What is Supply Chain Analytics, and Why is it important for business?
The supply chain directly influences a company’s capacity to offer a pleasant customer experience while accounting for many expenditures that affect overall profitability. The supply chain is a vital piece of the jigsaw for corporate success. The supply chain is a network that connects suppliers, businesses, and end users, and it includes everything from raw material procurement through delivery to the ultimate consumer. Given the supply chain’s critical relevance to organizations, many have increased their supply chain management (SCM) efforts.
They’re searching for ways to make procedures faster, cheaper, and more accessible throughout the long path from a raw materials supplier to an end user. Supply chains contain a wide range of activities, people, and organizations, resulting in massive data. This is where supply chain analytics come in — they can transform that enormous quantity of data into easily accessible dashboards, reports, and visualizations that affect essential choices and lead to better results. Easy access to these statistics has become necessary in an increasingly competitive world.
Supply Chain Analytics: An Overview
Supply chain analytics is the analysis of data companies get from their supply chain applications, such as supply chain execution systems for purchasing, inventory management, order management, warehouse management and fulfillment, and transportation management (including shipping). A supply chain is like a line of dominoes: each step affects the next, and problems at any point could make it harder to meet customer expectations.
Each of the above-mentioned pieces of software may have its reporting features that give more information about a specific step in the supply chain, such as the estimated lead times for suppliers, the current safety stock levels at the warehouse, or the number of orders that are filled per hour. But supply chain analytics are most valuable when these systems work together, usually through an Enterprise Resource Planning (ERP) system. Dashboards or reports can then show and explain data from all parts of your global supply chain. This can be done by the ERP itself or by a separate application.
This gives employees a complete picture of this logistics network and lets them see how a problem affects both the beginning and end of the chain. Then they can act quickly and solve the problem as much as possible. Some systems, for example, can analyze the data in real-time and send alerts to warn about potential issues before they worsen.
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Ways in Which Supply Chain Analytics is Important For Businesses
Let’s look at how vital supply chain analytics will be in 2022 to understand this idea. Here are the ways:
01. Increasing Sales
The main goal of any business is to get people to buy its products and services and make money. Companies need to find out if they have the proper inventory, raw materials, and supply chain network to make more money. This is where supply chain analytics comes in. It helps companies find a slow-moving stock caused by bad estimates and wrong predictions. It can also help find opportunities to sell more products and meet the demand that was already there but wasn’t being met.
02. Getting things moving faster
It’s not hard to guess that improvements will make supply chains move faster so that inventory levels can be cut and cash can be freed up. The key is to figure out how to make them move quickly, which is where supply chain analytics comes in. It helps you figure out the effects of order size, stock-keeping rules, policies, and changes in demand, as well as how much the expansion of the range added to the average inventory level.
03. Data in Abundance
When you put everything together, you can see why and how supply chain analytics can significantly affect how a business runs its supply chain. Today, supply chains send out more digital information than ever before. Information that used to be written down on paper is now routinely captured and stored digitally. Experts say that by 2022, there will be so much data about how well supply chains work that the biggest challenge for companies will be to turn that data into insights they can use.
