SCM Analytics 

Supply chain analytical tools and analysis play a significant role in the operations and functions of modern businesses and companies. They allow you to support, improve, and manage SC operations and functions at the optimum level. With the growth of the supply chain and distribution network, data starts coming from various sources, and that’s where the role of data professionals and analytical tools comes into play. Today, we’ll discuss SCM analytics; its various types, advantages, and disadvantages.

What is SCM Analytics? 

SCM analytics is a method of employing various analytical tools to analyze data and processes from various sources and systems to have a key insight into the distribution, process, and procurement of products and goods. When you collect data from ERP (enterprise resource planning) and SCM (supply chain management) software; then it gives you broader insight and a comprehensive view of your logistics network by helping you to predict and improve performance.

How SCM Analytics Work


Data sourcing from the operational system helps you to deal with various stages in the SC process like transportation, order fulfillment, warehousing, and inventory orders. It also comprises collecting data from 3rd party merchants, carriers, suppliers, and vendors.


It comprises integrating, transforming, or extracting data from the repository like a data lake or data warehouse. The data repository is usually the cloud database. However, the extracted data offers you a comprehensive view or key insight into your logistics network.

Analytical Tools

The SC analytical tools would help you to utilize your data and conduct various forms of analysis on the data. For instance, you should employ supply chain forecasting and predictive analytical tools to project returns; it helps you to estimate outstanding inventors.


The tools and applications you are employing would help you to develop interesting dashboards and visualizations. They help you to have a key insight and recognize patterns in KPIs (key performance indicators) like the following;

  • Transit times
  • Ideal versus existing inventory distribution
  • Fulfillment performance


Some of the main tools and applications that would help you to take advantage of augmented analytical capabilities like following;

  • Prescriptive analytics
  • Predictive analytics
  • Automated machine learning


The results you gather from the key insight would help you to take actions or trigger action or alert in the other systems.

Types of SCM Analytics 

Some of the main types of supply chain management analytics are as follows;

Cognitive Analytics

The cognitive type employs advanced analytical strategies and methods to process the mass quantity of data and extract valuable insight and results from it. Many logistics professionals and experts comprehend and deal with routine supply chain data.

Prescriptive Analytics

The prescriptive type employs data to outline the best course of action to amplify optimized operational efficiency and inventory management. Many logistics professionals and experts employ a prescriptive analytical approach to develop a solution they require to deal with the potential problems they have recognized by employing predictive and prescriptive analytical strategies.

Predictive Analytics

The predictive type employs data to forecast future results like predicting possible maintenance needs and requirements or future demand. Many logistics experts and professionals employ predictive strategies to develop statistical demands that would help them to be ready for potential future events. They could be like global disruptions and demand fluctuations.

Diagnostic Analytics

The diagnostic type employs data to diagnose potential SC problems like targeted sales not outlined or delayed shipment. Many logistics experts and professionals employ a diagnostic approach to comprehend the reasons why particular relationships, patterns, and trends exist within the data. You could also comprehend various contributing factors.

Descriptive Analytics

The descriptive type employs data to outline relationships, patterns, and trends like warehouse inventory level or supply chain performance. Many logistics experts and professionals employ a descriptive analytical approach to comprehend how SC and its various elements are performing.

Advantages of SCM Analytics 

Some of the main benefits and advantages of supply chain analytics are as follows;


The analytical capabilities of the supply chain tools scale and analyze the data in real-time. It offers you quick and comprehensive insight; the delayed results from the SC aren’t acceptable for future growth.

Cognitive Capability

Modern AI tools and applications have become the control tower of supply chain processes by developing coordination, making decisions, and implementing decisions across the chain. Many of the AI supply chain processes are self-learning and automated.

Cyber Aware

The supply chain tools and applications strengthen and protect their system from external cyber hacks and intrusion. It is the main concern of the entire organization.


Supply chain analytical tools develop coordination and collaboration with suppliers and vendors. It means that they employ engagement, multi-enterprise engagement, and cloud-based commerce networks and platforms.


It allows you to access the unstructured data and records from social media platforms; establish traditional data from the B2B integration and traditional ERP tools; structured data from the IoT (internet of Things).

Disadvantages of SCM Analytics 

Some of the main challenges and disadvantages of SCM analytics are as follows;

  • Supply chain analytical tools have got limited clarity and it decreases the implementation rate
  • Limited skill or talent required to employ and comprehend SC analytical tools
  • Some organizations have got a strong database foundation that you can scale, and they require you to develop such analytical tools that would rightly represent the SC processes

Conclusion: SCM Analytics 

After an in-depth study of the SCM analytics; we have realized that supply chain analytical tools and methods are highly significant for your company’s growth. If you are learning about SCM analytical tools, then you should keep in mind the abovementioned elements, advantages, and disadvantages.

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