5 Things You Need To Know About Supply Chain Analytics

To get the most out of your supply chain, you are going to need to use a couple of analytical tactics to gain insight, save money, and improve supplier relationships. Some time back, purchasers only needed to concern themselves with reduced costs in supply chains when evaluating potential suppliers. Today, there’s more to consider, meaning that supply chain analysis is far more involved than it used to be.

Such key market drivers as the need to deliver enhanced financial value, mitigate risk, and deal with regulation and turbulent business environments means that companies now need to gather better supplier information.

Most of the activities that are related to transactions – like contract management, sourcing, and spend analysis – are no longer viable metrics in supply chain analysis and management. Instead, companies need to perform more complete analysis and gather insights into a broader range of the activities related to suppliers.

Today, therefore, the focus is shifting to innovative social enterprise collaboration, improvements in relationship management, financial and commercial risk analysis, and supplier intelligence.

Through big data analytics, companies can increase their understanding of supply chains while gaining deep insight into the mainstream supply chain. Supply chain organizations, in the same way, can leverage big data to improve their responses to volatile supply chain risks and demands, all the while reducing arising concerns.

The criteria are, of course, deep and broad. In the following segment, you will find an outline of the key things you need to know about supply chain analytics and how to approach supplier management:

  1. Supply Chain Prediction and Efficiency

Dissatisfied customers generally refuse to deal with brands that failed to effectively meet their expectations. This is the age of the client. As such, it follows that businesses must focus on offering the right solutions, products, and services to the right people at the right place and time. By so doing, they will be better placed to gain customer loyalty and satisfaction, and retain it.

Smart organizations, therefore, will leverage supply chain analytics and big data. By so doing, they will get a more wholesome view of their target customer. This will allow them to better predict the target needs and understand personal preferences. Ultimately, they will be able to create that unique brand experience that the target client is looking for.

Spend analysis, cost reduction, and cost efficiency are top business priorities within the supply chain management paradigm. By embedding big data analytics within the operations segment of a business, companies can improve the efficiency of their supply chains.

  1. Supplier Information Management (SIM)

Through SIM, companies can gather, identify, and maintain a range of knowledge on their suppliers. This information is typically operational and financial. It is also related to a company’s compliance and CSR. It is also effective for streamlining supplier processes and for communication purposes.

However, you need to understand that Supplier Information Management goes over and beyond the parameters of financial and transactional data. Today, it provides intelligence and greater visibility on suppliers.

The information you require will depend on the category of your business, the value of your suppliers, and the levels of potential collaboration and spend. To this end, it is impossible to make smart, effective decisions about your suppliers unless you have adequate information on all of them.

By investing in SIM, therefore, you will enjoy greater risk mitigation, an improved ability to leverage supplier relationships, and raised visibility. All of these will prove useful by providing you with competitive gains.

  1. Supplier Risk Management

Through Supplier Risk Management, your organization can effectively assess and manage all identified risks in your supply chains. As such, it is prudent given the complexity of the supply chain and its increasingly global nature.

The easier you are able to use supply chain analytics to identify and mitigate risk, the better you will be empowered to protect your own business interests and move on to a less risk supplier relationship.

  1. Social Responsibility and Sustainability

These two are fairly new while considering the supply chain. In this instance, sustainability refers to the ability to meet present demands without necessarily compromising the ability to do the same in the future.

As such, sustainability within the supply chain goes over and beyond waste management. Today, it extends into compliance to set standards, financial responsibility, and risk mitigation.

On the other hand, social responsibility covers corporate procedures and policies. The behaviors resulting from such benefit the individual, the workplace, the community, and the organizations. These benefits extend to health, safety, human rights, ethics, and the environment – among others.

Through supply chain analytics, your organizations can be able to clearly identify those suppliers that are socially responsible and whose practices are sustainable.

  1. Supplier Relationship Management

Through Supplier Relationship Management, organizations are better able to capture greater value, improve performance, and enjoy the benefits of a properly managed supply chain. All of these are achieved through greater collaboration and less confrontation.

SRM is highly systematic and deliberate in adding post-contract value. It is also easily achievable when organizations and suppliers collaborate more for the collective profit of both.

By practicing Supplier Relationship Management, organizations and those charged with performing supply chain analytics, will be concerned about what transpires in the post-contract stage.

This is why SRM is almost always the final step within category management. When handled effectively, organizations will be able to see the attainable savings they can reap from their supplier relationships.

Concluding Thoughts

Analytics as a field is exciting. This is why it has been attracting great attention and making a great impact on every type of organization and business. Although most people associate supply chain analytics with large high-tech companies, this is not necessarily true. In fact, companies that overlook it will soon be at a disadvantage. Others will also be left completely behind.

To ensure this does not happen to your organization, therefore, you should learn the 5 lessons outlined above. By so doing, you will have a solid framework to help you think more clearly about supply chain analytics. You’ll also get an effective starting point from which to conduct quantifiable research. Luckily, there’s a wealth of online resources and books about big data and analysis, as well as open source software and commercial tools. Use them to get started with supply chain analytics.

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