Big Data is the future for Supply Chain Management
Companies today are collecting increasingly massive amounts of data with the help of digital technologies. To make sense of that data, they need new strategies, improved skills and more powerful tools to analyze the numbers and find useful insights, advancing the importance of Big Data analytics as a critical business capability.
At the same time, Big Data management has tremendous implications for supply chain management. Firms that can aggregate, filter, and analyze internal data, as well as external consumer and market data, can use the insights generated to optimize decision making at all levels of the supply chain.
Here are ten ways big data can revolutionize supply chain management:
- Optimization of distribution, logistics, and production networks by using powerful data-processing and analysis capabilities
- Improved accuracy of demand forecasts, discovering new demand patterns, and developing new services by sharing data with partners across the supply chain
- Better customer segmentation to improve targeting of products or services
- Enabling more complex supplier networks that focus on knowledge sharing and collaboration as the value-add over just completing transactions
- Engaging in preventive maintenance of production assets and installed products
- Conducting near real-time supply planning using dynamic data feeds from production sensors and the Internet of Things
- Using geo-analytics to merge and optimize delivery networks
- Greater contextual intelligence of how supply chain tactics, strategies and operations are influencing financial objectives
- More accurate operational information on everything from inventories to transit times
- Optimized pricing -firms can use consumer data, from both internal and external sources, to develop pricing models that maximize profit margins, and use predictive analytics tools to forecast demand for a particular product at different price points.
According to the 2014 18th Annual Third-Party Logistics Study produced by Dr. C. John Langley and Capgemini Consulting, only 8% of shippers and 5% of third-party logistics surveyed have implemented Big Data initiatives involving the supply chain. On the other hand, nearly all shippers and third-party logistics providers believe Big Data is vital in future efforts to help shippers improve tactical and strategic operation of their supply chains. A similar study by eyefortransport shows 84% of executives working in supply chain or logistics think that Big Data will have a significant impact on their company.
Basically, most companies understand the tremendous potential of Big Data for supply chain management, but have not yet integrated it into their operations because they lack the financial, technological or human resources to do so.
In my opinion, the benefits of putting Big Data together with supply chain management make it an obvious choice, while the accelerating volume, velocity, and variety of data make it a necessary choice. This is why companies who have already integrated Big Data into their supply chains will likely have a decisive competitive advantage over those that don’t or don’t plan to.
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