We have been hearing a lot about predictive analytics and how it helps to anticipate future issues that a company might potentially face and also save them a lot of money. But how does predictive analytics spot these issues? And how is it valuable to businesses?
According to IBM’s Predictive Maintenance Quality (PMQ) Red Book, predictive analytics focuses on preventing potential failures and extending the component lifecycle. This is usually carried out by checking if the components are worn out and how often they are used. Furthermore, the type of conditions that the components might fail in can be found out as well. By detecting these potential pitfalls early, businesses would be able to deduce the approximate component’s lifecycle and even understand how to increase it. This would also give businesses a higher return on their assets and improve their maintenance, inventory and resource schedules.
Apart from improving a business’s maintenance, predictive analytics is also vital to predict any abnormalities that may arise in a business’s production. For example, conducting a detailed root cause analysis could prevent companies from losing a lot of money. A recent example of a company that has started to engage in predictive analytics is Toyota. From 2009 to late 2010 Toyota has recalled over 16 million cars due to a series of faults. According to Toyota North America CEO Jim Lentz, “…through analytics, we can take data and connect the dots. We are recalling cars earlier because we’re connecting the dots faster.” Therefore, by finding out the core issue quickly and companies would be able to attain their business goal of ensuring their most important stakeholder – the customer, is satisfied with the product.