Importance of Supply Chain Analytics

CIO Review Europe | Wednesday, June 23, 2021

Analytics software could detect dangers by noting that a particular transportation provider has consistently delivered shipments late in the previous month. It can not only detect this pattern but also predict the possibility of further delays.

FREMONT, CA: Supply chain analytics enables businesses of all sizes to make better, faster, and more informed decisions about their operations. As a result, it provides significant and long-term value to the businesses that employ it.

The reports and dashboards assist businesses in identifying and understanding potential hazards, improving planning, optimizing inventory management, and better meeting the high expectations of their consumers. For example, analytics software could detect dangers by noting that a particular transportation provider has consistently delivered shipments late in the previous month. It can not only detect this pattern but also predict the possibility of further delays. In addition, the system can calculate the cost of chargebacks and returns and the number of probable late deliveries.

With more precise projections, analytics can help plan better, allowing one to put all of the operational components in place to reach the predicted volume. Suppose a retailer notices a continuous increase in sales as the holidays approach. In that case, it may put larger purchase orders with suppliers and hire additional contractors to staff its warehouse in preparation for a rush in orders during the critical holiday season. If any suppliers cannot meet these increased orders, the store can seek out alternative suppliers while there is still time.

Many firms have either too much or too little inventory, neither of which is desirable. Excess inventory results in higher-than-necessary inventory carrying costs, while running out of things results in lost revenues. Analytics can assist in finding the proper inventory balance to keep costs down while avoiding stockouts. Based on the normal lead time for that supplier, the system may issue an alert for running low SKUs. Sales trends can also aid the operations staff in determining which items require more warehouse space and which can be kept in small amounts or phased out.

All of these metrics and statistics work together to help firms satisfy client expectations. A disruption in the supply chain can negatively influence the customer experience and encourage them to purchase from a competitor. Companies can also track statistics directly connected to the customer experience, such as the on-time delivery rate or order accuracy rate, to spot and rectify any troubling tendencies.

See Also: Top Supply Chain Solution Companies

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