As companies have struggled through these past couple of years, supply chain visibility has become prevalent than ever before. Supply chain analytics has become important for businesses to monitor and adapt their business priorities and models to readjust forecasts and adjust to demand. Whether employing a push or pull model, companies’ inventory strategies have changed.
Many C-Level executives are breaking their silence as to how they are getting through this rough time. As stated by Jim Butts, Sr. VP of Transportation at CH Robinson, companies that have survived the recession best generally have four attributes: highly variable cost structures; cultures that focused on being very close to customers; strong, active supply chain leadership; and the ability to embrace change more so than competitors economic time. These four attributes point to the backbone of many systems out there; but do they supply the business intelligence needs of the organization to have the visibility they are looking for?
Looking at these four areas from a systems standpoint brings to light that a system must have components of business process agility, visibility, financials, customer service, and supply chain analytics. These functions can be processed through an enterprise performance management solution or separate BI programs, often using dashboards. A system that can unite the data from several systems or aggregate from one central system is a valuable tool to gain insight into your business. Dashboards that can be catered to individual users with usable data from their own tasks and functions can empower employees to become more productive by making better decisions, increasing efficiency and have access to real-time data for customer service is invaluable.
Newer systems incorporate business intelligence or performance management provided by operations, finance, IT, customer service, marketing, and all other departments within your organization. A good BI software should include data aggregation from business processes, workflows, work-cells, inventory status of everything in plans, replenishment, work in progress, in-transit inventory, inventory already on order, and lead time queries, central or dispersed databases, labor management, operational KPIs, multiple systems, and the ability to unite multiple technologies. Furthermore, it should be cloud capable, have an easy to use interface, offer sales information, as well as non-technical query building for non-technical personnel, and department independent capabilities with individual or group security rights. These are some of the functions that these systems cover. The BI that can be generated from all these functions can provide organizations the required real-time information required to make the correct decisions.
If an organization selects this type of flexible BI tool, it enables the organization to have the ability to make decisions quicker and embrace change because of readily available information. Whether it is good or bad, the ability to adapt to change is the key decision-making process that your competitor may not make which will put you ahead of your competition. These companies who have embraced change rapidly adapt to changing conditions that often show profitability.
A line told to me from one of our customers: “In business, you don’t know what you don’t know about your business.” He was referring to a supply chain system he had put in to monitor supply, control replenishment, track waste, monitor inventory, control costs from procurement and monitor supplier quality and bidding cycles. Once the system was implemented and the dashboards were set up the information he was able to aggregate from his system into how his business was working. “The results floored me, as to what was going on,” he said, when we started to analyze the data. By understanding what his business was doing, this particular customer saved over 36% of cost overruns and gained 29% more profitability by reusing and accounting for unused material and better sourcing practices. This particular customer actually customized yachts and sold shipbuilding materials for yachts. The new-found insight allowed him to change his business processes and become efficient than what he was doing previously. The new-found information gathered facilitated decision making by providing decision support from profitability of materials to reduced procurement cycles throughout the supply chain.
As can be seen, there are no magic bullets for how BI can change your business. However, available solutions can accommodate whatever you are trying to track or fix. If someone were to give you tools to assist you in your business wouldn’t it be worth a look to see how you can improve its performance? This is one example of supply chain meets BI or EPM.
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