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5 ways Big Data is advancing supply chain management

September 29, 2016
Posted by James Hargraves

2016-09-29 19_32_23-13 onsite 5 ways Big Data is advancing supply chain management 20092016 [Rea

Acquiring information to power Big Data programs is relatively straightforward, however extracting value from this is much more difficult. Without effective analytics to uncover insights and provide context, Big Data becomes virtually useless in helping to improve Supply Chain Management operations and the service offered to your customers.

Despite this, when applied correctly, Big Data insights can be used to improve many processes– including the supply chain. Currently only 37% of companies have embedded Big Data analysis into their supply chain processes giving them a significant advantage over their less data-savvy rivals.

Here are five reasons why your organisation needs to adopt Big Data analytics sooner rather than later:

  1. Improves your supply chain visibility

By collecting data at every point of the supply chain, your business has more information available than ever before. The granularity allows you to identify and rectify bottlenecks as well as spotting issues that may cause costly delays in future.

Internet sensors provide huge levels of data automatically. Inventory counts, stock locations and other raw data can be generated using intelligent IoT sensors, providing supply chain managers with single item visibility in real time. When speed of business is a crucial differentiator, real time visibility of your supply chain is essential to improving your operations.

  1. Optimises inventory planning and performance

Real time supply chain visibility of your processes simplifies inventory management, order cycle planning and logistical arrangements. The genius of Big Data analysis is providing historical context for future planning. By drawing information from every part of your supply chain and the rest of the organisation it allows you to more accurately predict demand, and plan accordingly.

Big Data is particularly valuable for understanding and improving four supply chain aspects:

  1. Product flow-path optimisation
  2. Production footprint analysis
  3. Demand segmentation and inventory right-sizing
  4. Transportation route optimisation

Big Data allows you to better understand where and when you will need raw materials, and how best to deliver finished goods to your customers. For organisations in the middle of a digital transformation program, these insights allow you to create incremental, regular changes that continually improve supply chain performance.

  1. Enables issue management by exception

The application of Big Data empowers employees to take informed actions when minor issues are detected. With more information available, workers can deal with almost every operation and decision in an autonomous way – senior supply chain managers need only step in when key indicators fall outside pre-defined boundaries.

IoT and automation helps to further reduce the level of general administrative intervention in day-to-day processes too. The more hands-off supply chain management becomes, the more accurate and efficient the underlying processes become, in-turn allowing employees to devote more time to new strategic developments.

  1. Improves last mile delivery operations

A true Big Data program provides insight into every operation – including those outside the supply chain. It also provides a way to join unrelated data to learn more about your customers. Understanding individual clients allows you to design last mile operations tailored to their specific preferences. Merging third party data sources like geoanalytics make it possible to view the supply chain as far as the customer’s front door.

Experience is now one of the most significant factors in consumer purchasing decisions. 40% of customers started shopping with a competitor because they heard about the company’s good customer service. As the most ‘visible’ aspect of the supply chain, any improvement to last mile delivery operations will help retain existing customers and attract new ones too.

  1. Uncovers future business intelligence insights

All of your business operations change eventually, but historical performance data provides valuable insights for predicting future trends and demands. These future business intelligence insights allow you to make strategic decisions that will help you grow and improve the efficiency of supply chain management processes.

Big Data provides a mechanism by which you can see the big picture, analysing trends beyond the usual one-year window for instance. Taking a 5 or 10-year view of your data will reveal longer-term trends and provide opportunities to take advantage of them. SCM World found that 64% of supply chain executives consider big data analytics a disruptive and important technology, setting the foundation for long-term change management in their organisations; Big Data will be key to defining the future for enterprise-class businesses.

Supply chain management is increasingly data-driven. So it is logical that the organisations with the most data and the ability to analyse it, will be the ones with the highest performing supply chain. Therefore, Big Data will become crucial to supply chain success sooner rather than later.

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James Hargraves – Business Development Director, Adjuno
James is a supply chain process and visibility expert, and has worked for a variety of global 3PLs, focusing on delivering cost and administrative efficiencies to retail clients. He has previously worked in Australasia and Dubai and has been based in Hong Kong since 2010. James currently manages the Supply Chain team at Adjuno, working with our global retail customers to optimize their supply chains.