A supply chain consists of people, organizations, activities, information, and resources that are involved in transportation and movement of a product or service from the supplier to customer. It includes numerous activities to transform raw materials into finished products and also final delivery to the customer. Elements of the supply chain process include suppliers, wholesalers, manufacturers, retailers and the last element is the customer. Proper supply chain analytics plays an important role in the entire performance enhancement of the supply chain process. There are several problems faced by the supply chain and it may lead to several losses also and so it is important to take help of analytics to solve this problem.
Problems faced by Supply chain businesses
Most of the small and big companies involved in the supply chain process face some common challenges due to the complex nature of the system. This leads to inefficient plants, delayed shipments, inconsistent suppliers, unsatisfied customers and increased costs. Common issues includes —
- Visibility of global supply chain and logistics processes
- Managing Demand Volatility
- Cost fluctuations in supply chain
Supply chain analytics – a solution to all supply chain problems
supply chain analytics has a lot of potential to bring innovation and competitive advantage to the supply chain function. The business analytics used in supply chain offers support to take critical and strategic decisions related to the supply chain business. This can be quite cost efficient and also helps in optimising the process of supply chain. Supply chain executives can provide the following solutions to businesses:
- Moving to smarter logistics to improve supply chain visibility
With globalisation there are different units, locations and suppliers at different locations. Although, this is making the business stronger with more products and global customers, but the businesses are also becoming complex with various supply chains to be monitored. It enhances basic metrics and reporting by providing data that is important for performance enhancement and provides visibility of the supply chain activities. It also provides businesses with advanced analytics-driven control metrics that can monitor the events and KPIs with the help of several touch points. If you combine this analysis with predictive analytics then you can improve the customer satisfaction to a great extent thereby leading to better profits.
- Helps in managing the volatility of the market with just in time mechanism.
With so many warehouses and globalisation it is difficult to manage a wide variety of products and also customer needs is dynamic, so it becomes difficult and a big cost to companies to manage this inventory at all locations. Sales forecast may also not be 100% efficient and so analysis can be used to predict and monitor the supply policies and inventory flow in a better way. This also leads to better customer satisfaction, supplier performance and quality control of the entire organisation. With analytics technology, proper exception handling mechanism and multi-criteria ranking for the inventory has become possible.
- Reduction in cost fluctuations
By optimizing the logistics and sourcing activities, the supply chain analytics can lead to a lot of cost benefits for the company. This analysis involves important predictions and analysis such as cost of goods sold, working capital and cash flow analysis.