Business Intelligence Blog from arcplan

Big Data for Manufacturers: Customer Feedback Should Influence R&D


In 2001, The McKinsey Global Institute published a comprehensive report on big data, Big Data: The Next Frontier for Innovation, Competition, and Productivity, which explores the value that companies across various industries may yield as result of the big data explosion. So far we’ve explored the impact of big data on retail and healthcare companies, but today I’ll explore how big data analytics impact the manufacturing industry.

The manufacturing sector stores more data than any other sector, according to the McKinsey report. Manufacturers will likely get the most benefit from big data analytics since they have so much “raw material” to work with (from machinery metrics to sales systems). Manufacturing is a relatively efficient industry, with many advances made over the last few decades to streamline processes and improve quality through management practices like lean & six sigma (and lean six sigma!). But big data can be the impetus for the next wave of improvements in manufacturing, especially in R&D.

Research and Development
Streamlining the R&D process results in greater efficiency and reduced costs for US manufacturers and is important for products to be competitive in the global economy. But in 2012 and beyond, manufacturers should be going further, leveraging big data to influence design decisions. This means incorporating customer feedback into the process, designing products and adding features that customers actually want. McKinsey calls this “design to value” or “value-driven design.”

Surveys: I’ve taken consumer surveys that ask questions like “How much more would you be willing to pay for x feature?” and I now understand why companies are asking this. They are culling data from consumers about what features are desired and if they are included in the product/service, what is the value, i.e. how much are people willing to pay for it. Gathering concrete insights is one step toward big data analytics influencing R&D. Manufacturers should be listening to what consumers want and refining their designs accordingly. It’s just smart business.

Here’s a concrete example: Domino’s Pizza. You might not think of Domino’s as a manufacturer, but it is – the company is a serious dough manufacturer, producing and distributing dough to more than 5,000 US stores.

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