution can make your entire supply chain, all your operations and your entire enterprise intelligent — by delivering the global visibility that is the key to your success in your business endeavor.

IBM Cognos 8 BI can track a number of key metrics that are the critical factors in the success of your Operations, for example:

Increased throughput.
Reduced manufacturing costs.
Shortened lead times.
Reduced backlog.
Improved quality performance.
Reduced reject rate.
Reduced scrap levels.
Reduced line downtime.

Linking strategic metrics developed by executives down to operational metrics on the plant floor

Most Operations personnel working in a large plant may have little idea of the official corporate strategy, or how they can best contribute to that strategy. Similarly, visibility of operational performance between the corporate and business levels is often very poor.

A scorecarding system, which may be based on the Balanced Scorecard approach or on the SCOR (Supply Chain Operations Reference) model created by the Supply Chain Council, can be very effective in making performance visible, thereby forcing an emphasis on visibility of performance targets and actual performance and encouraging an environment of increased accountability.

Manufacturers that have undertaken the  task of defining their KPIs are well positioned to adopt scorecarding technology. They will be very useful if these have been defined across multiple plants within a business unit. These KPIs should be hierarchically defined, so that business users can “drill down” into areas of poor performance to understand root causes. Web-based scorecards and dashboards
ensure maximum visibility, access and use.

Linking strategic metrics developed by executives down to operational metrics on the plant floor drives business and operational alignment, and the result is operational excellence.

Procurement Excellence

 The purchasing organization and your suppliers’ performance are quantified and tracked with KPIs
that measure quality and cost (including comparisons to alternate sources), delivery and order or requisition placement.

Supplier scorecards enable continuous, timely measurement against consistent standards for all suppliers.
With consolidated procurement information, you are better able to leverage your company’s purchasing power. You can identify suppliers that offer the same materials or services, and rapidly evaluate their offerings against the same standards.

With the ability to monitor all your suppliers, you can leverage your knowledge to improve supplier responsiveness and the efficiency of your supply chain, and you can gather data that will help you make the most profitable decisions when negotiating future procurement contracts. In addition, you can share information, such as supplier performance data, with suppliers via an extranet, so they know when corrective action is required or when standards have not been met.

Also, having aggregate information on demand, including inventory, supply, supplier performance, etc., allows for quicker and better purchasing decisions leading to a more proactive purchasing organization. With better information in hand, you can consolidate and optimize your suppliers and leverage your buying power, which means a potential for better terms and lower supply costs.

Production Excellence

IBM Cognos BI software offers visibility across all plants, lines and shifts, allowing you to monitor performance trends and to identify, isolate and analyze the source and impact of problems, whether product defects or production anomalies. With the ability to make accurate comparisons, for example, between facilities and shifts, you can discover lags and other problems that had previously gone unnoticed. You
can also identify trends in quality, efficiency or throughput, and make proactive decisions based on this insight.

Similarly, the solution makes available allows you to analyze the cost of failures: scrapped production, customer returns and other quality-related problems; downtime; as well as costs for specific
overhead items such as re-engineering and equipment upgrades.

This intelligence can be used to help capitalize on success, to analyze savings created by new efficiencies or to help understand how to repeat an event that improved quality or throughput. It also offers the benefit of being able to share production performance information with staff, including comparisons across
locations, over time, measurement against production standards, etc.

Inventory Management Excellence

The solution opens visibility into the entire inventory: the levels and locations of all assets at any point in time, their worth, their depletion rates, their use; who supplied them, who uses them; what is spoiled, obsolete or surplus; what alternative items are available. With inventory accurately quantified and tracked
across the company and its partners, and with changes measured against common standards, such as minimum or age thresholds, you will know at all times what you have, where it is and how long it will last.

From start to finish, from negotiations with suppliers through customer delivery, IBM Cognos software offers full visibility into processes and events, transparency of information and coherent standards made available across your organization.

Reference - The content is from IBM White Paper on Operational Excellence

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