Or all of the above? I was travelling last week visiting a couple of meat packers and processors. One of them was a large sausage manufacturing facility, a market leader in their space. The reason for my visit where desires to enhance the computer systems they have in place today. Digging a little further, I learned quickly that they, similar like a lot of others, did not quite yet understand the problems they are having. They started, as so many others, a learning cycle on what computer systems should do and how they should be build.
One of the most important factors and cost justification drivers in meat organizations is the desire for better reporting. Reporting is a process in which we want to use a computer to combine existing data to visualize, analyze and scrutinize, to come to better decisions. The old paradigm was, that we need to have one single integrated system to have these reports, but this is actually not the case. Of course, integrated systems make integrated reporting much simpler. The problem with integrated systems though is, that we desire to integrate into our reports more and more data that may not reside in our business systems. It is common for people in the meat industry to combine their inventory and sales order data with USDA market pricing via the MRR Data Mart or via other market information services, but this does not stop there. I can today find public data that tell me how many people live in any given zip-code or county by age bracket and other data. I can use that data and calculate my share of calories of the infamous 2,300 calories the average adult is eating. I can correlate my sales of fresh intestines with the ethnicity of each geographical area illustrating opportunities for growth. We are in a world where a lot of data and information we want to report on are not natural part of our business application. To combine these data with our reporting, we need either a seamless integration of our reporting and business system with internet based data or we need reporting systems glue all the information together that we need. If you don’t have a formalized way in your organization, how users shall create reports that combine data from different systems, you have a reporting problem!
Of course, I cannot report on data that is not stored in a structured fashion. As I go and see facilities, I see a lot of reporting, I see a lot of MS-Excel. Let me tell you, that MS-Excel can be and should be a good part of the solution. The problem here is the way that it is used in organizations. There is nothing wrong with MS-Excel as a reporting tool. The capabilities of MS-Excel and its Pivot tables even on a basic level are more than impressive. In conjunction with the freely downloadable PowerPivot plug-in, you can create reports that with millions of data rows. It would have cost companies an arm and a leg to get a reporting tool with such capabilities just 5 years ago. The problem with MS-Excel is, that people use it as a database. They manually enter information, they create data in an unstructured way and they store these data in ways that are not accessible or process able for others. I addition, these data are not secured, they are not validated. So whenever you enter even a tiny bit of information into the spreadsheet it indicates that you have a data problem.
Some things can only be solved with thorough integration. Having all data in a single location running on a single system has definitely its advantages. You have lower system admin costs and also reporting is much easier. Nonetheless, you probably need an external reporting tool, since we are looking in today’s day and age at information we want in our reports that do not reside in our business app. Integration allows us to better change the ways and means, the results we have in our reporting systems. As an example, our reports may show that we sell too much product to risky customers and integration will allow us to put checks and balances in place that prevent sales orders from being entered that exceed previously set credit limits in accounting. Integration today is not anymore about reporting, it is about the ability to improve business processes by looking at all data related to that process. This means, that if you cannot establish processes, that keep your order fill rates above 99%, your claims for administrative mistakes next to zero, you have an integration problem. Integration problem can mean, that either a single business process does not support all the features and functions to execute correctly or that the business process requires activity and information from other processes, that it does not have.
A lot of companies have a combination of these issues. But it is really important to understand where the issues are, before we prescribe the solution on how to fix them.