The supply chain management comprises of a complicated network of various stakeholders, activities, and processes. It ranges from sourcing, procurement, production, and inventory to delivering to the end consumers with a focus on optimizing the business processes to gain a competitive edge. Today, we’ll discuss business analytics in supply chain management; its definition, how to launch and implement it, and its key benefits.
What is Business Analytics in Supply Chain Management?
Business analytics in supply chain management is the method of employing quantitative analysis, statistical methods, and data to gain insight into the SC operations of the company. It comprises gathering a plethora of information from various sources like SC activities, social media interactions, and customer transactions. However, the objective of BA is to convert and transform raw data into useful information that would help you to make right decisions.
BA in SCM helps companies in the following ways;
- Recognizing opportunities and risk factors
- Consumer behavior trends
- KPIs
- Gaining a real-time insight
- Making data-driven decisions
- Optimized SC operations
- Improved processes
- Analyzing production efficiency
- Demand forecasting
- Tracking inventory level
The SCM business analytical tools decrease the risk factor relevant to overstocking of stockouts of goods. Real-time data analysis helps companies to make adjustments in their strategies relevant to the market trends.
However, BA allows companies to analyze the performance of their suppliers with quality standards and delivery time metrics and tools. This information would help you when you are analyzing suppliers and their impact on the overall SCM process. If you are employing BA for SCM activities like demand forecasting and procurement, then it allows you to make efficient decisions.
Launching Business Analytics for SCM Strategy
Some of the main steps on how to implement business analytics in SCM are as follows;
Recognizing Data Availability
If you are implementing business analytics for your SCM strategy, then it begins with recognizing the available data you have. It comprises both internal data like inventory levels and sales history; and external data like economic trends and weather patterns.
Metrics
After recognizing the relevant and suitable data sourcing, it is significant to find the metrics that are relevant and align with your company’s goals and objectives. For instance, if your business has got a limited time, then analyzing the performance of suppliers is critical.
Software & Tools
You should beware of the tools and software that would help you to effectively analyze and process the information. There are various tools and software solutions available in the market that would help you from predicting demands to finding the optimized transportation routes.
Training or Hiring Consultants
It is significant to keep in mind that the effective implementation of the tools would need SCM software expertise. You should consider providing training to your employees or hiring an outside consultancy firm to guide you on how to employ the tech tools.
Benefits of Business Analytics in SCM
Some of the main benefits and advantages of business analytics in supply chain management are as follows;
Demand Forecasting
BA studies the company’s historical record and find patterns and trends in the data from time to time. It helps them to know the required quantity of data the company needs, the demanded items, and how to develop the orders. However, it offers you an insight into the type of products the customers would buy and helps you to plan the availability of stock accordingly; employs the right channel for the smooth delivery of products.
Tracking Inventory
If a company has a large network of stores and a mass volume of products in the warehouse, then it requires effective evaluation of stocks. The BA system would make sure that you should upload the data in real-time, and it tells you when you move the products. You could track the entry and exit point of goods from the production point to the delivery of goods. It informs you of the items that are running low and when you should order for restock.
Improved Logistics
Many businesses and companies want smooth shipment, product replacement, and delivery processes. BA allows companies to track shipments and improve logistical processes. It would guide you in choosing the best route for delivery, making sure sufficient employees are for the job, and forecasting future shipment needs.
Low Wastage & Cost
BA and other tech tools would help you to analyze various areas of your SC operations and functions. It analyzes inventory and shipment and gathers data in real-time. However, the analytical tools help you to recognize the cost-efficient measures and decrease the wastage of resources. The company would make the right decisions and amplify productivity and precision.
Real-time Solution
The BA allows you to have a thorough comprehension of your SC operations and processes at the ground level. It guides you to resolve various issues immediately as they appear by cross-checking from other areas. However, if there is a problem with the shipment, then it allows you to quickly respond to the problem without any delays.
Conclusion: Business Analytics in Supply Chain Management
After an in-depth study of business analytics in supply chain management; we have realized that BA is highly significant for resolving and comprehending complicated processes. If you are learning about BA in SCM, then you should keep in mind the abovementioned benefits, and elements, and how to implement them for the SCM strategy.
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