Modern Manufacturing

Leveraging Technology to Reduce Business Decision Latency

John Klinke
Director, Oracle Industry Strategy Group

Guest Author: Enrique Lopez-Tello, VP, Industry Strategy Group, Oracle.

Given the current business environment, it’s easy to see that you need to be diligent in watching out for unexpected events that can impact your company’s performance. The time it takes to analyze and decide on the best course of action after one of these events is what we call business decision latency. As time goes by after a critical event has happened, your ability to optimize the results of your decisions steadily declines.  

There exist 5 "Moments of Truth" that increase or reduce latency in business decision processes. We already discussed these in my previous blog post: The 5 Areas of Business Latency that can Derail Your Integrated Business Planning and Execution.

So, the question now is what can you do to reduce business decision latency? The short answer is:

  • Continuously leverage advanced technology to improve your business decision processes
  • Focus on the areas where new technology investments will have the biggest impact 

There exist today a variety of advanced technologies that add value to business decision processes by reducing latency. Here are some areas associated with business decision making where you can reduce latency with technology investments:

Early warning systems may not prevent a disruptive event from happening but detecting that event as soon as it becomes probable will give you more time to prepare for it. If you do not have this predictive approach to unexpected events then some events will hit you by surprise and obviously this is not good for your business.

Using predictive analytics in a control tower for your business is just the start. You must also monitor unstructured and semi-structured data sets to enrich your early warning systems: not only data streams coming from your sensors, but, where appropriate, also video signals, social media, news feeds, etc. 

Some relevant data on changing conditions you certainly are already monitoring. But you should continuously try to identify other critical areas of your business and proactively monitor them for unexpected events as well. 

You should also go beyond the traditional approach of just analyzing “data at rest” and explore ways to do real-time analysis of “data in motion”, otherwise known as “fast data.” Having the ability to analyze “fast data” as it is happening gives you a leg up on detecting unexpected events in real time. 

This challenge of incorporating “fast data” into your analytics can be addressed by the latest in advanced in-memory database technology complemented by AI-powered rules engines to uncover relevant events from general “data noise” and bring them to your attention in real time.

Getting a message on your phone that a truck delivery to one of your factories will not happen could be of little value to you unless you understand the relevance of this info. Data points like this are more valuable when you also understand the context of the impact on your business. 

  • Case 1 - Your projected on-hand will remain at a safe level until a new delivery happens. 
  • Case 2 - Your projected on-hand will fall below safe levels. Then a new delivery of this material should be expedited to solve the potential problem before it happens.
  • Case 3 - The material needed to assemble a critical product to make your annual sales is no longer available.  Then your management team should get together fast and use an S&OP cycle to decide which customers will be hit and which ones can you still save.

Modern, integrated supply chain, logistics and manufacturing solutions can support this type of contextual information and provide the business processes needed to escalate critical production issues like the one seen in Case 3.

In some cases, the course of action to address an unexpected event could be automated by adopting industry best practice and developing specific automation rules (often assisted by AI technology). You could also benefit from 'what if' simulation tools that help define alternative scenarios and assess real end-to-end plan feasibility, results, and risks. The beauty of today’s advanced technology is that you can do this across many business domains including finance, quality, services, operations, and sales.

The challenge for every business is turning plans into action seamlessly. The best approach is to have “loosely coupled” coordination at different levels to move plans into action. This allows coordination needs to adapt to the needs of real time execution.  Of equal importance is having visibility into the plan - a single data model that allows contextual views of the plan for all participants. Then to reduce latency, you should invest in technology that enables your organization to adapt quickly to changing conditions as the plan evolves into execution and implementation.


Taking Your First Step
Where do you start? You need to do a little legwork to decide where your organization has the biggest shortcomings in the areas discussed above. Then investigate and invest in the technology that will give you the biggest return on investment. For some organizations, improving prediction, detection and analysis will be key.  For others, investing in better planning and plan execution will be paramount. There are many paths to reducing latency in your business, and each organization will have a slightly different journey.

Oracle has invested heavily in developing modern technology solutions like Integrated Business Planning and Execution that enable you to reduce business latency and optimize planning and operations. We encourage you to learn more about Oracle’s comprehensive offerings for manufacturing, automotive, and high tech companies.