Oiling Up Supply Chains with Big Data

ISSUE #58 –

“Big data can help by providing unprecedented end-to-end supply chain visibility.“

Supply chains have exponentially become global, complex and segmented, with companies being forced to manage higher service level expectations while reducing costs. This has a twofold effect: a pressing need for more control over, or visibility into, supply chains, and a massive spike in big data being generated. This situation in itself presents a golden opportunity: harnessing the power of big data can help organisations to make faster, more intelligent decisions, leading to reduced risks, improved operational performance, and end-to- end supply chain visibility.

**FILE** In this Dec. 1, 2008 file photo, an Amazon.com employee grabs boxes off the conveyor belt to load in a truck at their Fernley, Nev., warehouse. Amazon.com Inc. said Friday, Dec. 26, 2008, that the 2008 holiday season was the online retailer's "best ever," with more than 6.3 million items ordered and 5.6 million units shipped during its peak day on Dec. 15. (AP Photo/Scott Sady, File)

Big data is a set of techniques and technologies that require new forms of integration to uncover hidden values from diverse datasets that are too massive and complex to be managed using traditional architectures such as Enterprise Resource Planning and Advanced Planning and Scheduling. Although these tools improve the supply chain response, they are enterprise-centric and cannot perform inter-organisational processes, helping to promote visibility only within the enterprise but not across the supply chain.

END-TO-END SUPPLY CHAIN VISIBILITY VIA BIG DATA

Big data can help by providing unprecedented end-to-end supply chain visibility into every granular process or transaction. This can enable a predictive insight into supply chains – instead of just triggering an alert, the system will assess priorities, weigh options and make corrective decisions automatically.

SMOOTHER SUPPLY CHAIN BASED ON CUSTOMER BEHAVIOUR PREDICTIONS…

Supply chain leaders are beginning to embed big data in their operations resulting in improved decision making and increased responsiveness.

For instance, Amazon has patented a process they have termed as anticipatory package shipping, a predictive shipping and distribution method wherein a firm uses predictive analytics to forecast future sales; they then source and ship products to local and regional distribution centres in advance of those orders. The process is driven by big data wherein customers’ previous orders, product searches, wish lists, time spent on product page and so on, help Amazon understand what the customers want even before they know it.

Macies

… AND REAL-TIME CUSTOMER DATA

Considering the increasing customer expectations regarding cheaper, quicker and more reliable service levels, big data helps manufacturers and retailers manage speed and customisation by tailoring operations to match realtime market conditions for operational excellence. In fact, recent research highlights improved customer experience and supply chain visibility among the top three categories that can benefit from big data.

Retail giant Macy’s has deployed sensors based on Apple’s iBeacon technology throughout its stores. As customers walk around to parts of the store, the sensors present relevant deals on their smartphones. The sensors also collect feedback data based on customers’ responses, helping Macy’s make relevant changes to its assortment. Capturing the customer demand in this manner impacts inventory and omni-channel strategy, which consequently reflects in the supply chain.

Big data has already started altering how businesses function, but more importantly, it will change what businesses are. Entering into an age where business divisions, or silos, are breaking down, interbusiness relationships are set to change. Businesses need to change the traditional mindset and think beyond the confines of their individual processes, relying more on the functioning of the whole ecosystem of various partners in the supply chain. Increased visibility among partners will encourage collectively exploring new business opportunities.

Making the supply chain ecosystem focused and data-driven will keep proving critical to enjoying the substantial benefits expected in the big data era.

 

By Frédéric Gomer, Managing Director, B2G Consulting

 

Article published in the FOCUS Magazine “New Links in the Supply Chain” – September 2015