January 2014 | Commentary | IT Matters

Supply Chain Analytics: Overcoming Obstacles to Stay Ahead of Your Competitors

Tags: Logistics I.T.

Sebastian Valencia is Client Solutions Executive, Clarkston Consulting, 214-677-8479

Leveraging data analysis and technology integration can generate powerful insights to transform today's supply chains. Companies continue to struggle, however, with the best techniques to get the right information in the hands of their decision-makers.

Many manufacturers and shippers report their organization is not aligned around key performance metrics. Simply including analytics in your strategy does not guarantee that the right factors will ultimately be measured.

Here are a few obstacles that keep companies from benefitting from supply chain analytics:

  • Effectively sharing data across the organization. Recent investments to capture and store data have left many companies swimming in information. Most businesses do not operate a centralized analytics group to help drive strategy and execution, and are not leveraging analytics to guide functional processes throughout the enterprise. The first step is designing the right organization that can handle such transformation.
  • Investing wisely in technology. Many analytics efforts are geared toward real-time information, because most leading companies have already established a centralized data repository, capable of housing huge volumes of data inputs. Companies should be careful to balance IT-only investments with well-supported strategy, process, and organizational alignment efforts.
  • Building the right team to support analytics. Tenured employees with decades of experience and extensive knowledge of a company's business may lack the analytical mindset required to use advanced tools and muscle through extensive data. On the other hand, new hires bring the right analytical knowledge, but might lack the business and industry acumen to rapidly use their abilities. Evaluate opportunities to hire strategically, and leverage external partnerships to fill existing talent gaps.

Strength in Numbers

Despite the challenges, leading organizations are embracing supply chain analytics for transportation mode selection, agile replenishment, product launch support, inventory allocation optimization, and strategic sourcing.

As a result, analytics is generating disruptive innovation within the supply chain. Companies must determine whether to redirect current investments in inventory. Traditionally, such buffers help offset lack of visibility and unpredictability within the supply chain.

Now, however, businesses are investing capital in data, talent, analytical models, and technology to increase overall visibility, letting them reduce inventory positions while increasing responsiveness. Leaders are able to distance themselves from the pack.

Thanks to analytics, fact-based, quantifiable trade-off decisions are powering the monthly sales and operations planning process. Not only that, but analytics is providing the ability to establish the correlation between disparate environmental conditions ranging from trade strategies and marketing campaigns all the way to consumer confidence and competitor actions.

The gap between leading and lagging companies will continue to widen as businesses get better at capturing, modeling, and analyzing data to derive powerful insights and make faster supply chain decisions. Lagging companies will be left further and further behind. Making smart use of supply chain analytics can help ensure your organization is not among them.