Supply chain is a crucial business industry that faces numerous challenges daily. Business owners who are involved in the supply chain are dealing with goods storing issues, inventory and delivery management and tracking, logistics and customer service problems, and many more. And it is impossible to imagine how to overcome all these challenges without software that performs numerous tasks, optimizes many processes and unloads the employees.
When it comes to the digitalization of business, management tools considered to be very important, but we can say that analytics means no less. So let’s discover what supply chain analytics does, how it works and how to implement it into your business. We will also provide you the examples of some popular ready-made solutions and discuss whether they are really good for your business.
What is Supply Chain Analytics?
Supply chain analytics is a smart solution that is implemented into your business with the purpose of improving the services, developing more data-driven strategy, reducing operational costs, and making all supply chain processes more productive.
To emphasize the necessity and importance of supply chain analytics we’d like to point out some major challenges that it can help to overcome. So here is what this smart software can do for your business:
- Establish synchronization between your planning and real actions.
- Provide real-time analytics which helps to understand what your actual performance is.
- Help to better control your inventory and notice timely when you’re out of stock or have an excess of goods that are not selling.
- Make your company more flexible and profitable thanks to up-to-date reports that can uncover key productivity issues and let you fix them before they are too global.
- Improve forecasting accuracy thanks to holistic analysis of your inventory and sales.
- Optimize freight and logistics by improving loading and routing which also leads to better customer service and faster delivery.
Supply chain has always been related to mass data storage and generation and thanks to supply chain analytics it becomes possible to make sense of all that data and provide comprehensive reports. Supply chain analytics is a holistic business management tool able to uncover certain information patterns and generate insights that can influence your business decisions. It can be said that supply chain analytics has certain cognitive abilities that are powered by artificial intelligence (AI). So thanks to AI this software can perform analytics of the following 4 types:
You may be wondering whether your company really needs this software, because there are numerous other tools like CRM, ERP and EDI systems. That is a reasonable thought and we will explain why exactly supply chain analytics is so important. As we’ve already said, the supply chain is related to loads of data that is always accumulated somewhere.
However, one of the latest researches states that even if your company possesses a lot of internal data, you are likely to process and analyze only a quarter of it all if you do not have a special analyzing system. Which means that too many crucial figures and indexes get lost and are not being taken into account when you perform planning, forecasting and identification of your real performance rate. You may use the most effective CRMs and ERPs but if you do not have a supply chain analyzer, you will end up having inaccurate information related to your business. And that lack of knowledge may cost you a lot of money (that initially can be saved and invested into your company growth). That is why supply chain analytics is a must for any company!
Also speaking about supply chain analytics it is crucial to mention that it usually includes several visibility analytical indicators related to different stages of supply chain:
- Supply chain itself;
By monitoring each of those indicators carefully you may get a full picture of how your business is really doing, and what can be improved to make it even more effective on each stage. That is exactly what makes supply chain analytics a must have tool.
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What features any Supply Chain Analytics should have
Before you consider developing your own custom supply chain analytics tool, you need to collect information regarding the most crucial features that this software should have. Of course, more custom options can be incorporated into your system (depending on your particular business goals) but some basic features are mandatory. And here they are:
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Are there any ready-made solutions?
Before sharing with you the brightest examples of ready-made supply chain analytics systems, we’d like to emphasize that whatever solution you will select – you will have to adjust your business to use it. Why is that so? Simply because ready-made solutions are not flexible enough to fit into your particular business processes. They seem universal tools, but they may not be suitable for your working processes. So keep that in mind and better invest in custom solution made specifically for you business taking its needs and requirements into account. Custom approach always brings better results.
This is a well known cloud solution that offers a range of reporting and analytical tools to get the most up-to-date insights related to your supply chain, warehousing and customers’ demand. Thanks to this solution companies can focus more on the real indexes related to their performance and understand what can be adjusted to reach better performance rate and income. It also helps to automate communication of reports, insights and dashboards to get the fullest picture of company work.
Qlik if a solution which main goal is to help companies make data driven decisions based on real productivity indexes. This software lets you explore all factors that are influencing the productivity of your business, check in real time availability of products or place in inventory, manage supply chain from end to end connecting all processes, simplify analytics and make the received indexes and numbers understandable.
Main advantages of Supply Chain Analytics
The development of a smart supply chain analytics software is quite costly, because it is based on advanced technologies and has to be easily integrated into your business environment, however this solution is worth every dollar you spend on it. It offers numerous benefits that can really turn your supply chain to a whole new level.
Let’s take a closer look at the main advantages that supply chain analytics offers and maybe some of them will be a decision making point for you.
It helps to achieve revenue growth
A couple of years ago Gartner performed a survey in which they asked what is the top priority of companies. And 54% answered that it is business growth. Also when company owners were asked about the ROI, 29% answered that they achieved a much higher level of it by using analytic tools. Therefore it turned out that analytics is a crucial instrument that a company owner should definitely invest in to stay competitive and more productive. Analytics allows us to evaluate the whole picture of the company, control potential losses, and eliminate supply chain inefficiencies on time.
By excluding all unnecessary costs and improving planning, the company can become more profitable. It is even possible to monitor sales efficiency and prognose what income your supply chain will get by the end of a certain period.
Your business will have better margin
With the supply chain analytics you will be able to analyze all your company costs starting with the shipment and delivery and ending with network. The holistic analysis allows you to evaluate market dynamics, predict all possible upcoming changes, understand what processes should be improved and which costs can be reduced.
What does this lead to? First of all it leads to more smart buying decisions and as the result to a better margin of your business. If your company gets more revenue, then you can achieve more growth opportunities and partner up with more businesses.
You will improve warehousing and storage efficiency
While many goods may require special storage conditions, others may be special themselves. The goods can be fragile, have high weight or unusual shape. And you have to store them carefully to deliver them in their best possible condition to your customers. You may be wondering how exactly supply chain analytics can help you on the warehousing stage. And we will explain it right away. Thanks to this tool you can get info about storage space, shelves weight, temperature, picking accuracy, overall warehouse performance. And you will also be able to minimize the number of goods accidents when they are placed not on the right place and get damaged or improperly stored.
You will achieve better customer loyalty
Supply chain is a complex business niche that requires collection of data on different levels starting with warehousing and transportation and ending with feedbacks from real customers. And while it is quite easy to collect all that data, often the companies do not have tight tools to analyze it properly and use the collected data to their advantage. With supply chain analytics you will understand better what is in demand, what issues your supply chain has that prevent customers from being 100% satisfied with your company services.
To sum it up
Smart solutions are crucial for any business and supply chain is not an exception. Dealing with huge loads of information and numerous performance challenges daily, it is too risky to rely on approximate analytics. What every supply chain needs these days is reliable software able to process a lot of data and provide comprehensible reports and forecasts based on real figures. And that is exactly what supply chain analytics is for.
This is a costly solution, however it can easily pay itself off and help to boost your business by making it more profitable. There is no need to spend costs unwisely if you can make all processes more effective and keep the future of your business under control.
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