How would you feel if you could make every supply chain-related decision based on facts and analytical insights? We bet you'd be more than glad to achieve this level of decision making, so let us introduce you to the concept of big data.
Big data is a term that describes the large volume of data – both structured and unstructured – that can be analyzed for insights that lead to better decisions and strategic business moves. In the world of supply chain management, where companies handle thousands of SKUs to serve millions of customers, big data becomes by far the most important business tool.
But how does it work?
There are all sorts of applications and use-cases to consider here, but we will try to narrow down the story and focus on big data's best features only. Here's how you can optimize the supply chain with big data analytics.
- Real-Time Tracking and Visibility
- Improved Responsiveness
- Demand Planning
- Optimized Shipping
- Improved Response Time
- Predictive Maintenance
- Price Optimization
- Trend Detection and Long-Term Planning
- The Bottom Line
Real-Time Tracking and Visibility
Supply chain managers and their teams could never keep track of all products and shipments in real-time without big data.
Jake Gardner, a tech blogger at professional writing services, says big data analytics is a game-changer for multiple reasons: "This model of data analysis enables real-time tracking and visibility, so you can make plans and schedule activities much more precisely and accurately."
Apart from that, big data guarantees end-to-end visibility, and so it makes sure that every component of the supply chain is taken care of properly.
Supply chain management is one of the best jobs you can do when everything functions as planned, but things often take a different turn in the process. It is always a challenge to balance between supply and demand, which forces supply chain managers to stay responsive and ready to react on the go.
Big data can save you a lot of nerves because it successfully interprets the latest stats, so you can respond immediately and make additional orders or forgo a certain product or SKU.
The worst thing that can happen to the supply chain company is to overload warehouses with unnecessary stocks or to be left without popular SKUs. This happens quite frequently in non-automated organizations, but businesses relying on big data avoid the problem in nearly 100% of the cases.
Well, the secret lies in comprehensive data analyses that take into account every single aspect of the supply chain, including historical data, emerging sales trends, customer-related insights, and many more.
Do you know that the fulfillment industry reports about a 2% rate of error? Perhaps it doesn't sound like much, but keep in mind that supply chain companies make thousands or even millions of deliveries - if you make one million shipments annually, 2% means you are going to make a mistake in a staggering 20 thousand cases.
This is where big data comes in to help you reduce error rates, shrink delivery times, and improve accuracy. Customers will recognize improvements quickly, and they will be more satisfied with your level of service.
Improved Response Time
The quality of supply chain management can be measured by its ability to respond to incidents and unpredicted events. While it is true that no one can really foresee certain events, the fact is that big data quickly recognize potential issues logistics-wise.
For example, it can warn drivers about construction works, traffic jams, delays, incidents, and other unpredicted situations. That way, it's easy to change the route well in advance and thus improve response time in general.
The Internet of Things turned traditional devices into smart objects that can exchange information and communicate around the clock. Big data is able to collect and process data coming from smart devices, thus enabling the rise of predictive maintenance.
Namely, it uses information from vehicle sensors to identify potential problems with trucks and schedule repairs before the problem actually occurs. It is the simplest and most efficient way to prevent problems and keep the job ongoing without interruptions.
Another thing big data is great at is price optimization. The system allows you to minimize operational costs and maximize profit margins by analyzing a broad scope of factors. That includes the following:
- Suppliers' prices
- Competitors' prices and marketing activities
- Your internal costs of service
- Forecasted market demand
- Regional economic trends
- Seasonal promotions, events, or holidays
These and many other factors influence a given product's price, but it's much easier to set the right pricing plan with big data analytics by your side.
Trend Detection and Long-Term Planning
Finally, big data can help you to detect the coming trends and make long-term business plans. The platform makes it possible to answer a seemingly simple question: What's next?
You can gain lots of business-related insights, but the best thing is that you are free to analyze consumer behavior and understand their purchasing habits. Big data identifies customers' future needs and expectations, so you can prepare on time and meet their expectations instantly.
The Bottom Line
Big data sparked a genuine revolution in supply chain management thanks to its ability to process information and generate highly accurate business insights. It makes complex analytical processes look simple and helps you take advantage of all the information available in the database.
All this makes big data the single most important optimization factor in supply chain management. Are you ready to make use of it?