Business Intelligence Can Help Build Better Supply Chains

Business Intelligence Can Help Build Better Supply ChainsBusiness intelligence can often sound abstract to those not in the field, and theory has a difficulty time in attracting strong support from others, particularly executives. One solution is to focus on the practical results that BI and data analysis implementations can bring.

One such practical proof of benefit is in supply chains. In manufacturing and distribution businesses, supply chains are critical. They represent the complete flow of materials and goods: from suppliers to vendors; to manufacturers; through distributors, wholesalers, and retailers; and ultimately to the end customers. Get better control of the supply chain – with the insight that BI can provide – and the results can be remarkable.

The upsides are potentially huge. A study done by Accenture and the World Economic Forum found that companies could develop sustainable supply chains and shrink their carbon footprint and, in the process, increase revenue from 5 percent to 20 percent, and reduce supply chain costs by 9 percent to 16 percent. In addition, companies could boost brand value between 15 percent and 30 percent, in part by better ensuring compliance and avoiding the types of negative PR that arise from report of corruption, environmental damage, and poor working conditions.

The reason BI is so important in controlling supply chains is because of their expansive nature and the number of ways they interact with a company. The retail industry is just one example where there are “many points in the supply chain where things can go wrong, and there have been numerous well publicized instances of companies missing their numbers due to supply chain issues.”

Apparel is a particularly complex sector owing to the range of places that materials are sourced; the overwhelming number of items, with assortments of size and color, which regularly swap out on a seasonal basis; and the strong variation in customer demand, depending on geographic region, just to mention a few complicating factors.

The amount of data and speed of its generation are beyond the ability of people to manage and understand manually. BI becomes the logical tool to enable real-time analysis so businesses can react to the sudden changes in demand, delivery conditions, and webs of suppliers and customers that all interact.

Instead of wrestling with raw data, decision makers can ask questions about the performance of particular merchandise lines, the potential cost and environmental impact trade-offs of different shipping methods, or the labor law compliance history of different suppliers.

Given that even companies outside the manufacturing and distribution industries at least order supplies, and so have their own supply chains, any company could benefit from the proper application of BI to save money, increase profits, benefit the world, and build brand value.

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