Last Updated on August 25, 2022 by James Ewen
Big data has become the power that organizations need to harness to move their company forward at high speed. By the year 2020, the amount of data available in the world is estimated to be roughly around 44 zettabytes. Collecting all these datapoints will do no good unless it is utilized through the proper channels.
Various organizations from across the world are harnessing big data to create better business models and execute faster development strategies. Big data is playing a pivotal role in reducing operational costs through statistical and predictive analysis. In Supply Chain Management (SCM) too, there is a lot of data available. When this data is put together to create meaningful operations, it can make the entire supply chain more feasible.
While some organizations have identified what big data could do for their supply chain systems, there are a lot of companies which are yet to explore the possibilities. Here are some of the most crucial aspects through which big data can help to groom the SCM.
Be on Top of Your Demand
Predictive analysis is a huge part of making use of big data. With a considerable amount of data at their disposal, companies can avoid inevitable redundancies in their operations all the while making efficient use of the stocks. There are a lot of ways through which the predictive analysis with big data can help.
Companies can identify retailers who may need some stock sooner and the retailers who take longer to complete the stock order. Companies can analyze their orders and see if the cost of supplying the stock to some regions may be too higher than what they could afford. Companies can even predict which of their loyal customers may switch to their competitors and which of their competitors’ customers are looking to explore other options.
Much can be gathered from the predictive analysis of these datasets and enable companies to take precautionary measures and be ready for any potential surprises.
One good example of a multinational company using big data for the supply chain is PepsiCo. Replenishing the stocks of retailers is of significant importance for a customer-oriented product supplier like PepsiCo. Therefore, they make use of big data to predict the retailers’ stocks based on the data of the inventory they have, the time needed for the shipment, and the volume required to be shipped. This has helped PepsiCo to ensure that their products are never out of stocks from their retailers’ and at the same time, ensure that there is no high wastage. This has also been applied to retail, where the demand of designer swimsuits is predicted to ensure delivery in peak times.
In short, the predictive analysis with big data for supply chain helps companies to make the right volume of stock available to the right people at the right time.
Be in Control of Your Operations
Even when the external factors seem to be out of control most of the time, with big data analysis, you can be in control of your supply chain operations.
One significant problem that many supply chain managers face is the problems they face on the journey between the moment the product leaves their warehouse to the time it reaches the retailers. This is where a lot of external obstructions can affect delivery. When the data for the entire supply chain operations is collected over several years and updated frequently, companies can avoid and find a roundabout better way to ensure that the supply chain is not affected by these out-of-hand disturbances.
Moreover, analysis of big data will also enable companies to find better supply chain routes that are optimal and profitable. Based on the demand, expected revenue, the geoanalytics, and available modes of transportation, the analysis can to create improved and efficient ways of managing the supply chain, reducing cost and decreasing delivery time.
Be on The Constant Path of Innovations
Innovation is a necessary part of the supply chain, and big data doesn’t just stop at helping supply chain manageability, they also provide new avenues for achieving better efficiency.
You can idetnify new delivery channels that could half the cost or merge existing delivery channels for better optimization. For an organization to improve, they have to be continually innovating, and big data plays a significant role in these innovations.
Accenture found that including big data in their supply chain operations led to a 2.6x times increase in their supply chain efficiency. This consists of the innovations in the SCM through multiple channels.
A good portion of getting the best out of a big data or analytics company for SCM is by innovating as the company progresses. These innovative ideas can also help the supply chain managers in decision-making, having better control, and minimizing their problems.
Leveraging the data available at hand prevents unexpected supply chain issues and streamlines supply chain operations. Companies can save a great deal of money, cut down the time spent on managing the supply chain, and further assisting in future expansions.