Reporting and Budgeting Tools for Manufacturing Companies
This article will discuss financial reporting and budgeting needs for the manufacturing industry that can be met by modern, powerful BI tools.
In today’s business world, it is becoming pretty clear that Business Intelligence (BI) analytics are the modern way of turning important company data into rich decision-making for the future of the company. However, I wonder how many professionals, new to or familiar with BI processes, have found the commercial solutions a little vague or confusing in terms of applying functionality to industry-specific data management and analyses. I recently had the opportunity to talk to an accountant in the manufacturing sector, and we discussed the confusion associated with shopping around for a product that can meet the needs and goals of her manufacturing organization. Thus, this article will discuss the top features and functions you should know about in modern reporting and budgeting software, and I will then explore the important ways to manage and analyze your data as a manufacturing company.
Perhaps important to note first: there are a handful of overarching components that make up modern, dynamic, and powerful BI solutions. There are a couple of ways that you can integrate your data. With some third party solutions, you can run live right from your enterprise resource planning (ERP) system. A live integration provides real-time analytics, with data directly from the ERP database. Another integration option involves a BI data store, like an OLAP cube or a data warehouse, which is a space that can store diverse types of company data on a stable platform, providing high performance analytics.
A BI data store only requires that you replicate your information from the data source to the BI database in order to achieve an up-to-date analysis. A BI data store provides a more stable method to run reports and generate budgets as opposed to querying data live on the ERP server, but does involve the added expense of the software. Sometimes, it requires more time, money, and personnel to manage the device. Each company will have different needs, so you will have to weigh the best option for your team.
Moving on, another major consideration involves the software platform. Today’s third party reporting and budgeting software vary from Excel-based, web-based, proprietary, or a combination. As Excel is globally embraced by finance departments, it might seem like a logical assumption that Excel platforms would be the easiest to implement, and I’m not saying they aren’t, but there’s more to consider. Modern Excel add-ins are ribbon additions to the top toolbar that accelerate and turbo charge the spreadsheet program to better analyze and plan with company data. However, the web seems to be unstoppable, in terms of building momentum as the buzz word in the technology world.
Web-based reporting and budgeting is in the middle of revolutionizing the data management and analysis experience, offering flexibility and mobility from anywhere you have internet connection. There are pure Cloud offerings, which means that they are hosted in the web by a third party, are usually not Excel in nature, and typically require a BI data store for analytics. There are also some self-service hybrid products that are web-based, as well as Excel-powered, offering the flexibility of formatting familiarity and anywhere access. Finally, you can also consider proprietary software.
Some third party manufacturers argue that Excel is a pain when it comes to linking spreadsheets and collaborating on financial statements and organizational or departmental budgeting. These independent software vendors (ISVs) are usually offering their own BI proprietary software that are usually powerful in nature, but require you and your team to learn formulas and coding outside of Excel. Depending on the complexity of the product, it might not be worth your time. If the software speaks adequately to your manufacturing analysis needs, it might be the right product for you. And some products combine some of the platforms. Reporting that is proprietary and Cloud-based, budgeting that you can access and manage from Excel and the web, etc. You’ll want to do your own further research to figure out what will help you achieve your specific goals, but there’s still more to consider.
Final things to consider: ease of use, collaboration, and security. Simply put, if the product isn’t business user friendly, it is not worth your time. Today’s financial reporting and budgeting tools should be making BI processes easier and quicker for your manufacturing organization, so if it isn’t easy to use for you and your team, there are products that will offer that ease of use. Similarly, you should be investing in a solution that allows you to securely collaborate on analytics. We’re far enough into the 21st century that our professional technology should reflect the need for collaboration and security, whether we’re on Excel, web, and/or proprietary platforms. Now, let’s dive into specific BI reporting and planning for the manufacturing industry.
BI reporting for manufacturing can be financial and operational in nature. There are several modules that you should look for in a product, in order to meet your analytics goals as a manufacturing company. Besides the required financial reporting module, which involves GL reporting, a sales module can offer some structure to tracking customer orders, requisitions, back orders, ship dates, finished goods, and sales orders. A purchasing module can report on purchase orders, whether you’re requesting raw materials, organizing various supplier components or proper tooling and equipment. A survey data module can produce a supplier quality report that measures survey data and supplier ratings, the quality of supplies from various suppliers, on time delivery, and costs. An inventory module can detail inventory on hand by location, stock keeping units (SKUs), and warehouse management. Finally, a manufacturing/production module focuses on a Build of Materials (BOM) report, zooming in on what’s being built, by which operational line, and works in progress.
As for budgeting and forecasting forms, you should look for a product that offers ways to enrich your planning processes. A payroll module can help you to organize and plan with union and non-union pay scales, as well as shift differentials. A capex module empowers you to plan and manage the expenditures you expect to incur for equipment management, while a project module focuses on design and production for a new product or product build. An inventory manufacturing module offers demand production planning with a focus on quantity, pricing, and cost. An expenses module allows you to organize your projected general and departmental expenses.
There’s a lot to consider, and Solver offers Excel, web and/or mobile-based reporting and budgeting as stand-alone tools or as part of the comprehensive suite of BI modules and would be happy to generally answer questions and review BI360’s easy-to-use solution for collaborative, streamlined decision-making capabilities for manufacturing organizations.
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