How Analytics Can Enhance the Supply Chain for your Business?
Supply Chain is an integration of organizations, people, activities, information as well as resources that work towards moving a product from the supplier to consumer. Supply Chain is a vital to the total value chain of an organization. It is the backbone of your business, and helps further your business strategy. Instead of focusing on the functional excellence of your supply chain, try to bring it forth as a strategic capability of your organization.
Today organizations have access to more data than they can imagine, and it has become a necessity to leverage on this data to gain the competitive edge. The main challenge is to capture this data in real-time, analyze it and predict the outcome. Data-driven analytics can help present smarter supply chain for your organization, which in turn can help you expedite deliveries and serve towards customer satisfaction. A good supply chain can enhance the customer experience.
Before moving on to how analytics can enhance supply chain for your business, let’s understand the main challenges that the supply chain in organizations face.
Globalization is no longer a struggling entrant. It has seen more power and growth since it came along, with many organizations trying to spread its wings across countries. The logistics and operations management across the different countries is highly complex, and poses to be a challenge. Inefficient plants, inconsistent suppliers and delayed shipments can lead to increasing supply chain costs, thus causing dissatisfaction. Visibility of the global supply chain and the logistic processes comes across as a major challenge to the organizations. Apart from this, managing the demand volatility and the cost fluctuations in the supply chain can also become a major issue for organizations with global presence.
Analytics is gaining importance in this data-driven global world. Analytics, with the real-time availability of data helps resolve the supply chain challenges organizations face. Many companies have realized the potential of analytics in supply chain, which helps organizations innovate and get the competitive edge. It also helps make informed decisions, thus supporting the critical, tactical as well as strategic activities within the supply chain. Analytics and the insights there from has helped reduce the overall costs, and optimize the value chain. Let’s understand how analytics offers solutions that can enhance the supply chain for your organization.
Improve Supply Chain Visibility
Globalization has led to an increase in the number of suppliers, manufacturing units as well as distribution locations. This has led to a substantial growth in business, and increasing availability of opportunities. It has also led to an increase in product variance devised to meet the needs of the global customers who are varied in many ways, thus creating a complex web of supply chains in each region, which need to be monitored closely.
In order to enhance the supply chain efficiency, you need to ensure all the necessary data related to performance improvement are readily available, which will help gain visibility in the supply chain activities. Advanced analytics’ driven ‘control metrics’ would help monitor the real-time events and gain KPIs for the same through multiple touch points, thus giving complete control over the supply chain activities. You can combine these metrics with predictive analytics to get complete view of areas and parameters that can be optimized or improved. With supply chain visibility, you can make informed decisions towards optimizing costs, and minimizing customer impact.
This is the second challenge that most supply chains in organizations are facing. Each consumer has different needs, and these needs differ highly when they are located in different countries. Products are being created to meet the needs of this globally dispersed customer, which has led to demand volatility thus making demand & inventory management a humungous task and a massive challenge for the organizations. Some industries like retail, consumer goods, automotive etc. rely on real-time forecast generations to predict and perform at the market. Advanced analytics can help anticipate demand, and monitor supply & replenishment policies for better inventory management through the organization.
For customer centric organizations it is essential to optimize their service and plan the inventory flow. You can maximize your service levels, optimize investment decisions and augment supplier performance by using the historic data available. You can, with analytics, run simulations to avail the best possible solutions. You can include multi-criteria inventory ranking for better management with the advanced analytics.
Reduced Cost Fluctuations
Handling supply chain costs proves to be a major challenge, and it impacts financial metrics like working capital, cost of goods sold and cash flow. If you want to improve your organization’s financial performance, you need to reduce the cost fluctuations. Analytics helps handle the supply chain costs efficiently. Let’s see how advanced analytics helps control costs in the areas critical to supply chain.
Material Costs: You get the true total component cost for the products instead of just the price with the advanced analytics. You should have a complete view of the supply chain cost for the material so that you can optimize your purchase decisions. This will help managers in the organization reduce the material purchase for better negotiations and to optimize the supply chain, Logistics: There is a growing need to restrategize the logistics network owing to the fluctuating demand patterns. The analytics based planning will help towards route optimization, fleet sizing, load planning etc. which will help generate better ROI.
If you are planning to expand and explore into new markets, you should know the different risks that you are likely to face, and the costs that you will need to plan for. Advanced analytics’ will give you a clear picture of the demand, help you with supplier management, and get your costs optimized. With advanced analytics, you can base your decisions on the real-time data available with you regarding suppliers’, costs etc. The smart supply chain driven by data helps you offer better customer experience, which leads to customer satisfaction.