How Do You Make Data-Driven Decisions for Manufacturing?

There’s a big push in a lot of different industries, especially in marketing, that they have become solely data-driven. They look at all their past performances and make decisions about new initiatives based on what their old efforts did.

They either throw more resources at a flagging campaign (or product) or drop something that just wasn’t quite achieving their desired results.

Marketing is almost impossible to be data-driven unless you’re in a consumer business. Then, you can get all your surveys and focus groups together and what have you and you can make some decisions from that.

But if you’re in a B2B world, your audience is not big enough or consistent enough to be of much use to you from that perspective. This is true whether you’re a marketer or a manufacturing operations executive.

Think about airline frequent flyer programs. Their database is huge because it’s everyone who ever bought a ticket. You can easily make data-driven decisions because you can market to everyone who has ever flown on one of your planes, segmenting out by membership levels, number of flights, and even destinations.

But if you’re in an industrial business that sells a specialty product, you won’t get those kinds of numbers, so therefore your decisions will have to be driven by what your customers tell you they want.

Is this the same as measuring your results?

In a word, no. Being data-driven is not the same thing as measuring your results. Those are two separate things.

For example, our automated Duoline factory gathered 44,000 points of data per day, and that data was used to validate quality, production, and specifications.

It validated what we had, not what we should make. We certainly weren’t going to decide to make a different product based on the data we were collecting.

Instead, sitting with customers and asking them what they needed told us if they had an application for a different product. That’s what should drive your decision for new products. But, technically speaking, that’s not data, that’s information, conversations, and plans.

Even sales data should drive your production as part of your regular measurement, not your product development.

That is, you’ll check for seasonality and trends by doing your proto-analysis (see Cut Your Bottom 10%: Using an ABC Analysis to Find Your Lowest Performers) to learn what products sell the most and what ones sell the least. You can also break down sales by month and even geographically.

All of this will tell you what you have done, and yes, I suppose it can tell you what you should keep/stop doing. But it still can’t predict the future.

That comes down to talking to your customers and listening to what they need.

I’ve been a manufacturing executive, as well as a sales and marketing professional, for a few decades. Now I help companies turn around their own business, including pivoting within their industry. If you would like more information, please visit my website and connect with me on Twitter, Facebook, or LinkedIn.

Photo credit: Life-Of-Pix (Pixabay, Creative Commons 0)