Harnessing the true power of data-driven insight is the holy grail of future business, writes Gary Keatings, VP of Solutions Design at DHL, and something everyone in the retail supply chain sector needs to understand.
A wealth of this data comes from the supply chain. But, while the information is there, companies are not yet capitalizing on its real value as a source of insight capable of shaping the future enterprise.
Most companies are awash with a potential gold mine of untapped supply chain information. And while this body of data runs the day-to-day flow of goods around the world, until now, it has remained largely underutilized for enterprise-level business insight and transformation. This outdated status-quo is soon set to change.
Companies are no longer restricted to running their business by looking in the rear-view mirror – i.e. managing based on information that is weeks or months old. Thanks to new technologies – combined with new management practices – organizations are starting to anticipate and even predict the future, to get ahead of their business and direct their global operations accordingly.
Capitalizing on these new technologies and on big data goes beyond the internal borders of the company, however. It also includes gathering, analyzing and incorporating external sources of information, both structured and unstructured. This incorporates everything from news feeds and weather predictions to social media. While supply chain analytics tools and technologies have come a long way in the last few years, integrating them into the enterprise is still far from easy. Companies typically progress through several stages of maturity as they adopt these technologies.
The first steps on this continuum are in place today at many global companies. This stage is known as the descriptive supply chain, whereby organizations use descriptive information and analytics systems to capture and present data in a way that helps managers understand what is happening. Descriptive analytics comprise business intelligence systems, such as supply chain dashboards and scorecards, and enables ad hoc queries. They also include data visualization and geographic mapping, which help tell a story with the data.
Utilizing these tools, companies can manage the day-to-day operation of their supply chain to become more agile and cost-effective. One of these tools is DHL’s Resilience360. The tool analyses supply chain and sales data to inform production schedules, marketing budgets, inventory positions and other key operations. This provides companies with information on when to back off in one area and ramp up in another.
These tools have been effective in helping companies cut costs and eliminate waste in their supply chains. But, leading corporations are rapidly moving beyond the descriptive phase and aggressively pursuing the next stage – the predictive supply chain. The predictive supply chain is an essential underpinning of a reimagined, predictive enterprise. But the bigger opportunity of the predictive supply chain lies in using the analytical output to inform the strategic direction of the entire enterprise. The supply chain touches or affects every area of the global organization and is steward to a wealth of information. It is the keeper of current and past performance and, with the help of new tools and smart analysts, may well be a determiner of future success.
The data within the supply chain, when used creatively and with appropriate analytics and interpretation, can provide invaluable information to the enterprise as a whole – far beyond the supply chain itself. Therefore, the task ahead for far-seeing companies is to apply predictive analysis to supply chain data, and use the results to attain measurable competitive advantage.
Those far-seeing organizations that have already adopted supply chain analytics in pursuit of a more predictive enterprise, report a high return on investment in multiple areas of the business. According to a study by Gartner, better analytics produced tangible benefits in areas of product quality, revenue, asset utilization, product launches, order cycle time and more. In today’s technology driven environment, companies can truly be seen as a gold mine of untapped supply chain data. Data can enable companies to have a true 360-degree cockpit view of their entire extended supply chain. This is not about having a better supply chain. This is about having a smarter enterprise.