Reinventing Business: Enterprise Data Warehouse Business Opportunities for Manufacturing, Part 1
Originally published March 4, 2010
Characteristics of the manufacturing enterprise continue to change at an ever-increasing pace. Globalization or consolidation of supply chains, outsourcing of manufacturing and distribution operations, emerging markets growth, mergers, acquisitions, Six Sigma quality and lean manufacturing processes, and financial reporting regulatory requirements are all driving the need for more comprehensive and timely enterprise information. Yet these same trends challenge IT organizations’ abilities to deliver the information needed to manage manufacturing enterprises.
Series OverviewImplementing an enterprise data warehouse offers the opportunity to dramatically improve business results. This series of 12 articles describes what exactly an EDW is and how it can be used to run the business, and quantifies dramatic business improvement potentials. Continue reading for a more complete understanding of what it is and what it can do for your enterprise. Many variables affect the specific opportunity for your company, but the impact will be substantial. An EDW represents one of the best investments you can make.
This series of articles describes the enterprise data warehouse and thirty major business improvement opportunities for manufacturing companies. Their combined scope encompasses the entire enterprise and realistically represents reinventing business.
Description and Scope of the Enterprise Data WarehouseAn EDW contains integrated, standardized, detailed, comprehensive, current, and historical data, providing a single source of business intelligence supporting strategic, tactical and operational decision making for an enterprise.
Enterprise means that it includes data from all functional areas and business units, and some external sources. It is designed to be used by all knowledge workers, customers, channel partners (wholesalers, distributors, dealers, and retailers), suppliers, and prospective customers (often the global public). For very large conglomerates, “enterprise” may be defined as a segment or major business unit of the parent company, provided that segment does not share common customers, suppliers, or supply chains with other segments of the business. Enterprise data warehouse means standardization and integration of current and historical detailed data in one central database.
Achieving the benefits described in this series requires atomic detail – all available data about each transaction and event, in addition to supplier, channel partner, customer, product, material, bill of material, and hierarchies (“master data”) relevant to business intelligence. This data must be standardized, requiring transformation of data from inconsistent sources into consistent data formats and content in the EDW. Normalization is required to avoid data duplication and assure that all data relationships are defined to support “any question, any time.” Historical detail is kept as long as required for the business or industry – often seven to ten years, but in some cases indefinitely.
Achieving all the benefits described in this series also requires that the EDW is current, or active. Active is defined to mean that data is loaded from all source systems at least daily – but more frequently as required. Current information enables timely tactical and operational analytics and decision making. Active also means that the EDW provides frequent or continuous monitoring of actual business status and results against defined goals, with messaging to responsible people or feedback of data to operational systems.
By integrating detailed cross-functional data from all business units and geographic regions, the EDW enables analysis of business performance and opportunities by market, customer, product, geography and time dimensions spanning corporate business units. A global scope is important for manufacturers who have global customers, global markets, global suppliers, or global supply chains.
Realizing maximum value from the EDW involves business unit cooperation and teamwork to leverage customer and market opportunities across business units in a customer-focused business environment. The EDW supports related-selling opportunities across multiple business units in the enterprise. From the customer perspective, it enables a “one face” business environment, improving customer satisfaction and being “easier to do business with.”
The EDW enables everyone in the enterprise to work cooperatively together based on shared information, while allowing business units flexibility to operate appropriately for their product, industry, market, or region. This seeming contradiction is accomplished by providing enterprise-wide standardized views of information, while also providing business-unit-specific views of the same detailed data.
The daily or continuous (“real-time”) process of feeding the EDW involves ETL:
Atomic detail is required to enable common views of customers, markets, etc. across business units, while at the same time enabling business units to maintain different, unique views. Atomic detail is also required for drill-down to actionable detail. Detailed data required to achieve all the benefits described in this series includes:
An EDW requires customer, market, vendor, product, material, organization, and geographic hierarchical relationships to complement atomic information detail. These hierarchies are required to view detailed and summary information from various perspectives or “dimensions.” They may be maintained from internal or external sources. External information sources should typically be used to maintain customer, vendor, and market hierarchies, and to provide material and services classifications. For most manufacturers, it is impractical to maintain these internally because of frequent changes.
To achieve enterprise synergy while retaining business unit flexibility requires easily maintainable hierarchies, specific to business units and functional areas, as well as enterprise hierarchies. For example, marketing, finance, and supply chain typically require different product hierarchies. Customer and market segmentation (represented by hierarchies) often varies by business unit. With detailed data in the EDW, these multiple hierarchies can co-exist. A good way to meet these requirements is for hierarchies to be maintained directly in the EDW via a dynamic front-end process. Appropriate software is available to enable business units and functional areas to update hierarchies online to meet their analytic requirements.
Hierarchies are not typically required for transaction processing. With the EDW meeting all business intelligence requirements, it is appropriate to have hierarchies sourced in the EDW or in a master data management system feeding the EDW.
The charts below illustrate some of the many interactive analytic views of information available from an EDW. Queries, as illustrated by the interconnecting lines, result in summarized, easy to understand results. Well-designed queries will allow interactive drill-down to actionable detail on any of the three hierarchical dimensions (product, customer, and geography hierarchies for the customer focused example, material, vendor and geography hierarchies for the procurement focused example). Queries may also allow drill-across to other facts or time dimensions.
Part 2 of this series will begin addressing how the EDW is used to reinvent business in the enterprise. Business improvement opportunities described in Parts 2 – 6 are grouped into 5 categories:
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