Supply Chain Analytics
The Business Challenge
Exponential data growth is a major problem that continues to overwhelm players across various industries. The invention of new and increasingly complex business models has further complicated the business scenario and only those who effectively manage this complexity will clearly gain a winning edge. However, if left unattended, this complexity turns into a barrier to innovation and inhibits the organization’s ability to derive actionable insights from data. To seize the complete potential of such digital business models, businesses will have to develop better data management strategies that leverage insights derived from supply chain analytics.
The data generated from supply networks is no exception in this context. In the current, economic and geopolitical environment, businesses cannot afford to not know their supply chain processes in detail. This holds true for companies dealing with trend driven products and services, where in addition to the supply chain hitches, they are constantly exposed to dynamic fluctuations in markets trends and customer demands. In such situations, changes in supply chain processes and economic environment often lead to unforeseen supply chain interruptions and a shortage of raw materials.
The client, a leading sports brand, faced several supply challenges due to their inability to make sense of the vast pools of data from suppliers and external third party sources.
In today’s competitive market scenario, supply chain analytics is the silver bullet that’ll help you cut through the competition and gain a winning edge. Request a free demo below to know more.
Top Challenges Faced by the Client
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.
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
The client wanted to accurately forecast the market demand for their medical devices across various developing economies. To assess the demand, the medical devices manufacturer approached Quantzig to devise a demand and supply forecasting framework by leveraging supply chain analytics. They also wanted to accurately forecast demand and adjust inventory to avoid demand-supply shortages.
A detailed quantitative analysis of market opportunities was carried out to estimate volumes, revenue, and market shares for specific market segments. The framework enabled the client to integrate demand and supply planning as a core strategy in their current supply chain management system. Following this, the medical devices manufacturer redesigned their system to leverage and include demand management strategies, such as demand sensing, supply planning, demand forecasting, and advanced supply chain analytics based methodologies.
About the Client:
A multinational company specializing in the manufacturing of wireless medical devices. The client is a leading player in the healthcare industry with several well-established subsidiaries operating in over 40 developed economies.
The wireless medical devices manufacturer was facing difficulties in accurately forecasting inventory and production needs.
How did Quantzig Help the Client:
- Step 1: Developed a demand and supply planning framework using a two-step approach
Our supply chain analytics experts followed a structured approach to develop a precise demand and supply planning framework.
- Step 2: Created an agile supply chain
Overcoming the rigidity caused by an inflexible supply chain and regulatory requirements, which required the incorporation of significant changes in all planning, execution, and consumer-facing processes across the supply chain.
- Step 3: Enhanced demand forecasting methods
The demand forecasting methods had to be refined as accurate forecasting has a significant impact on stability, inventory, and service levels. Better supply planning also requires a combination of measures – including changes to the organizational structure, statistics, and the use of advanced supply chain analytics in demand forecasting.
Benefits of the Engagement:
Our supply chain analytics solution helped the wireless medical devices manufacturer to gain detailed insights on demand swings in the healthcare industry. It also enabled them to avoid out-of sock scenarios by improving inventory levels and ensuring in-stock availability throughout the year. Better assortment and allocation of stocks across all channels assisted in inventory optimization by reducing stock wastage.
Supply chain analytics offers greater visibility of supply chain processes by establishing a cohesive relationship between all tiers of the supply chain. A holistic supply chain analytics approach can help account for changes in process design, organizational operations, and data governance to address market trends including specialization, globalization, and regional demands.
Why incorporate demand and supply planning as a part of supply chain analytics?
To deal with the shortcomings of traditional supply chain management systems, companies are now recognizing the need to incorporate demand and supply planning to help predict future demand patterns and respond in an agile manner to changing customer needs. Moreover, this becomes a necessity as there is an increasing need to sense market demand and quickly translate the requirements into supply chain responses.
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A framework that coordinates demand and supply planning strategies implies a radical takeoff from conventional supply chain models. It expects organizations to upgrade their frameworks to incorporate demand administration procedures – detecting channel demand, improvements to effectively shape requests, and applying advanced supply chain analytics to drive shrewd reactions.
Finding and adding the right demand and supply planning tool is the next big step for your collaborative business strategy. Moreover, demand and supply planning is an approach, which not only reinforces the bond between various segments of the supply network but also between the supply chain and the end-users.
Know more about how our supply chain analytics solution helps manufacturers of wireless medical devices
The client- A renowned medical products manufacturer
Area of Engagement- Supply chain management
The current healthcare industry is witnessing the proliferation of partnerships, relationships, and joint ventured initiatives to meet the growing healthcare expenditure and deliver value to the customers. Despite political uncertainties and sluggish economic growth, the medical products manufacturers are planning to invest in innovations to redefine their business models and create a value proposition for the customers. The rapid transformation in the medical products manufacturing space is fueled by the aging population, proliferation of chronic diseases, and increasing emphasis on quality of care and treatment.
Amid the rapidly changing economic conditions, small and large players have been compelled to adapt and find new opportunities for development. Let’s look at some of the factors the may influence the growth of the industry.
- Cost of product development: The increasing complexity and sophistication of devices are further increasing the R&D expenditures, which, in turn, is increasing the cost of product development. Also, the growing demand for medical products among the consumers is increasing the need for reducing capital in the manufacturing process while negotiating on the expenses.
- Ensuring product quality: Medical products manufacturers need to ensure that they maintain quality in their products to avoid any issues related to product recalls. For any medical products manufacturer, product recalls can have a negative impact on the brand reputation and the company’s overall bottom line performance.
- Regulatory compliance: The growing safety standards and regulatory compliance are compelling medical products manufacturers to offer reliable and quality services to the end-users. Besides the regulatory guidelines, manufacturers of medical devices should garner government support to improve research and development and offer favorable tax reimbursements.
As medical products manufacturers are shifting from a transaction-based approach to a value-based approach that focuses on creating value for providers and practitioners, it becomes essential for the medical devices companies to go beyond the traditional business models to ensure better supply chain visibility. With the rising aging population and increasing health concerns, companies need to rely on supply chain management to grow by leaps and bounds and meet the demands of the end-user segments.
The Business Challenge
In 2012, the top twelve companies in the medical devices industry contributed to approximately 45% of the overall global market.
With operations becoming complicated, a renowned medical products manufacturer faced the need to increase the efficiency of their operations across the supply chain to remain competitive in the market space. With the growing concerns related to delayed shipments, inefficient plants, and inconsistent suppliers, the medical products manufacturer wanted to reduce operational costs to improve supply chain responsiveness and the product quality. In addition, the medical products manufacturer wanted to gain insights into the healthcare trends in terms of the people, processes, assets, and the entire value chain.
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The Solution Benefits and the Business Impact
Strategies that we recommend to improve supply chain visibility and ensure efficiency.
The supply chain management solution offered by Quantzig helped the medical products manufacturer gain relevant insights into the medical devices sector and the opportunities in the medical devices manufacturing space. The client was able to leverage the use of supply chain management to enhance their supply chain visibility, demand forecasting, and further improve the overall merchandising capabilities. In addition, the solution helped the client consolidate metrics into the overall supply chain to help the business optimize their networks and improve efficiency.
Supply Chain Management Predictive Insights
The client was able to gain better visibility into the supply chain process and increase efficiency, improve service levels, and reduce inventory levels. The solution offered end-to-end visibility into the supply chain from the procurement of raw materials to the distribution of medical products to the end-user segments. In the midst of the global competition, the medical products manufacturer was able to develop effective supply chain strategies and logistical capabilities to serve the needs of the customers in a timely and an efficient manner.
To know more about how our supply chain analytics solution helped the medical products manufacturer understand the trends in healthcare industry
The client: A prominent retail client
Area of engagement: Supply chain analytics
The global retail industry is witnessing a stipulated growth with the rise in GDP growth, burgeoning population, and increasing consumer spending. The industry comprises of establishments who are engaged in selling commodities for household consumption. With the recent economic recovery, prominent retail stores are finding ways to offer authenticity and convenience to cater to the growing demands of the customer segments. Moreover, in this customer-driven economy, it becomes essential for the retail stores to reinvent their business models to stay relevant in the current competitive marketplace. Additional factors such as urbanization, technological growth, and increasing demand for products will influence the growth of the retail space. Although the retail stores are witnessing promising growth due to the presence of numerous competitors, several factors may influence the growth of the sector. These include.
- High degree of competition: The recent years have witnessed considerable growth in the number of players offering a differentiated set of products. As price is a factor for the consumers, organizations are facing pressures to maintain pricing efficiency by delivering products at affordable costs. With the presence of numerous competitors, consumers have the option to choose from the player that promises quality while compromising on the costs.
- Lack of effective supply chain: For major retail stores, supply chain becomes an essential tool to keep track of the supply of their products and ensure that the goods are reaching out to the audiences in an agile and seamless manner. Prominent retail stores are also facing the need to maintain better visibility into their supply chain right from the manufacturing to the distribution of products.
- The rise of e-commerce giants: Today, major e-commerce retailers have become tough competitors for the physical retail stores. With the e-commerce platforms offering convenience and agility in their purchasing process, consumers can have access to the products easily. This can greatly affect their in-store buying behavior as compared to online stores purchases.
To effectively bridge the demand-supply concerns and offer more reliable services to the customers, supply chain analytics solutions have started gaining popularity among retailers. Supply chain analytics involves the use of analytical methods and techniques to design and manage their supply chains.
The Business Challenge
A prominent client with retail stores spread globally, wanted to understand the pricing pressures and develop efficient supply chain strategies to serve the needs of their customers. The client wanted to improve their logistical capabilities while maximizing overall profitability. Through a reliable supply chain analytics engagement, the client wanted to analyze the level of uncertainty associated with the supply of products and improve the forecasting capability to remain abreast of the customer’s needs. The primary objective of the supply chain analytics engagement was to gain end-to-end visibility into the supply chain and help identify the best suppliers to improve supply efficiency.
Want to learn more about our supply chain analytics solution?
The Solution Benefits and the Business Impact
The supply chain analytics solution offered by Quantzig assisted the client in assessing and identifying the top performing suppliers based on the key performance indicators. The client was able to make accurate shipments, on-time deliveries, and process payments on time. Moreover, the solution also helped the client’s retail stores to fine-tune their existing supply chain to improve savings and efficiencies. The supply chain analytics solution also helped the client leverage the use of predictive modeling and machine-learning techniques to anticipate the customer’s demand and accordingly adjust their inventory levels.
Supply Chain Analytics Predictive Insights
Quantzig’s supply chain analytics solution helped the retail store understand the current state of their supply chain and identify the typical risks associated with the supply in terms of purchasing overlaps and prices. The client was further able to gain standard metrics for comparing the performance of their supply chain as compared to the industry counterparts.
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Big data analytics is a much-hyped topic in the world today. Almost every industry is looking for ways to incorporate big data and advanced analytics to help improve their business operations. The supply chain and logistics industry is no exception to this trend. The massive amount of data generated by a company’s supply chain and logistics function can be fruitfully used to generate meaningful insights and give strategic direction to the company. A majority of C-level executives have already begun looking for ways to incorporate big data analytics into their supply chain systems. Big data can significantly improve productivity and efficiency in supply chains and provide an edge over the competitors. Additionally, big data can also help companies identify new business opportunities. So, how and where can big data be used in the supply chain and logistics function?
Supply chain traceability
One of the most critical success factors for a supply chain is the ability to pinpoint where the products are in the supply chain. Advances in digital technologies along with barcode scanners and RFID devices have enabled supply chain managers to precisely track where in the supply chain their products are located. Additionally, traceability is also a sensitive matter in the food industry as factors such as disease outbreak, chemicals used, and processing systems should be attributed to responsible parties. To track down where exactly the fault has occurred in the food supply chain, traceability is a must to know where the items originated and what processing took place at each level. This way, food and beverage sector companies can not only avoid hefty fines but also ensure customer satisfaction by providing safer and healthier food. Such sensors technologies, along with IoT and big data can enable end-to-end traceability, which helps the company quickly identify the instances of food contamination.
The volume and quantity of data generated by the procurement department are immense. Processing such data with machine learning and optimization algorithms can help uncover patterns and associations amongst the datasets to make both strategic and tactical procurement decisions. Spend data, contract data, and supplier related data can provide detailed information on the supplier and help identify the ideal vendor. Additionally, mining historical data can unveil future trends and also help identify risks including supplier risk, pricing risk, compliance risk, geographical risk, and disaster risks. Predictive analytics helps the procurement teams to be prepared for a future scenario.
Optimized logistics network
Big data can help the logistics industry players to optimize travel routes due to the advent of IoT and sensors technology. Today, it is possible for vehicles to communicate with each other using vehicle telematics to coordinate on best routes and alert on less desirable routes. The vast amount of data regarding routes preferences, type and size of the vehicle, traffic densities, and weather conditions can provide clues to improve driving performance, determine the exact delivery time, and identify & minimize risk areas.
Improved warehousing efficiency
A warehouse is a piece of real-estate where companies store their valuable commodities. And with all such real-estate, the problem is it costs too much money, not only the rental or lease costs, but also facility management costs. Big data can help supply chain managers to maintain an optimum level of inventory just to the point that they face fewer stockout situations without overstocking the inventory. The power of big data is not only limited to stock optimization, but it can also suggest where to strategically place warehouses, what the optimum size should be, and how to arrange the stock to facilitate easy check-ins and dispatch.
To know more about applications of big data in supply chain and logistics network, warehousing efficiency, procurement efficiency, and supply chain traceability:
The client: healthcare industry player
Area of engagement: Supply chain visibility
In recent years, the spending on healthcare is witnessing a radical increase and stakeholders in the healthcare space are facing the need for technology and operational efficiency to address the social determinants of health. The global healthcare sector comprises of segments including pharmaceuticals, medical devices, medical imaging, and healthcare IT. Also, with the recent shift from a volume based to the value-based environment, healthcare providers are facing the need for deploying innovative care delivery models to meet the relentless demand among the consumer segment. Moreover, the healthcare sector is witnessing promising growth owing to the introduction of digitization as a part of the healthcare system. The industry at large is influenced by factors such as:
Increasing spending on healthcare: The spending on healthcare is increasing owing to the presence of macroeconomic factors such as increasing aging population and the growing prevalence of chronic disorders. To meet the rising needs of the end-user segments, organizations are facing pressures to bring about clinical innovations and enhance their service levels in the healthcare sector.
Innovations: Leading organizations in the healthcare sector are concerned about offering advanced medical assistance while compromising on the costs. To address such concerns, leading businesses have to rely on R&D and innovations to target prevention, monitoring, and treatment to improve healthcare outcomes and reduce costs.
Regulatory compliance: As the services involved in the healthcare sector are a matter of concern for patient health and safety, governments across the globe are strictly imposing regulations on the quality, safety, and efficacy of drugs and medical devices. Also, with the rising availability of counterfeit products, it becomes essential for the government authorities to go beyond the normal compliance and ensure proper regulations before meeting the target requirements.
To address these challenges and reach out to the end-user segment in a seamless and agile manner, leading organizations are utilizing supply chain visibility solutions. Supply chain visibility ensures better transparency into the supply chain activities right from sourcing to the customer delivery. Moreover, organizations can quickly adapt their logistic plan to the current demands and combat additional supply chain risks such as supply disruptions.
The Business Challenge
A renowned client in the healthcare sector with services spread globally wanted to emphasize on the prompt delivery of treatments by assuring the quality of the products delivered. The client also wanted to gain better visibility into their supply chain process from the supply stage to the end customer delivery. Moreover, with the help of supply chain visibility, the client wanted to maintain a complete picture of the inventory in the supply chain and analyze the profitability of the products. The primary concern of the client was to identify and eliminate delays of the products and reduce variability. In addition, the client also wanted to improve the product profitability by identifying and eliminating wasteful processes.
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The Solution Benefits and the Business Impact
The supply chain visibility solution offered by Quantzig helped the client gain real-time visibility into the supplier production rates, shipment lead times, and customer sales projections. The solutions also helped the client spur efficiency while lowering inventories and improving fulfillment rates. The supply chain visibility solution also sought ways for the healthcare sector client to proactively alert customers about the product’s availability and improve on-time delivery and reduce the overall time to the market. Moreover, the solution also offered greater reduction in the working capital in terms of the fixed and variable costs.
Supply Chain Variability Predictive insights:
The solution offered by Quantzig helped the client offer affordable and effective healthcare products with utmost quality. The solution also improved access to the healthcare by reducing drug and device shortages. Furthermore, the supply chain visibility solution also ensured safety by making it harder for the counterfeit products to enter the market.