The introduction of data analytics has revolutionized how supply chain management works, making its application a hot trend in supply chain management. In fact, a study in 2014 showed that 17% of senior executives were adopting data analytics into their supply chain management, and right now close to 50% are doing so.
In this article, we look at four ways that supply chain management benefits from data analytics;
Relationship Between Supply Chain Management and Data Analytics
Supply chain management is the oversight of goods and services from their point of origin to the final consumer. Over the past few years the size and scope of the business has grown to the point that today, there are companies whose sole purpose is offering logistics and supply chain solutions.
With the growth of the business managing the supply chain became exceedingly difficult due to the overwhelming data generated by the large number of customers, delivery methods and many other new features.
This brought forth the need for data analysis. Data analysis processes the huge chunks of data created by the supply chain and converts it into information that can be used to properly manage the supply chain and improve the quality of the service
On that note, we can take a look at the benefits of data analytics in supply chain management
Production Plan Optimization
Arguably the greatest benefit of applying data analytics to supply chain management production plan optimization involves automating inventory stocking by predicting market trends to ascertain when to restock.
Data analytics tells businesses when they need to restock, how much to restock and where to send them. Its predictive nature also allows users to hedge against losses as data analytics would help you save costs and predict downtimes in business.
Inventory Cost Reduction – Product Quality
Data analytics can improve the general cost of doing business. A perfect example is in production and storage.
Due to the massive nature of the supply chain there are huge storage facilities making it difficult to keep track of goods stored there. Data analytics helps you keep track of the shelf life of goods ensuring product quality before they are sent out..
For instance some supply chains that are into pharmaceuticals and agriculture require goods to be stored in a particular temperature. Maximizing the use of data analytics in your supply chain means you can regulate the temperature of goods sectioning the storage of goods based on their temperature in order to maintain their product quality.
These practices help save costs and prevent losses that would have occurred as a result of spoilage or goods losing value due to product quality.
An Optimized Order Fulfillment Process
Customer satisfaction and business productivity is the main aim of supply chain management and one of the ways to accomplish this is through smooth order fulfillment. Companies looking to improve their delivery time create a better user experience for their customers are now applying data analytics in their supply chain.
Data analytics provides updated shipping information which can then be used to optimize shipping routes, dictating where to store items and the appropriate delivery routes.
Supply chain management has also introduced real-time tracking for goods and services, tracking the quality of goods throughout the supply chain process. This data is then analyzed to improve the overall supply chain process.
Data analytics also plays a part in maintaining the general health of machines utilized in the supply chain process. Allowing businesses to keep track of their machines helping them determine when to schedule routine maintenance or replacements. Preventing any downtime that would have occurred as a result of these machines breaking down.