Supply chain analytics can provide insight and competitive advantage, but this is only achievable through collaboration, alignment and synchronisation, both internally and externally.
In my first blog ‘A breakthrough for supply chain management‘ I discussed how organisations need to release the value from their data by turning it into information, insight and knowledge. From this improved knowledge and understanding of their business, organisations will be able to make quicker and more accurate decisions, gaining competitive advantage. They will become more agile.
The key areas of value within the supply chain decision-making spectrum lie at the intersections with other functions and organisations. To be specific, this is why supply chain excellence can only be achieved through collaboration, alignment and synchronisation. Supply chain people need to be good business collaborators.
Internally…
This means understanding the market, the products, the customers and the supply chain implications of commercial plans is key to supply chain and business success. Aligning the supply chain strategy with the business’s commercial strategy is vital. Equally, considering the implications on the supply chain and the associated costs when setting the commercial strategy are a key input into that decision-making process. So Supply Chain leaders need to drive integration between the supply chain and the commercial functions in order for the business to be set on an optimal path.
Whilst externally…
Having set the strategy, defined the product portfolio, the target customers, the route to market and the supply chain network, the job now is to supply the market. The aim is to achieve this at the lowest overall operating cost. So, the more synchronised and aligned the processes, and the better they are executed, the better the result. This applies to the business’s internal supply chain and also the extended supply chain including the performance of its supply chain partners. Supply chain managers need detailed visibility of the performance of the extended supply chain to get the best result.
However, meaningful collaboration is proving difficult to achieve. According to a McKinsey survey of global executives:
“The inability of functional groups to understand their impact on one another is the most common barrier to collaboration.”
One of the main reasons is that they are fundamentally lacking the information and therefore the understanding and trust that this brings. Even with a fully integrated ERP system, the cross-functional meetings and discussion tend to be supported by basic spreadsheet analysis and information. A much more powerful capability is required. This is where analytics and data visualisation can enable a breakthrough in the level of understanding and trust between functions and organisations.
Data driven analytics can provide the insights to create this required level of common understanding. By providing and presenting information in an intuitive manner, with in-depth analysis, they will enable people to answer questions and understand the issues and challenges. Supply Chain Analytics, with the ability to handle large sets of data, can provide detailed information for both the commercial and supply chain sides, facilitating market and commercial scenario modelling combined with models of potential supply chain responses. This holistic picture of the business would support cross-functional integration and meaningful collaboration.
Equally, data analytic systems can cross company boundaries and, through hosted solutions, provide visibility of the extended supply chain. In this way, opportunities to align and synchronise business strategy and processes will truly open up. The businesses that can forge strong collaborative relationships with the supply chain and business partners will be the winners.
The way forward?
Today’s Supply Chain leaders will have the digitalisation of the supply chain at the centre of their management information strategy, building tools to increase collective knowledge and understanding of the business. Collaboration, information and knowledge are the key to winning in the future. The best-equipped organisations in these areas will learn more quickly than others and improve constantly, working out what it takes to win, learning how to deliver change, and succeeding. Big data analytics will enable businesses to thrive.
Want to discuss how you can use your supply chain data and analytics more effectively? Drop me an email: Andy.birtwistle@concentra.co.uk
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