¹ However, less than a quarter of this data is being analyzed. Supply chain management affects product and service quality, delivery, costs, customer experience and ultimately, profitability.Īs recently as 2017, a typical supply chain accessed 50 times more data than just five years earlier. Modern supply chain management systems are about much more than just where and when. While yesterday’s supply chains were focused on the availability, movement and cost of physical assets, today’s supply chains are about the management of data, services and products bundled into solutions.
Many supply chains have begun this process, with participation in cloud-based commerce networks at an all-time high and major efforts underway to bolster analytics capabilities. Latency is unacceptable in the supply chain of the future. Comprehensive: Analytics capabilities must be scaled with data in real time.Most of the supply chain is automated and self-learning. Cognitively enabled: The AI platform becomes the modern supply chain's control tower by collating, coordinating and conducting decisions and actions across the chain.Cyber-aware: The supply chain must harden its systems and protect them from cyber-intrusions and hacks, which should be an enterprise-wide concern.Collaborative: Improving collaboration with suppliers increasingly means the use of cloud-based commerce networks to enable multi-enterprise collaboration and engagement.Connected: Being able to access unstructured data from social media, structured data from the Internet of Things (IoT) and more traditional data sets available through traditional ERP and B2B integration tools.IDC’s Simon Ellis in The Path to a Thinking Supply Chain ² defines what is supply chain management by identifying the five “Cs” of the effective supply chain management of the future: The better and more effective a company’s supply chain management is, the better it protects its business reputation and long-term sustainability. The supply chain is the most obvious “face” of the business for customers and consumers. Manufacturers can confirm a product delivery date when the order is placed - significantly reducing incorrectly-filled orders.
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Analytical software tools help to dynamically allocate resources and schedule work based on the sales forecast, actual orders and promised delivery of raw materials. Improving the allocation of “available to promise” inventory.By using analytic software, similar forecasting techniques can improve margins, even for hard goods. Airlines, hotels and others with perishable “products” typically adjust prices dynamically to meet demand. At the end of the season, these products are typically scrapped or sold at deep discounts. Seasonal products have a limited shelf life.
Through data analysis, manufacturers may be able to anticipate the shortage before the buyer is disappointed. When a customer orders more product than the manufacturer can deliver, the buyer can complain of poor service. One way to further improve on this process is to analyze the data from supply chain partners to see where further improvements can be made.īy analyzing partner data, the CIO.com post ¹ identifies three scenarios where effective supply chain management increases value to the supply chain cycle: Retail shelves can then be restocked almost as quickly as product is sold. The industry standard has become a just-in-time supply chain where retail sales automatically signal replenishment orders to manufacturers. Effective supply chain management systems minimize cost, waste and time in the production cycle.