Why Consider Supply Chain Analytics and how to identify the right solution?
Why should you consider supply chain analytics? What benefits can this bring to your organisation? Throughout this piece, we’ll look at the key advantages of arming your business with supply chain analytics and how they will benefit you. We’ll also discuss the best ways of choosing the right solution for your company.
Enjoy an impressive ROI
Using supply chain analytics is proven to help you increase your return on investment. One survey from Gartner in 2015 showed that 29% of businesses saw an impressive ROI after using analytics. For comparison, only 4% of the companies surveyed saw no ROI at all. This shows that it can be a worthwhile investment that only has a 4% chance of not yielding a return at all.
Improve planning & risk assessment
Supply chain analytics have the potential to help you plan with more accuracy than ever before. The whole premise of this technology allows you to take a detailed look at customer data. In doing so, it allows your business to identify patterns which help you forecast accurately. You can take this data and see which products should be put on the backburner as they’re not reeling in many orders, and which ones you have to get ready as they’re highly popular.
Consequently, you are better poised to make more informed decisions regarding all elements of your supply chain. By utilising analytics, your company can analyses warehouses, customer needs, partner responses, etc. If you understand how to make the right decisions relating to all of these areas, you can achieve a lean supply chain.
In turn, this also lets you become more accurate with your risk assessments. Using supply chain analytics lets you spot any potential risks in the future. Again, this is done by looking at the data and analysing all the trends and patterns throughout your supply chain.
Get set up for the future
The third benefit is a simple one: get prepared for the future of supply chains. Businesses have already started utilising supply chain analytics into their daily practices. As a result, we’ve seen dramatic developments in this area, particularly with the incorporation of AI in the supply chain. New technologies like this will further enhance the benefits seen by businesses, allowing for more functionality, greater analysis, and an even better ROI.
Thus, by considering supply chain analytics now, your business can prepare for these future technologies. Instead of waiting for new things to come out, you can get set up with a system today. Then, all the future benefits will come to your business now, and it will also be easier to adapt when new technology comes in.
Improve business-critical strategies
The more you look at supply chain analytics, the more crucial it is. One of the key purposes of this technology is to improve business-critical strategies. This includes key areas like:
- Various customer service processes
- Supply chain planning
- Logistics/transportation management
By having access to the latest analytics technology, you can take a deep dive into these vital areas of your business. You have the chance to extract data from lots of different sources to quickly analyse things and figure out how to improve each individual process. It lets you operate a more dynamic supply chain where changes are made almost instantly to ensure you’re operating at peak efficiency.
In fact, a recent survey by Peerless Research Group (PRG) and sponsored by Logility, Inc. has shown that there are a few key areas that business owners want to use supply chain analytics for:
- 63% use it for supply chain planning and forecasting
- 61% for logistics and transportation management
- 58% to improve customer service
Those are the top three results, and you can download the full report here to see more of the data collected. You can see this report backs up the point made above in that business owners clearly feel analytics improve those key areas of business.
So, this is something you should adopt in your business if you want to see all of the benefits listed above. The big question is how do you find a supply chain analytics solution that will work for your business. There are lots of options out there, and some are far better than others. As such, the second half of this guide will look at two key things:
- Key features of effective supply chain analytics
- Key questions to ask before choosing your solution
The key features of effective supply chain analytics
To identify the top features, it’s pretty easy. We can look at IDC’s Simon Ellis in The Thinking Supply Chain, where he pinpoints five key things for these solutions:
- Cognitively enabled
Essentially, a good supply chain analytics solution will hold all of these characteristics. It will allow access to unstructured data from various different sources, keeping you connected. There will also be improved collaboration to let you interact with suppliers and other aspects of your supply chain. The cyber-aware supply chain is secure and set-up to handle hackers and other cybersecurity threats. Cybercrimes are on the rise, so this is one of the most integral features for your analytics solution! A cognitively enabled supply chain uses AI to understand things in more detail and can make decisions without your input. As you can imagine, this greatly improves the efficiency as you don’t have to constantly keep an eye on the system. Lastly, a comprehensive solution can be scaled with data in real-time and provide detailed/comprehensive insights.
Key questions to ask before selecting an analytics solution
The best solutions will all contain the five C’s listed above. However, there are still some crucial questions you need to ask before you make your decision. First, we’ll list the questions so you can see exactly what they are. From here, we’ll talk about them in more detail to explain why you need to ask them and what purpose they serve.
- Does the vendor understand your key requirements?
- Does the solution provide everything you need in one package?
- How is the data presented and prepared for users?
- Will the solution work with all of your data sources?
- Does the system provide you with ‘clean’ data?
- How fast is the data delivered to you?
- How much support do you receive afterwards?
- How easy is it to leverage the solution?
- Is it future proof?
Does the vendor understand your key requirements? Essentially, do they know why you need this solution and what you’re looking for from it? If they don’t, you’ll end up with something that might not work for you. Be sure you’re on the same page before agreeing to anything.
Does the solution provide everything you need in one package? Ideally, you want to avoid a system that misses out key elements. This will mean you have to download and purchase other solutions to support it, wasting a lot of money.
How is the data presented and prepared for users? Does the solution provide different options for receiving and sending data? This includes emails, a portal people can log into, mobile apps, and so on. Realistically, you want multiple options so users can access data however they want.
Will the solution work with all of your data sources? Your business has lots of different data sources. Therefore, you need a solution that works with all of them. If it doesn’t, you’re left to find a solution that also covers the other data sources. Again, this is costly and unnecessary!
Does the system provide you with ‘clean’ data? More specifically, does it get rid of the garbage or useless data? You need a solution with a good system for ‘cleaning’ data and presenting you with items that are actually useful to your business.
How fast is the data delivered to you? You need actionable data ASAP to learn about patterns and to make adjustments throughout your supply chain. So, the speed with which data is delivered matters a huge deal. If it’s too slow, you lose the ability to take swift action.
How much support do you receive afterwards? The best supplies will sell you a software solution that comes with ongoing maintenance and support. This is essential when it comes to value for money, and also to ensure fast action if any issues appear. Sadly, some suppliers are Software Suppliers in Name Only (SSINO). In essence, they sell you the software with no support at all. Then, they charge extra to sell extra solutions that support the original model. Avoid this! You want a supplier that provides continuous support.
How easy is it to leverage the solution? In essence, how easy will it be to bring this solution to your company? Do you have enough employees that are skilled enough to use it? If not, you may have to consider outsourcing. This is a key thing to consider as you may figure out that a solution seems amazing, but is too hard to leverage. In turn, this makes it far too expensive when factoring in additional training/onboarding/outsourcing.
Is it future proof? The last question is a simple one; is the solution set up for the future? Is there room for updates, does it contain AI and other new technologies? It goes without saying that you require a solution that is built for the future, not just for today.
Supply chain analytics should be a fundamental part of your organisation. It’s clear there are many benefits, with the overall one being that it improves your ability to understand data. This can help you save money, make more money, and provide a better service.
If you’re looking for supply chain analytics solutions, be sure you look for the 5 C’s and ask yourself all nine of the questions listed earlier. This will help you find a supplier that offers a great product to aid your business.