This week I will be joining two supply chain veterans at the Supply Chain and Logistics Summit to discuss the influences of technology, software and analytics on supply chain management.
Supply chains are in continual flux. Just when companies think they have developed the best strategies, everything changes. In line with the constant remodeling nature of global supply chains, the discussion is centered around Big Data and best practices leading supply chain executives to think collaboratively within and outside the organization: Supply Chain: of Marketing, Big Data & Digitization.
Ahead of this discussion I want to share a few insights:
- According to a study conducted by Deloitte less than 26% of business executives are using data analytics tools and processes to help manage third party relationship risk. There are numerous data management and analytics platforms available that can empower supply chain executives to make more informed decisions. Companies are leaving savings and revenues on the table by not properly integrating supply network knowledge into their decision-making. According to the McKinsey Global Institute retailers could increase operating margin by more than 60% by exploiting data analytics. In conclusion, in the big data game most companies are doing it wrong!
- Fragmented collaboration within and outside the organization creates barriers to intelligent supply chain planning even for organizations that do have a strong data analytics strategy. Research from Capgemini finds that 79% of organizations have not completely integrated their data sources across the organization. This created fragmented decision making, and leaves departments powerless to disruptions within the supply chain. Seamless data exchange gives teams a heads up when a disaster has taken place at a nework facility, and protects the overall brand from making promises it cannot keep to consumers. The situation is even graver when considering the lack of information exchange outside of the organization. Deloitte finds that 23% of supply chain executives monitor their third party relationships less than once a year and 10% do not do it at all. These practices leave supply chains exposed to a variety of risks; they also do not empower teams to be proactive in decision-making.
- The spent on big data structures, analytics services, and employee training too often outweigh the benefits. More data does not necessarily mean better insights, the power lies in understanding the meaning of the information and gathering the right data with a plan in mind. Across organizations there is a huge interest in harnessing the power of data, yet this comes with a lack of direction in data collection. Companies do not yet extract the value from the data that is widely available to them from various sources. Managing data intelligently requires identifying and prioritizing opportunities where knowledge can be most beneficial; it is crucial that companies embark on this mission with a clear end goal in mind. The research firm Gartner predicts that by 2020, 50% of organizations will actively measure and assess returns on analytics initiatives; the highest ROI will be achieved by leaders who know exactly what they are measuring and why.
Global supply chains are successful only through strong partnerships and the power of knowledge sharing.