How Business Intelligence Optimizes Supply Chain Management
In the wake of the pandemic lockdowns in America, all eyes are still on the supply chain. As inflation rises and products become more difficult to come by, consumers are wondering what will be available on the shelves next time they go to the grocery store. Supply chain intelligence — the application of data analytics and predictive analytics to a company’s supply chain — can help mitigate these issues by empowering companies to understand the supply chain of their products and communicate clearly with their customers.
As companies grow their business intelligence capabilities to help store, sort, and study historical organizational data, their ability to make product, marketing, and strategic decisions grows as well. When it comes to the supply chain, key categories from warehouse management to supplier coordination have been enhanced through the use of business intelligence.
Supply Chain Intelligence in the Real World
McKinsey & Company found that companies that leverage a strong business intelligence solution to improve their supply chain operations have reduced supply chain costs by 10 percent and seen inventory reductions up to 25 percent. Statistics and stories alike make clear that supply chain operations are made more efficient and effective through business intelligence.
Demand and Inventory Management
When the COVID-19 pandemic hit and demand for medical supplies surged at unprecedented rates, Australian corporation Team Medical Supplies had an ethical dilemma on its hands. As the supplier of thousands of medical centers throughout the country, their products like masks, sanitizers, and thermometers were hot commodities.
But it wasn’t just their current clients who had increased needs. Instead, unknown suppliers who did not meet Team Medical Supplies’ quality standards were approaching them to buy in bulk quantities. They were willing to pay higher prices, presumably because they were going to sell the products for a greater markup themselves, taking advantage of the high need.
Team Medical Supplies leveraged their business intelligence solution to audit buyers. Rather than responding in the moment to anecdotal evidence that they could make record sales in the short-term, they responded to the 400% demand at 110% supply they were facing by staying loyal to their existing customers and staying aligned with their typical purchasing patterns.
Supply chain data played a primary role in equipping company leadership to make wise, level-headed decisions in a highly volatile and frightening time. By relying upon their data analytics, Team Medical Supplies was able to manage their inventory to the best of their ability.
Distribution and Communication Management
One of the most powerful aspects of business intelligence is the way it can provide a comprehensive view of an organization. When it comes to the supply chain, disruptions affect everything from corporate strategy to consumer communication on social media. Supply intelligence solutions can reduce errors, facilitate communication between distribution centers, and provide transparency that keeps distribution running smoothly.
At Bata India, India’s largest footwear manufacturer and retailer, for example, distribution and communication were a major problem. Each of their distribution centers had a siloed warehouse management solution that could not communicate with the solutions at the other distribution centers. Daily operations and warehouse processes were struggling to run smoothly.
Enter a cloud-based business intelligence solution that centralized communication across the distribution centers. This shift had remarkable effects, including:
- 17% increase in stock availability
- 51% in shoe inventory at retail stories
- 99.9% inventory accuracy
Additionally, the company was able to reduce their labor costs and optimize their physical space. Managers of the distribution centers could now better communicate with their teams and encourage better performance based on data analytics.
With a business intelligence solution that provides a comprehensive view of an organization, companies can make meaningful strides toward optimizing their supply chain management.
Supplier and Vendor Management and Coordination
While supply chain intelligence is incredibly useful for managing inventory, demand, distribution, and communication, its capabilities do not end there. One of the key factors of supply chain management is coordinating suppliers and vendors, which a business intelligence solution can greatly enhance.
Take real, fast food favorite Chipotle, for example. Thanks to a cloud business intelligence solution, Chipotle was able to maintain and even improve its supplier relationships during the COVID-19 pandemic. When the pandemic first struck the states, the data analytics told Chipotle that they should forecast a 30% reduction in supplies rather than a complete shutdown. Suppliers were pleasantly surprised — and Chipotle was right: as online orders began to surge, they needed suppliers who were providing ingredients based on data rather than guesswork.
Chipotle leaders also note that supply chain intelligence empowers them to keep their suppliers informed of the company’s vision going forward, including areas such as capital investments and infrastructure.
“We can get everyone — our team and all our suppliers — on the same page,” explains Carlos Londono, Vice President, Supply Chain at Chipotle.
Cear, concrete data not only helps companies reduce costs and increase efficiencies, it also helps them to build and maintain positive vendor and supplier relationships.
In the era of Amazon and dropshipping, packaging is a big deal to customers. Opening packages is no longer just a task, it’s an experience: one that millions of people watch others perform online through “unboxing” videos. Product reviews often include commentary on the quality of the packaging — especially if it was poor.
In addition to customer experience, packaging and shipping are major cost categories for most companies. Roger Wood Foods, for example, distributes more than 400,000 pounds of meat products each week. Being able to make company decisions and sales predictions based on product weights is essential to their business.
The company chose a food-specific business intelligence solution that allows them to navigate catch weights, make their workforce more efficient, and scan container license plates for information on each case it contains. This has several benefits for the company, including more accurate visibility into cost distribution.
Supply chain intelligence can have an immediate, positive effect on the present-day performance of organizations, and it also has tremendous capacity for forecasting future trends. Department store Dillard's, for example, implemented a business intelligence solution that leverages historical data to make inventory decisions.
“The number of inventory decisions being made each day would have required our merchants to be making a decision every 1.99 seconds,” says Maiga Bishop, Director of Business Intelligence and Analytics, Dillard’s, USA.
Large organizations like Dillard’s are not the only ones that can see major benefits realized in their supply chain operations. Fireclay Tile, a producer of sustainable ceramic and glass tiles, implemented a business intelligence solution that improved customer communication and increased leads by 400%. The company was also able to streamline their fulfillment. All of these improvements led to strong data and reporting that empowers the company to forecast more powerfully than ever before.
Supply Chain Professionals Are in Demand
Between all of the exciting advancements in supply chain intelligence and the visible need for strengthened supply chains on store shelves, it is no wonder that the supply chain profession is projected to grow rapidly over the next ten years.
The Bureau of Labor Statistics predicts a 30% increase in roles for logisticians (professionals who analyze and coordinate organizational supply chains) between 2020–2030.
The good news doesn’t stop there. According to the Association for Supply Chain Management’s 2021 Supply Chain Salary and Career Report:
- The median salary for supply chain professionals is $86,000 annually.
- The pay gap between men and women in supply chain management has closed for those under 40.
- Supply chain professionals enjoy fast job placement, high job satisfaction, and promotion opportunities.
Professionals who are interested in management roles that integrate business intelligence with the supply chain are likely to find a wide range of job opportunities as the field continues to expand and evolve.
Become a Supply Chain Leader
Do you want to discover key insights in historical company data and make strong, data-driven decisions? Are you interested in a career that focuses on the role of analytics in supply chain management? The Online Doctorate of Business Administration (DBA) - Business Intelligence at Marymount University will equip you to optimize supply chain management as a data-driven leader.
The fully online DBA in Business Intelligence prepares students to apply their knowledge of data analytics to supply chain management. The program is cost-effective, can be completed in as few as three years, and features a robust network of students, alumni, and faculty who are accomplished and supportive.
Designed to elevate student understanding and agility at the intersection of business, data, innovation, and technology, the DBA in Business Intelligence features coursework in key supply chain management topics, including:
- Strategy in a changing business climate
- Maximizing digital transformation
- Ethical leadership for success in uncertain times
Students complete an applied research project in the form of a dissertation, allowing them to focus their studies on a topic specific to their career aspirations.
Earning a DBA in Business Intelligence will provide you with the strategic mindset and skills necessary to be a supply chain leader in any organization.