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
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
Businesses are spreading across the globe, and so are their supply chains. Effective supply chain management can be the critical difference between a successful project with a happy customer and failure with unhappy clients, a blow to the reputation, and a potential decrease in revenue. When companies maintain constant attention to their supply chain at all levels, they will be able to ensure that they get the supplies and raw materials required, when it is needed. Supply chain visibility gives the tools and data that is needed to maintain this level of vigilance on productivity. Supply chain visibility includes a set of monitoring tools, supply chain management software, electronic equipment, computer interfaces, and techniques that give information on the exact location and status of the supplies and materials at any given time. It allows manufacturers, retailers, and industrial companies to see the location of products, raw materials, supplies, and other vital material at any point within the supply chain. A good supply chain visibility solution allows all the stakeholders and the parties involved to view, monitor, and track the movement of supplies through the system. Supply chain visibility helps businesses to boost productivity by providing visibility into critical components in the supply chain process, which include:
Companies can track the manufacturing, creation, or production of the raw materials, parts, components, and finished items. This can include items as common as nuts and bolts or as specialized as custom-made or one-of-a-kind components. For example, if a particular kind of part for the engines that a company makes is in demand, supply chain visibility lets companies know when those parts are scheduled to be made, when the production is underway, and whey they will be completed. This allows better scheduling of processes at the company’s end and avoids delays or shutdowns while waiting on parts, consequently improving supply chain management and operations.
On hand availability
An efficient supply chain visibility system should be able to immediately indicate the on-hand availability of supplies and materials needed for the business operations. The ability to know “how many” or “how much” can be accessed at once is a critical component of planning and productivity. Businesses can be notified well in advance when more supplies or materials need to be ordered. This will also help them to tell how quickly supplies are being used and whether or not there are signs of wastage or other factors that could influence acquisition.
The supply chain visibility system should allow firms to tracks prices of components, supplies, and raw materials. When this information is available at hand, companies will be able to balance budgetary factors with productivity needs to keep all the processes moving forward.
A good supply chain visibility system also gives detailed information about the delivery. Delays in delivery of parts, materials, or supplies can significantly reduce productivity in many business operations. By having the ability to track shipment at all steps from the provider to the company’s facility, companies can keep constant track of their supplies at all times. Whether a commercial carrier is used or direct delivery, businesses will be able to plan their actions and resources to reduce delays and enhance productivity.
To know more about the role of supply chain visibility in enhancing the company’s overall supply chain management
What does supply chain visibility mean for your business? Going by the definition, supply chain visibility is all about knowing where inventory is at any given time, and how well parts, components or products in transit can be tracked as they move from the manufacturer to their final destination. The ultimate goal of supply chain visibility is to improve and strengthen the supply chain by making information readily available to all stakeholders. This would enable a quick response to any errors or changes in the SCM. It means that the demand can be reshaped, and supply redirected whenever, and however, it is necessary to do so. Gone are the days when a handful of specialists and a proper enterprise resource planning (ERP) system could make sure that products are manufactured and delivered efficiently to customers. Globalization, rising competition, and the growing market complexities have broadened the difficulty for companies to keeps tabs on their ever-expanding supplier networks. Gaining supply chain visibility is a challenging task, but also more critical today than ever before.
Importance of Supply Chain Visibility
Several companies today operate on a global scale and use various mode of logistics and shipping to serve their customers. In this case, having a good supply chain visibility is essential to track the supplier network activity accurately and manage SCM efficiently. But even if your company may not have to deal with the global demand and supply, there is a good chance for your supply chain to become extensive and complex. Proper communication and the ability to make quick and informed decisions could be a challenge. In this case, the best solution to boost supply chain visibility may be to invest in a cloud technology that is capable of managing big data or to work with a logistics company that specializes in transportation management.
Meeting customer demand
Today, customers have more options than ever before. This puts them at the liberty to demand more. Modern customers expect shorter cycle times and will be less tolerant of late deliveries or mistakes. To meet such high demands, companies need a transparent, more efficient supply chain, and a better flow of data and information. A system that provides a comprehensive supply chain visibility will help create better consistency in identifying SKUs, measuring units, and enforcing timelines.
Supply chain visibility tools help companies track the constantly changing landscape of government regulations and compliance. This is especially useful for companies who operate on a global scale in managing the complexity of trade agreements and government tariffs. Furthermore, companies can better anticipate and respond to new regulations in the industry and in terms of transportation used.
To make the most out of supply chain visibility, proper information-sharing, analysis, collaboration, and decision-making are vital. Companies must have a team that can dissect information, communicate with suppliers and business partners, and model different outcomes. This analytical approach to data will not only improve your supply chain performance today; it will help companies to anticipate the future.
To know why supply chain visibility is vital for your business
The client- A renowned personal care products retailer
Area of engagement- Inventory optimization
Over the years, the personal care products segment has contributed to a major share of the retail industry’s revenues, owing to the rising emphasis on beautification and personal hygiene. With the growing concern for reducing the usage of chemical substances in the products, leading personal care products manufacturers are planning to invest highly in innovations to develop eco-friendly designs. The personal care products space, at large, will witness a stipulated growth with the growing spending power of the consumers, the influence of international brands, and burgeoning growth of the retail industry. Moreover, the growth in the population and rising demand for luxury products will influence the growth of the personal care products space.
Here are some of the factors that may curtail the growth of the industry over the years.
- Rising preference for organic care products: In the last couple of the years, the preferences of the consumers have started changing, and they have moved towards the use of organic personal care products. The rising concern regarding the negative health impacts of using synthetic care products is compelling businesses to leverage the use of technological capabilities to streamline their product offerings.
- Government intervention: The health issues associated with using synthetic care products are compelling retailers to come up with more natural ingredients for human usage. In the US, the FDA is continuously focusing on creating guidelines to determine the safety of the products for the consumers use. The 21CFR laws pertaining to cosmetics also ensure strict regulations on cosmetics production.
To counter such challenges and devise effective ways to maintain consistency in the product offerings, organizations are leveraging inventory management solutions. An inventory management solution helps businesses accurately keep track of the products to better serve the customers. Through an effective inventory management solution, businesses can minimize inventory write-offs and overstocks and increase the overall supply chain efficiency.
The Business Challenge
The client, a renowned personal care products retailer, wanted to efficiently track inventory levels with better visibility into the incoming and outbound delivery. The client wanted to meet the needs of the customers and make better-informed business decisions. With the help of industry best practices, the client wanted to curtail data entry errors, increase productivity, and lower operational costs. The primary objective of the client was to reduce manual physical inventories and lost sales track due to inaccurate stock levels, inventory write-offs, and shrinkage. Moreover, the personal care products retailer further wanted to leverage technological capabilities to keep track of their inventory, orders, and vendors.
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The Solution Benefit and the Business Impact
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The inventory management solution offered by Quantzig helped the personal care products retailer maintain order management by monitoring order placements. The client was able to manage and reorder stock through effective purchasing management. In addition, the inventory management solution also helped the client handle sales by managing quotations, invoicing, and receipts. The client was further able to facilitate end-to-end tracking of the products from order to delivery.
Inventory Management Solution Predictive Insights
The inventory management solution offered by Quantzig helped the personal care products retailer better manage inventory levels, replenish stocks, and minimize supply chain costs. The solution further offered ways for the client to strike a balance between working capital, operational costs, and service level.