No matter the industry, data’s influence in 2015 can’t be denied. The more knowledge a company and its decision-makers have, the better the company will run. For manufacturers, there are not many things more significant for success than a supply chain. Not only does the availability and procurement of necessary supplies define a manufacturer’s ability to deliver goods, but it has to be accomplished efficiently. As with any vendor relationship, manufacturers need to do their due diligence to ensure any supplier they work with is the right fit.
Using comprehensive solutions to arm themselves with deep, up-to-date business data and relevant insights helps manufacturers solve the following three primary challenges.
1. Finding The Best Partners
Identifying the ideal supplier isn’t just a matter of price or geography. There are dozens of variables specific to a company that make it the ideal fit for a manufacturer’s supply chain. By studying all available data, manufacturers can create a complete picture of their prospective suppliers beyond the basic firmographic information about a company. Knowing a company’s location and size is important, but it’s equally important to know if a supplier is growing, is financially sound, has done business in a particular region before or has experience within your market. Using this data, manufacturers can develop analytics models that help determine if a supplier is the ideal partner. Additionally, by being able to visualize the characteristics of existing suppliers, manufacturers can use identify other complementary businesses as options for their supply chain.
For example, when agricultural, construction and forestry machinery manufacturer Deere & Company opted to expand production into both Brazil and Russia, it conducted extensive analysis of nearby suppliers to support these facilities. The landscaping and farm equipment manufacturer planned multi-million dollar investments in these locations. Business data and analytics gave the company all of the information it needed to identify the best locations for their expansions.
2. Securing The Best Deal
When you leverage business data to understand prospective suppliers, you develop a more complete understanding of the market. Keeping your supply chain within budget is critical to the overall financial viability of your organization. This business data enables your financial team to conduct a detailed SWOT analysis of potential suppliers, which can then be used in negotiations to get the best deal for your company. Beyond that, you can use external business data to identify risks with potential suppliers and avoid relationships that could hurt your own company. For example, you need deeper information to tell you if a company is threatened with a lawsuit or considering divesting the business unit with which you are about to work. Having this knowledge helps you mitigate potential risks with partners and suppliers that could cost your company down the line.
3. Evaluating Ongoing Supplier Relationships
By monitoring the available data throughout the term of any supplier contract or agreement, your team can proactively avoid problems. Setting up alerts and triggers can alert you of developments at supplier factories, within the overall industry or with other aspects of the supply chain, so you can be prepared for any red flags that may arise. Perhaps a supplier’s parent company is performing poorly or has lost funding, or a supplier is issuing a product recall on a part you need. These pieces of information, along with additional analytics, enable manufacturers to prepare for issues in the supply chain — or make changes to relationships to avoid any issues.
Across the board, organizations are operating smarter thanks to the application of business data to various functions. The same can be said of manufacturers using business data in their supply chains to manage and maintain their most important relationships.
About the Author: Lauren Bakewell is senior vice president of product at Avention and an entrepreneur who has been a key executive in three software technology startups over her career of more than 20 years. Bakewell holds a bachelor’s degree in international economics from the Jackson School of International Studies at The University of Washington. Follow Avention on Twitter @AventionInc.