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AccordingtoWikipedia,supplychainisasystemoforganizations,people,activities,
information,andresourcesinvolvedinmovingaproductorservicefromsupplierto
customer.Activitiesinsupplychaintransformtherawmaterialsintoafinishedproduct
andfinallydeliversittothecustomer.Traditionalsupplychainincludeselementslike

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suppliers,manufacturers,wholesalers,retailersandfinallycustomers.

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Inthisblog,Iamgoingtodiscusshowanalyticsisplayingacrucialroleinenhancingthe
performanceofsupplychain.Tosetthecontext,Iwillhighlightthethreemajor
problemsbeingfacedbysupplychainexecutivesandlaterexplainhowanalyticsis
helpingthemsolvetheseproblems.

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Supplychainchallenges

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Witheveryeconomybecomingglobalizedandcompaniesincreasingtheirpresence

acrosscountries,operationsofglobalmanufacturingandlogisticsteamsarebecoming
complexandchallenging.Delayedshipments,inefficientplants,inconsistentsuppliers

canstallanddelaytheshipmentstherebyincreasingthecompanyssupplychaincosts.

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Someofthemajorchallengesthatsupplychainexecutivesarefacingtodayare

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1. Visibilityofglobalsupplychainandlogisticprocesses

BRIDGEi2iAnalyti

2. ManagingDemandVolatility

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3. Costfluctuationsinsupplychain

AnalyticsinSupplychain

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TheincreasingimportanceofAnalyticsandplanningtoovercomethesupplychain

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challengesthatexecutivesarefacingtoday,cannotbeignored.Mostofthe
organizationsareplanningtoincreasetheirinvestmentsinAnalyticswithabulkof
itgoingtosupplychainfunctionbecauseitholdsthegreatestpotentialforinnovationand
competitiveadvantage.Withbusinessanalyticsimprovingsignificantlyinthelastdecade
andofferingdecisionsupportforthecriticaltacticalandstrategicsupplychainactivities,
insightsfromtheseactivitiesarehelpingthecompaniestoreducetheircostsandalso
helpinginoptimizingthesupplychains.
Thesolutionsprovidedbytheanalyticstothechallengesfacedbythesupplychain
executivesareclearlydetailedbelow.

MovingtoSmarterLogisticstoimproveSupplychainvisibility
Globalizationhascreatedsomanysuppliers,manufacturingunitsanddistribution
locations.Whilethebusinessgrowthopportunitiesarebecomingstrong,growingproduct

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regionalsupplychainswhichhastobemonitoredclosely.

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Increasingsupplychainefficiencybeginswithenhancingbasicmetricsandreporting,as
theseprovidetheessentialdataforperformanceimprovementinitiativesandprovide
visibilityofsupplychainactivities.Applicationofadvancedanalyticsdrivencontrol
metricscanmonitorrealtimecriticaleventsandKPIsthroughmultipletouchpoints.
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Whencombinedwithpredictiveanalytics,thesemetricscanprovidevaluablesavingsin
areassuchasfreightoptimizationofthecustomer.Organizationsthatareinvestingin

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supplychainvisibilitycanmakedecisionstoincreasesupplychainresponsiveness,
optimizecostandminimizecustomerimpact.

Managingvolatilitythoughdemandandinventorymanagement

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Withglobalizationandincreaseinproductvariancetomeettheneedsofglobally
dispersedcustomers,demandvolatilityhasincreasedsignificantlyandpermanently,
makingdemandandinventorymanagementabigchallenge.Industriessuchasretail,
consumergoods,automotiverequiredailyorrealtimeforecastgenerationstoperformat
market.Advancedanalyticscanbeappliedtotheseareastomoreaccuratelyanticipate
demandandtopredictandmonitorsupplyandreplenishmentpoliciesandplaninventory
flowofgoodsandservices.
Planninginventoryflowofgoodsandservicesisespeciallyrelevanttocustomerfocused
organizationsallowingthemtoleveragetheirhistoricdatasourcestooptimizeservice
levels,augmentinvestmentdecisions,andimprovesupplierperformanceandquality
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controls.Companieswillalsobeabletorunsimulationonbestfitsolutions,theycan
programcontextualexceptionhandlingalertsandusemulticriteriainventoryranking
withassistanceofadvancedanalytics.

Reducingcostfluctuationsbyoptimizingsourcingandlogistics
activities
Supplychaincostsformasignificantpartincompanyscostsandsupplychain
executivesfaceachallengeinhandlingthesecosts.Supplychaincostssignificantly
impactkeyfinancialmetricslikeworkingcapital,costofgoodssold,andcashflow.
Constantneedtoimprovethefinancialperformanceshouldhappeninindustrieswhich
handlelargeamountofinventories.Keyareaswherecostscanbecontrolledwith
analyticsdrivenintelligenceinclude:
Materials:Analyticaltoolscanimprovevisibilitytothetruetotalcomponent
costofproductsratherthanjustprice.Acompleteviewofsupplychaincost
foranygivenmaterialisnecessaryformakingoptimalpurchasedecisions
onashouldcostbasis.Byplacingcompleteinformationatthefingertipsof
thesupplychainmanagers,organizationscanreducethematerial
purchasesthroughimprovementsinsupplychainpracticesandbetterprice
negotiationoutcomes.
Logistics:Fluctuatingdemandpatternsandanexpandingbaseof
suppliersandlogisticspartnershavedrivencompaniestocontinuously
rethinktheirlogisticsnetworkstrategy.TheycanrealizestrongROI
improvementsthroughanalyticsdrivenplanningactivitiessuchasroute

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optimization,loadplanning,fleetsizingandfreightcostreconciliation.
Sourcing:Asbusinessesexpandintonew,volatilemarketswithdiversified
productportfolios,managingamultitudeofsuppliersaroundtheworld
becomeschallenging.Thereareconsiderablecostsandpotentialrisks
whensigningoneachnewsupplier.Whileanindustrymightplayseveral
suppliersagainsteachothertoachievethelowestprice,withoutproper
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balanceofsourcingandrelatedoperationalcontrols,theresultscouldbe
counterproductive.
Sophisticatedanalyticsprogramsgeneraterealtimesupplierperformancemanagement
datathatsupplychainmanagerscangenerouslyusetoimprovetheirsourcingstrategy.
Thisdataempowerssourcingprofessionalsbyprovidinganalysisfrominitialscreeningto
ongoingriskmanagement.Potentialsupplierriskisassessedthroughacombinationof
financialanalysisandcapabilityconstraints.Astrongfactbasedsupplierselection
processratherthanonebasedsolelyoncostistheresult.
SupplychainAnalytics,thereforeplaysakeyroleinenhancingtheperformanceof
supplychainbyimprovingsupplychainvisibility,managingvolatility,andreducing
fluctuationsincost.
Iwouldlovetohearyourviews.Pleaseleaveacomment.

Theauthor,VenkateswaraPrasad,isanAnalyticsConsultantatBRIDGEi2iAcompany
onamissiontounleashthepowerofanalyticsandtransformthelivesofenterprisesand
individualsalike.Webelievethatthesolutionstoalmostallintractableproblemslies
buriedinsidethedata.TheSupplyChainAnalyticsgroupwithinBRIDGEi2iisfirmly
focusedongoingthedistancewithclientorganizationstomakesurethattheybetter
manageinventory,reduceworkingcapitalthroughourgranularunderstandingof
demandandsuppliervariabilityanddeploymentofcuttingedgeoptimization
techniques.Toknowmorevisitwww.bridgei2i.com
Connectwithus:

Theviewsandopinionsexpressedinthisarticlearethoseoftheauthoranddonot
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necessarilyreflecttheofficialpositionorviewpointofBRIDGEi2i.

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