Analytics is the foundation for making data-driven decisions, based on a summary of relevant, trusted data, often using graphs, charts and other means. Supply Chains typically generate massive amounts of data. Supply chain analytics can therefore generate very valuable insights for your business and help you improve on all aspects.
Thoroughly monitoring your supply chain could bring significant operational and business benefits to your organisation if you use the right set of tools and processes.
If you get these two pieces right, your supply chain can easily become a competitive advantage because of its complexity and its important role in your organisation’s cost system.
Challenges for supply chain
- Lack of real time transparency
- Lack of synchronization between planning and execution
- Unreliable reviews of safety stock levels causing irregular inventory
Benefits which can be achieved through data analytics
Improving efficiency – analytics which show the business where there is room for growth in areas such as the time needed to approve purchase requisitions, process invoices and monitoring the number of retrospective POs, can have a huge impact on increasing the businesses efficiency.
Receiving meaningful insights from the dataset – companies have a lot of data hidden in their procurement systems. Understanding and setting which metrics are important to follow for your business is the first key steps in using your data better.
Cost reduction – with the help of AI, nowadays huge volumes of data are becoming more and more easy to manage. Not having a clear view on the spend with suppliers can mean missing huge cost savings opportunities – how can the supplier base be rationalised, where is contract leakage, which suppliers across which regions could be consolidated – these are just a few examples of questions that a simple set of data can help answer.
When time and effort is invested in supply chain analytics it should be a key tool to a business. Many organisations are already exploring the options using “big data analytics” and “artificial intelligence” in order to gain a competitive advantage.
Why do organisations lose touch with data analytics?
One reason is the cost of the analytical tools, which can be a key factor in acquiring new technology. In our experience many of the companies that decide to avoid costs of technical solutions continue with manual processing which often result in a false economy. Another aspect is that the output may not be utilised effectively – there is no certainty that the user will know how to interpret the data correctly and this could lead to incorrect decisions.
Supply chain development and improvements happen from the bottom up and the top down. Having a foundation of strategic supply chain analytics agenda driven by clear objectives is extremely important and without that these benefits/solutions may not add up to the improvements your organisation is looking for.
Interested in knowing more on how to apply these benefits to your supply chain? Let’s have a chat!