BENEFITS OF A DATA DRIVEN SUPPLY CHAIN
Supply chains are lucrative platforms for gaining a competitive advantage. This is because of two reasons which include their complexity and their role in defining the cost structure of a company. With the growing data complexity, most companies are finding it difficult to model their trade-offs of growth and supply chain cycles such as the procurement process. This is where supply chain analytics can help.
By leveraging supply chain analytics solutions, companies can fine-tune their entire supply chain network in ways that was probably not possible in the past. Supply chain analytics can help in effective supply chain management and identification of inefficiencies in supply chain configurations. It has the potential to improve the end-to-end performance of the supply chain in terms of financial, operational as well as managerial aspects. Therefore, it is high time that companies realize the potential of supply chain analytics in a real sense.
The growing complexity and globalization have put supply chains into the limelight like never before.
At Quantzig, we understand the difference that supply chain analytics can create in the supply chain operations of a company. And to help companies deal with the logistics and transportation challenges as well as improve the supply chain strategy, our team of experts has highlighted a few major benefits of supply chain analytics that can act as a guide for companies to understand market volatility, the impact of indirect supply chain cost and improve ROI.
Looking to improve efficiency across the supply chain but wondering where to start? Get in touch with our experts.
Benefits of Supply Chain Analytics
Gain a significant ROI
Supply chain analytics has the ability to analyze the structured as well as unstructured data. The insights gained from such data can help companies to respond quickly to customers’ demand maintaining integrity and accuracy.
Understand the risks better
Supply chain analytics can help in identifying the known and unknown risks. Also, it can assist in predicting future risks by identifying trends and patterns across the supply chain.
Improve accuracy in planning
By analyzing customer data thoroughly, supply chain analytics can help businesses to precisely predict future demand. Also, it guides an organization in decision-making regarding production by analyzing customer demand and market trends.
Achieve the lean supply chain
Supply chain analytics can be used by companies to monitor the responses of stakeholders, warehouse, and customer needs for data-driven decisions.
Prepare for the future
Companies are leveraging advanced analytics for supply chain management. Advanced analytics has the potential to process both unstructured and structured data to offer organizations a competitive edge. Also, it sends timely alerts that facilitates better decision making. Furthermore, supply chain analytics can establish a correlation among different sources and minimize risks.
5 C’s of Supply Chain Analytics
Supply chain analytics makes unstructured data from various social media platform and structured data from the Internet of Things (IoT) accessible.
Supply chain analytics enhances collaboration with suppliers across the entire supply chain through cloud-based commerce networks.
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Using analytics in the supply chain also ensures the security of the supply chain from cyber hacks and intrusions.
Using analytics in the supply chain improves the capability of the supply chain through automation. It helps in coordinating, collating, and conducting decisions across the entire supply chain.
Supply chain analytics offers comprehensive and fast insights in real-time as latency is something that is not acceptable in the future supply chain.
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“Increasing globalization and complexity have put supply chains in the spotlight like never before.”
Economies around the world are stepping back from the financial brink and have begun adjusting to a new normal, however, at the height of the downturn companies face a different set of supply chain challenges than they did. Some of these supply chain challenges include rising pressure from global competition, increasingly complex patterns of customer demand, and consumer expectations. In this blog discuss some of the biggest supply chain management challenges. The experts from Quantzig have curated some of the key benefits of supply chain analytics in overcoming these challenges.
What are the key supply chain challenges?
Supply chain management primarily revolves around ensuring that the right product in the right quantity reaches the right place and the right time. As much as this might sound simple, this can indeed prove to be a complex task.
The rising energy/fuel and freight costs are putting supply chain managers under extreme pressure to manage their operating costs. The greater number of global customers, technology, labor rates, and rising commodity prices tend to become more expensive.
Planning & risk management
Staying efficient and effective in today’s highly competitive marketplace is no easy task. It requires periodic assessments and redesigns to stay in the game. These adjustments are in response to changes in the market including new product launches, global sourcing, credit availability, and the need to protect intellectual property. These risks must be identified and quantified in order to control and mitigate.
Supplier/partner relationship management
It is important to create, understand, and follow standards that are mutually agreed upon in order to better understand current performance and opportunities for improvement. Having two different methods for measuring and communicating performance and results in the wastage of time and effort.
It is becoming increasingly difficult to find talent that is qualified and interested. Supply chain managers need an extensive understanding of the key competencies and duties that are quintessential for effective supply chain management roles and the ability to efficiently source specific skill sets and methods for developing future leaders.
Supply chain integration refers to the use of shared management information systems for closely aligning and coordinating activities within a supply chain. More and more companies are now looking at adopting supply chain integration to keep up with slimming margins, increasing competition, and a decreasing amount of differentiation between brands. Integrated supply chain solutions help companies to compete better on cost, by eliminating wasted time and materials. They also allow for shorter life cycles by having fewer links in the supply chain from back to front, and tighter coordination between delivery, warehousing, and transportation.
Key benefits of supply chain integration
Better demand prediction
supply chain integration solutions help companies to better predict customer demand and align their strategies accordingly. Organizations that have a global supply chain must be capable of accommodating shorter product life cycles, emerging markets, and fluctuating economies. Having an integrated supply chain ensures that the business is adequately responding to the changes in demand and other market trends.
This is one of the key perks that companies gain by adopting supply chain integration. Flexibility is the end result of integrating all of a business’s functions. It acts as a catalyst for the management to gain operational flexibility and respond rapidly to external events, including the actions of competitors and changes in customer demands. It also helps organizations to gather intelligence through their supply chains, allowing them to be aware of what their competitors are up to and plan their strategies accordingly.
Elimination of wastage
Organizations often face difficulty in successfully maintaining a sustainable supply chain. However, companies can overcome this problem by incorporating lean practices which help identify and eliminate waste in the supply chain. This also helps them gain increased agility which allows organizations to respond effectively to unpredictability. So, it is ideal for companies to have a combination of agile and lean supply chain practices. In order to ensure that the supply chain is sustainable and successful in the long term, it is advisable for businesses to integrate data from across operations in the organization.
Higher profit margin
When the supply chain of a company functions smoothly, it’s easier for them to maintain and even increase their revenue, resulting in higher profit margins. Companies can ensure an innovative and collaborative supply chain by using product and portfolio management software and SCM solutions. This will help them produce and deliver products at a much faster, more successful rate, consequently resulting in higher profit margins.
Know more about Quantzig’s supply chain integration solutions
What is supply chain visibility?
Supply chain visibility refers to the ability of businesses to track their goods and products that are in-transit from the manufacturing stage to the final destination and gives a comprehensive view of the inventory levels. One of the key goals of supply chain visibility is to improve and strengthen the supply chain by ensuring that the data is readily available to all stakeholders, including customers. As more number of companies are outsourcing their supply chain, they tend to lose control and visibility in the supply chain.
Importance of having visibility in supply chain operations
Rising competition, globalization, and growing complexities in the marketplace are the major roadblocks for companies in effectively managing their ever-expanding supplier networks. Clear visibility in the supply chain is challenging but also more vital to businesses today than ever before. Here’s why:
Bigger and complex supply chains
Most companies today operate on a global scale, as a result, their supply chain is much more complex and bigger, making them extremely difficult to manage. Consequently, if companies do not have good supply chain visibility, it can hamper their ability to communicate effectively and make quick, informed decisions. In such situations, companies must invest in a cloud technology that is capable of managing big data or work with a logistics company that specializes in transportation management.
A strong supply chain is one of the biggest assets that a company can possess. Today, companies have come a long way in terms of improving supply chain efficiency and enhancing the speed of operations. However, global operating systems, pricing pressures, and the ever-increasing customer expectations are putting extreme pressure on supply chain operations. This also demands businesses to move out of their traditional supply chain execution systems and change over to techniques that can better accommodate the dynamic market conditions and customer demands.
But how can businesses identify the gaps in their supply chain? The answer is to leverage supply chain analytics. Supply chain analytics assesses supply chain performance and identifies the shortcomings and inefficiencies in the supply chain configurations. The ultimate aim of using this technique is to improve the end-to-end performance of the supply chain in terms of operational, financial, as well as managerial aspects. Supply chain analytics enable companies to dig deeper into the supply chain data and examine savings and efficiency gaps. The importance of supply chain analytics doesn’t end there, some of the key benefits it offers to companies include:
The main aim of any business is to produce products/offer services that will eventually attract customers and result in a sale. All the materials in the supply chain ranging from inventories, raw materials, and work-in-progress are there to serve this purpose. What companies need to do is to identify whether they possess the right inventories, raw materials, and work-in-progress, and supply chain analytics is the key to help them do this. Supply chain analytics highlights a redundant or slow-moving stock that has occurred due to wrong forecasts and inaccurate estimates. It can also help identify instances where there was the potential to sell more products, to meet the demand that was there but left unmet.
Speed-up material movement
When the supply chain moves quickly, it facilitates the reduction of inventory levels and frees-up cash. But the catch her is to know how to make it move quickly. This is where supply chain analytics comes in handy. Using this technique, it is easier to identify factors such as the impact of order size rules and policies, or stock-keeping rules and policies, and demand variability. For instance, the impact of production batch sizes on finished goods, raw material levels, and work-in-progress.
Not just the internal decisions and factors, but several external factors also have an impact on the supply chain. Take the case of poor performing suppliers for instance. This can have a major impact on other supply chain factors such as customer service levels, on-time delivery performance, and inventory holding. Supply chain analytics can help by taking an ERP system’s raw data and transform it into detailed performance metrics, supplier by supplier. With this companies can easily identify gaps in supplier performance and quickly act to rectify it.
Efficient utilization of data
Modern supply chains produce unprecedented amounts of digital information. Such data from transactions and events were once recorded on paper. Now the data is being digitally captured and stored. By using advanced capabilities like supply chain analytics, companies can easily identify their shortcomings and optimally improve performance.
To know more about the opportunities and trends in supply chain analytics
What the Client Wanted
Synthesize data from multiple sources across their supply network in a presentable form so that it offers meaningful insights in the context of current supply chain conditions.
Quantzig’s supply chain analytics solution enabled the client to derive actionable insights from the vast pool of the company, supplier, and external data sets to make better-informed supply chain decisions. This supply chain analytics engagement entailed the implementation of a robust solution to enhance responsiveness by offering real-time supply chain information. The solutions also eased the interpretation of trends by presenting the historical data in a comprehensive package.
Overview of the Power and Energy Industry
Over the past few years, the global energy market has been caught up in a storm of transformational disruptions. The technological advancements and operational enhancements in the global energy market have been relatively narrow; thus, creating limiting efficiency gains. However, in recent years, advancements in technology have started opening doors to wider operating margins. Also, the explosion of the power and energy industry can be attributed to the technological breakthrough and the growing demand from the end-user segments across the globe.
Power and Energy Industry Challenges
- Ensuring access while maintaining affordability: Though globally several regions have access to energy, the question of long-term affordability still remains less certain. Catering to the global energy requirements while focusing on affordability are key issues that pose major challenges for players in the power and energy segment. Access to energy and affordability are critical problems that are not only major concerns for developing countries, but the developed countries to feel the pinch of rising energy costs.
- Devising new business models to minimize carbon emissions: It is essential to innovate and adopt new business models in the power and energy segment owing to the accelerated demand from various industrial segments. Amongst such factors are the growing reliance on hydrocarbons for energy generation, the drop in prices of energy derived from renewable sources, and the shift toward electric vehicles.
About the Client
A multi-million dollar firm in the power and energy industry.
To make effective supply chain decisions to preempt supply chain disruptions and overstock situations, the client – a power and energy industry major – approached Quantzig. The client wanted to leverage Quantzig’s expertise in supply chain analytics to bring about double-digit improvements in markdown percentages.
Benefits of our supply chain analytics solution
To gain in-depth insights into our supply chain analytics solutions
Quantzig’s supply chain analytics solution enabled the power and energy industry client to drill down to the root cause of their poor supply chain performance. Our solutions were presented in the form of actionable insights on the latest supply chain conditions. Also, the solutions offered by the supply chain analytics experts at Quantzig assisted the power and energy client to enhance their supply chain efficiency.
Supply Chain Analytics Solution Insights
While several leaders in the energy market consider their supply network to be a source of financial risk, a few perceive competitive opportunities. Also, the advent of new technologies such as smart sensors to advanced analytic solutions such as supply chain analytics are rapidly transforming traditional, linear supply chain systems into intelligent, connected, and customizable supply networks that drive sustainable growth.
Strategies that we recommend based on supply chain analytics help power and energy firms to reduce the impact of demand uncertainty and supply chain risks. Additionally, the dynamic nature of the supply chain and the current geopolitical solutions often lead to unforeseen interruptions in the global supply network, including shipment delays and the supply shortages. To overcome such challenges and gain a competitive edge, organizations need to be nimbler in responding to the dynamic market trends. To accomplish such tasks, our supply chain analytics solutions leverage data from a multitude of sources across an organization’s supply network to cater to the dynamic needs of an organization. So, go ahead and build the required capability to gain that competitive advantage to stay ahead of your peers!
To know more about how our supply chain analytics solution helped a leading power and energy industry player
What the Client Wanted
A leading skin care products manufacturer wanted to develop efficient supply chain strategies to serve the needs of their customers.
Made use of predictive analytics and machine learning techniques to anticipate the customer demand and accordingly regulate their inventory levels
Summary of the Global Skin Care Products Industry
The global skin care products value chain consists of raw material suppliers, skin care products manufacturers, end-use industries, and distribution channels. Over the past few years, rising awareness about the different advantages of skin care products has resulted in increased demand. Moreover, natural and organic products have become a major segment in the global cosmetics and wellness market. Additionally, increasing awareness about the harmful effects of synthetic products has led to the rise in the demand for organic products. This rising demand has subsequently led manufacturers in the global skin care products market to focus more on R&D and product innovations. Lastly, the rise of online market platforms, where customers can purchase a wide range of products from any part of the globe, has been one of the principal reasons for the increase in accessibility for skin care products.
Environmental impact of skin care products: In recent years, sustainability has become a key concern for many businesses in the personal care and cosmetics industry. Also, consumers have become all the more concerned about wellness, health, and issues such as natural resource depletion and environmental degradation. This has promoted the demand for ‘greener’ alternatives when it comes to these products. Customers are demanding for products that do not harm their skin, nor the environment; as well as products that are free from modified ingredients and natural.
Transparency and traceability issues: Today, supply chains have become global and it is difficult to trace the origin of products used in the skin care products. Although sustainable skin care products are widely available, there remain issues of traceability and provenance.
About the Client
The client is an American multinational skin care products manufacturer based out of the United States.
The skin care products manufacturer wanted to improve their logistical capabilities while maximizing overall profitability, understand the pricing pressures and develop efficient supply chain strategies to serve the needs of their customers. The company also wanted to analyze the level of uncertainty associated with the supply of products and improve the forecasting capability to remain abreast of the customer demands. Furthermore, the client wanted to gain end-to-end visibility into the supply chain and identify the best suppliers to improve their overall supply efficiency across 160+ countries.
Summary of our supply chain analytics engagement
To gain in-depth insights into our supply chain analytics solutions for skin care products manufacturers
With the help of Quantzig’s supply chain analytics solution, the leading skin care products manufacturer leveraged the use of predictive analytics and modeling and machine learning techniques to anticipate the customer demand and consequently adjust their inventory levels. In addition, the client also identified the top performing suppliers based on the key performance indicators to make accurate shipments, on-time deliveries, and process payments. Furthermore, Quantzig’s supply chain analytics engagement also helped the client fine-tune their existing supply chain strategies and improve savings and efficiencies.
Supply Chain Analytics Insights
Quantzig’s supply chain analytics helps manufacturers across the skin care products industry to gain metrics for comparing the competence of their supply chain when compared to their industry counterparts. Additionally, firms can analyze various datasets for inbound and outbound data and split the factors influencing the delivery attributes.
To know more about how our supply chain analytics helped a leading skin care products manufacturer
With each passing day, technological progress is becoming more and more important as it affects every part of the company. In the case of supply chain management, new technologies and trends appear frequently. This is one of the main reasons why it is vital for companies to understand which trends exist, assess the potential benefits of evolving technologies, and prioritize implementation of goals. With the advent of advanced analytics and technology, the supply chain is evolving perhaps more rapidly than ever before. Industries like retail are increasingly relying on advancements such as supply chain analytics to ensure smooth flow of operations. The fact that you might hardly ever see an empty shelf in a retail store is proof enough. The insights gained from supply chain analytics go right to the heart of how a business performs. With time, supply chain analytics has been progressing and is now becoming more sophisticated. Here are some recent developments you need to know about:
Internet of Things (IoT)
Internet-connected sensors and devices have immense potential in supply chain analytics. Supply chain management works on the philosophy of getting the right products to the right customers at the right place and time. Earlier, organizations relied heavily on historical data in order to forecast their manufacturing schedule and quantity based on the customer demand. Often, this method can prove to be inaccurate and expensive. With the advent of IoT in supply chain analytics, companies can use data collected in real time from products equipped with IoT devices to predict failures more accurately.
Recently, there has been a major evolution in supply chain management across organizations. These advancements have resulted in better supply chain visibility, efficiency, and profitability. In the coming years, the industry will continue moving to the end-to-end supply chain management model foundational to Industry 4.0. This will further ensure that entities at every level of the supply chain will have equal access to actionable, accurate data. Consequently, more number of organizations will be encouraged to adopt supply chain analytics to increase their profitability and promote improved decision-making.
Big data in the supply chain
Supply chain management generates a large amount of data on a daily basis. Interestingly, in most cases, companies are unsure of what to do with this data. But as the industry moves toward seamless integration of advanced supply chain analytics, it will be crucial to put all that data to work. By relying on big data solutions, companies will be able to make better use of the data in-hand and convert this big data into ‘smart data’. Smart data will help identify the business problem, determine the source of data to solve the problem, and then finally use it for gaining the desired solution.
Hybrid supply chain strategy
Though initially, organizations started moving to a lean supply chain approach, the increasing complexity of the supply chain has prompted companies to gradually move to an agile approach. However, smart players are now adopting a hybrid supply chain management strategy. This will further facilitate better supply chain analytics as companies can now not only predict possible complications more accurately but also react to the unexpected more effectively.
To know more about the opportunities and challenges and supply chain analytics and tips to ensure better supply chain management