Data is the cornerstone of every business and an important decision-making tool, especially to streamline the supply chain. Here, we’ll discuss the need for supply chain analytics and whether you should opt for an in-house team or pay for an analytical platform.
The supply chain is vital for a manufacturing business and affects brand visibility and customer experience. Managing the supply chain is essential to streamlining your business operations and taking the products to customers at the right time. However, enterprises can no longer rely on outdated technologies and methods to handle modern-day problems. For example that’s well known, the COVID-19 pandemic led to severe supply chain disruptions around the globe.
Such challenges can be overcome by adopting data-driven strategies and solutions to effectively manage the supply chain. Many businesses ask the same question – is business analytics good for supply chain management?
Yes! Absolutely. In fact, supply chain analytics is a perfect solution to clear the various roadblocks that affect your success in competitive markets. A McKinsey report shows that an average supply chain has been digitalized by 43%. It indicates that many enterprises are quickly adopting analytics and business intelligence solutions to digitally transform their supply chains and make data-driven decisions. Similarly, the global supply chain analytics market is expected to touch $9925.25 million by 2027.
So, how should you implement supply chain analytics in your business? What is the best way to increase supply chain efficiency? Does the in-house analytics team have an advantage over using an analytical platform? Let’s find out in this blog.
Data analytics is a crucial part of supply chain management and has a diverse role. It helps optimize procurement, inventory, production, logistics, and costs. Supply chain analytics unlocks the potential of your raw business data to seamlessly navigate the complexities of supply chains. By analyzing the supply chain data, you can predict future demand, determine production quantities, and proactively address disruptions to minimize losses. It is helpful for the following:
You can achieve your goals by building an in-house supply chain management team that uses data analytics and business intelligence to make data-driven decisions and contingency plans.
When following proven strategies to improve supply chain efficiency using analytics, you should choose between an analytics platform and an in-house team. While the cost of a supply chain analytics platform is convenient, you will get higher ROI in the long term by working with expert partners.
For example, when you invest in an in-house team, you can work with experienced service providers with access to the latest technologies. You can benefit more from the end-to-end solutions offered by the staffing and managed service providers. They take care of building the model, deploying it, and integrating it with your existing systems, along with long-term maintenance, support, and upgrades.
Have a strategy in place before you make changes to your business processes. Create a comprehensive supply chain management strategy to determine the core areas for improvement. This gives you a better understanding to choose the analytics team and platform and the best method to adopt the data-driven models and digitalization tools in your business.
Experts are in high demand because they know how to get the job done and deliver the expected results despite the challenges. Even if you plan to customize a supply chain analytics platform and embed the dashboards, you need an in-house team to streamline the process and train your employees to use the insights. It is easier when you partner with a service provider to hire a team that will work with your business for as long as you want.
Suppliers are a key element of your supply chain. Maintaining a good relationship with them will ensure better prices, fewer delays, and exceptional service. The supplier will be willing to the extra mile when you have a strong relationship with them. However, it is equally important to choose the right supplier before you strengthen your relationship. Analytics help in identifying worthy suppliers to add to your network.
An advantage of in-house analytics is the ease of customizing the systems and automating the processes. The experts can make the necessary changes to accommodate third-party integrations that can increase efficiency, reduce the risk of errors, and handle supply chain velocity at any given time. Be it invoicing, labeling, shipping, or order processing, various tasks can be automated using artificial intelligence tools.
Increasing transparency and visibility can make your supply chains more efficient. It allows you to make accurate and proactive decisions based on reliable and real-time data insights. For example, you can ask the production team to increase or decrease production based on the inventory levels and market demand. This helps avoid stockouts and eliminates the chances of paying additional carrying costs due to logistics issues.
Technology is necessary to simultaneously handle numerous processes. However, choosing the right technology is essential to achieve your goals. What kind of inventory management software do you need? What features should the supply chain management software provide? Are the various tools compatible with your databases? Do you want to invest in multiple tools from different vendors or rely on an in-house team that builds the necessary data pipelines to streamline the workflows?
Sustainability is the theme of the season. Governments and customers are looking at promoting businesses with sustainable and green practices. How can you minimize your carbon footprint and implement sustainable supply chain practices in your business? Here, you will benefit from the expertise of an in-house team that works on your project and understands your business requirements.
Improving your supply chain efficiency is not a one-time process. It requires continuous monitoring to identify weak areas and make the necessary changes. The expert team can set up automated monitoring to track the inventory turnover rate, shipping time, order fulfillment, warehouse capacity, return ratio, etc., and use the insights to offer suggestions to promote greater supply chain performance.
Supply chain management is the process of coordinating the various steps, stages, and parties involved in sourcing the raw materials and delivering the finished products to customers. Procurement, production planning, inventory and warehouse management, logistics, and customer service are a part of supply chain management. Supply chain management software is used to save time and manage the different aspects effectively.
Supply chain analytics is the use of statistics, mathematics, and data to optimize the supply chain’s performance and improve its overall efficiency. Large datasets are analyzed to detect patterns and trends and to derive actionable insights. These help in reducing costs, increasing production, forecasting market demand, managing inventory and optimizing transportation. Analytics are useful to make informed business decisions and increase your revenue.
Historical data is analyzed to describe the events that have already happened and identify patterns and trends.
Future events are predicted based on historical data. AI in the supply chain plays a vital role in predictive analytics and helps predict market demands.
This goes beyond predictive analytics and helps find solutions to supply chain challenges like inventory management, logistics, etc.
Large amounts of complex and unstructured data are analyzed using AI and ML tools to derive real-time insights.
Different types of analytics platforms are available to process supply chain data and derive meaningful insights. However, you can achieve better results by working with an in-house team that customizes the analytical solutions exclusively for your business needs.
Achieving supply chain efficiency is not without a few challenges, such as the following:
These challenges can be overcome by hiring experts to manage the supply chain from end to end using analytics and business intelligence.
Using analytics can positively impact the future of the supply chain of your business and increase revenue. The following are some important benefits of supply chain analytics:
Supply chain analytics is the core of modern-day supply chain management. It is necessary to gain a competitive edge and tackle market volatility without incurring losses. It also increases ROI and customer satisfaction.
When the question arises about in-house vs. outsourced supply chain analytics, we recommend partnering with an in-house team to build and customize your data analytical models to suit your business requirements. It is a much preferable long-term solution to become an industry leader.
Fact checked by –
Akansha Rani ~ Content Creator & Copy Writer
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