Analytics is a powerful tool that supply chain experts find critical in the modern competitive market. It helps a company to understand its data perfectly and make informed decisions concerning its transportation and logistics processes.
If you’re looking to understand how analytics improves the efficiency in supply chain management, you’ve come to the right place.
What Is Supply Chain Analytics?
Supply chain analytics is the ability to make data-driven decisions based on an analysis and summary of trusted and relevant data in the industry. The analysis process yields visualized formats like charts and graphs that show trends and patterns. You can follow these patterns to make accurate predictions that inform the next course of action in supply chain operations.
It’s not surprising that the extensive processes and operations in the supply chain generate an overwhelming amount of data. Through analytics, making sense of this data, generating insights, and uncovering patterns can be straightforward. This approach harmonizes the sources and formats fragmented in the raw data into summarized patterns that you can understand and interpret.
Types of Data Analytics in Supply Chain Management
Supply chain managers might use descriptive analytics to examine and make sense of data. The internal data helps assess how your company has performed in the past. But external systems are also available to show how distributors, suppliers, consumers, and multiple sales channels performed.
Predictive analytics can help you forecast future trends and prepare for diverse situations like a possible supply chain bottleneck. If you anticipate a decrease in demand, you can be proactive by drafting a strategy to handle the situation long before it occurs.
At the same time, you may rely on prescriptive analytics to offer recommendations to your company as it pushes toward achieving its objectives. It will minimize supply chain disruptions and resolve problems because you’ll understand your data and that of your supply chain partner.
Prescriptive analytics is the ultimate solution for many supply chain challenges because it is forward-looking with a solid historical basis. Powerful tools are available to interpret large amounts of data faster and flawlessly, despite their complexity.
Cognitive analytics is another powerful tool for big data synthesis in supply chain management. This approach tries to mimic human behavior and thoughts, assisting a company in resolving challenging and complex problems. One exciting feature of cognitive analytics is its ability to comprehend context when making conclusions. The inbuilt artificial intelligence makes the tool better and more powerful every day.
How Does Analytics Improve the Efficiency of Supply Chain Management?
Improving Relationship With Suppliers
Big data and machine learning can help collect, evaluate, audit, and assess qualitative data. The information is then translated into understandable formats to help improve the relationship management strategies in supply chain operations. Using this approach, it is possible to track the supplier’s information and activities for present and future usage. You can then use these findings to make decisions that improve the efficiency of supply chain management.
Processes Design and Improvement
Big data analytics in the supply chain is critical in solving the existing challenges and improving speed and efficiency. It can support your business in developing plans, sharing data, and designing predictive models for operations improvement and control. For example, you can route order pickup and delivery and give effective order assignments to agents.
As users evolve through the product life cycle, you need to measure their changing expectations and preferences. The best way to do this is to collect, manage, and use innovative analytical tools to gain insight into the changing customer patterns for a timely response. It will also help you minimize uncertainties for the future in supply chain management activities.
Demand Planning
The last mistake you want to make in supply chain activities is to deliver an incomplete or inconsistent order to the customer. This can damage the image of your company and erode trust.
If you want to keep your customers happy and loyal, deliver the right product in time to the customer’s destination of choice.
Smart and forward-looking companies use data analytics to understand what a client prefers, their specific requirements, and the uniqueness with which to serve them for an exceptional experience.
Logistics Management
Logistics is the backbone of the supply chain, where analytics can help to optimize the service experience relating to resource application, delivery speed, and geographic coverage. One big challenge you may need to overcome is the logistics’ erroneous delivery timeframes.
Nevertheless, big data analytics is a perfect solution that improves traceability, guaranteeing the ability to track a product from the time of manufacture to delivery and freight matching.
Applying analytics to track a product can help integrate numerous supply chains and streamline the movement of goods. A huge warehouse can use data analytics to reorganize pallets during the night for optimum scheduling the following day. To optimize future staffing, a company can also monitor the pickers across diverse pickup locations.
Other Ways That Analytics Improve the Efficiency of Supply Chain Management
Supply chain analytics help to improve margins by reducing costs. When you access comprehensive data, you acquire a continuous and integrated planning approach with real-time visibility of operational efficiency from disparate data.
You can also understand risks better and predict the future when you apply analytics to spot patterns and trends across the supply chain.
Data analytics is a pillar of accurate planning because it helps you predict future demands. You can choose the products to minimize with accurate insights as they become less profitable or the demand for them decreases.
Final Thoughts
Successful companies are embracing analytics in their supply chains to reap the benefits of finding the most powerful solutions. You can get enhanced order traceability, risk detection, and benchmark operations from supply chain analytics. This is the way to go as the ultimate solution for your small and big business supply chain challenges and hurdles.
About the author
Nick Fryer, Vice President of Marketing Sheer Logistics
Nick Fryer has over a decade of experience in the logistics industry, spanning marketing, public relations, sales enablement, M&A and more at 3PLs and 4PLs including AFN Logistics, GlobalTranz, and Sheer Logistics.
