The Supply Chain Data Revolution

 OP DURABLEBy Guy Amisano Sr.

As the supply chain becomes more complex, the amount of data collected at each level continues to grow. More and more companies are investing in platforms and tools to help them utilize this data in order to continuously improve processes and make smarter business decisions. In fact, a recent SCM World review showed 64 percent of professionals from every level of the supply chain are prioritizing big data analytics as an important technology for long-term growth.

 

With these new tools coming into play, there are countless opportunities for data and business analytics to maximize the supply chain. From manufacturers to distributors to retailers and more, this technology is being used to drive innovative efficiency and accuracy, allowing the various levels of the supply chain to reach new levels of optimization. Here are three key ways data is revolutionizing the supply chain.

Balancing a demand-driven inventory: One of the biggest issues facing companies across a supply chain is finding a smart balance between supply and demand. While this equilibrium had previously depended on an individual ’s analysis and interpretation of the numbers, big data tools are now taking the guesswork out of the process. By incorporating figures from both sales and inventory, while also layering in additional relevant business information – including geospatial, seasonal and census data – businesses can accurately balance their stock to meet market demands.

Making smarter purchasing and trading decisions: Supply chain professionals can also use data analysis to gain a clear view of product flows – from the supplier all the way down to the consumer. This means getting a first-hand look at inventory turnover ratios, which ultimately help these businesses efficiently work together to reduce out-of-stocks and minimize costs.

Beyond this, the supply chain will also have the ability to gain a deeper understanding of performance by SKU, helping them to better determine profits and losses. In other words, businesses can analyze pricing and variances data, as well as history by SKU and overall performance of products. Leveraging this information will offer detailed, all-inclusive insight on how to be smarter about where a business is spending money, and the impact it will have on its bottom line. By leveraging data from every individual product, each business can make smarter purchasing and trading decisions – in the end, this helps the entire supply chain run more efficiently.

Strategically aligning business processes with partners: When a business leverages its data to improve processes or operations, it doesn’t simply help that individual company. This same data can be utilized to guide decision-making across the entirety of the supply chain. Specifically, by incorporating historical transaction data, companies can gain a better understanding of past performance and use these insights to more strategically manage and optimize future decisions.

As an example, if a retailer spots an opportunity to improve inventory turns and reports this to its distributor, both parties will enhance overall performance and, in turn, positively impact their operations and bottom lines. In the end, utilizing data analytics can provide an immense opportunity to develop mutually beneficial relationships between different players in the supply chain.

Today’s businesses are constantly looking for new ways to optimize operations and grow bottom lines. With most companies already collecting data and taking advantage of tools to improve their own performance, therein lies a massive opportunity for greater intelligence across the supply chain. The previous examples only scratch the surface of the ways data analysis is helping supply chain management and overall efficiency today. As data collection and the technology that analyzes it continues to develop and advance, these benefits will only become more valuable.

Guy Amisano Sr. is the founder and CEO of Salient Management Company, a provider of performance management solutions with experience developing industry-specific strategies for businesses in retail and wholesale distribution markets.

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