It has been a tough year for everyone, and manufacturers are no exception. The latest Covid-19 Manufacturing Monitor from Make UK indicates that while the situation has improved, as of the beginning of September only 46 percent of firms had achieved between 75 and 100 percent of their pre-Covid-19 operating levels, and two thirds have not ruled out making redundancies in the next six months.
Clearly, there are some tough decisions that need to be made, but how do manufacturers go about ensuring that they are the right ones?Not only being decisive but being correct as well. Often, it can be the fear of not picking the right choice that stops people from making one in the first place.
Increasingly, it seems, we attribute a company’s future fate to decisions they made years before. Look at Motorola’s decision to not manufacture smartphones – a mistake that led to it losing billions of dollars and eventually demerging into two separate businesses, one of which that is now owned by Google.
Yet it is rarely one moment that seals a company’s fate. More often than not, the choices we hear about are merely the most notable of a whole raft of decisions, all influenced by the culture unique to that organisation.
The consistencies in decision-making
That said, there are some commonalities all businesses will recognise. From the number of people involved, to the propensity for cross-functional collaboration, the availability of data and other intelligence, and the types of tools available to assist in decision-making and dissemination, there are a number of factors that influence how a company makes decisions.
There is no doubt that all organisations need to be able to make fast decisions. The pandemic demonstrated what could happen – decisions that previously took many months and several committees were being made in days, if not hours.
However, operating at a pandemic state of crisis is neither sustainable nor beneficial in the medium term. That means businesses need to have in place proper procedures and processes that facilitate accurate, timely decision-making.
So, what is the state of decision-making in manufacturing, and how does it compare to other industries?
Encouragingly, latest research on the State of Decision-Making shows there appears to be stronger levels of collaboration in manufacturers than other sectors – just a fifth of decisions are made in silos, compared to a third cross-industry. However, when it comes to how they make decisions, nearly half of manufacturers admit to including ‘gut feeling’ in some form, and more than three quarters rely on spreadsheets to support their decision-making processes. This stands in contrast to the broader industry results, where only 57 percent used the tool.
Also concerning was the challenges respondents faced when making decisions. Not enough data and insights available was the biggest obstacle for a third of manufacturers, compared to slightly more than a quarter of respondents in other industries.
To improve their decision-making processes, two thirds of manufacturers wanted increased use of data and insights, with 57 percent believing new technology would help.
Culture, data and technology
How then do UK manufacturers improve their decision-making, and what are the steps they need to take?
Firstly, they need to establish a culture where only those that are absolutely necessary can be part of a decision. That doesn’t mean a select cabal dictating all company policy; it means having a clear understanding of roles, responsibility, and accountability in the decision-making process, and where the boundaries of individual remits fall.
Secondly, those with decision-making responsibility need to commit to using data and insights appropriately. Gut feelings can provide guidance, but it should be timely, accurate data that informs and provides evidence to support decisions, as recognised by the two thirds who believed increase use of data and insights would have a dramatic improvement.
Thirdly, that data needs to be captured and deployed in tools that are fit for purpose. That means ones that brings interactive reporting, planning, forecasting, and predictive analytics. By doing this through integrated business planning, senior leaders have full visibility of the entire company’s performance, allowing them to take into account everything from KPIs to operations, access instant insights, and make decisions in real-time. Encouragingly, 57 percent of manufacturers identified new technology as an important step in helping the situation.
Building the right decision-making environment
Everyone wants to make the right decisions, but many manufacturers struggle to create the right environment in which to do so. To overcome the obstacles they face, they need to establish the right culture, integrate data effectively, and deploy the right tools. Accurate, timely decisions are increasingly the difference between success and failure, and it is critical organisations make the right choices at a time when few will get a second chance.
