Using Data for Supply Chain Optimization
A high-performing supply chain keeps customers happy while ensuring profitability for a business. Today’s manufacturers and retailers are increasingly using data to optimize the supply chain for a competitive advantage. Many types of manufacturing companies—from automotive to tech hardware—have long relied on just-in-time supply chains to speed time to market and reduce storage costs. Retailers, both online and brick-and-mortar, are increasingly relying on the related concept of demand-based supply chains to reduce costs and improve customer satisfaction and loyalty.
To accomplish this, they must maintain a reliable flow of relevant, accurate data and have the ability to translate that data into actionable insights. This post examines the benefits of supply chain optimization, how organizations use data to optimize the supply chain, and the different data sources often used in supply chain optimization.
Why Supply Chain Optimization?
Manufacturers and retailers create millions of data points as a result of their supply chain operations. Supply chain optimization enhances efficiency and performance by utilizing data analytics, leveraging data from an organization's database and external sources. It helps companies to achieve several benefits.
Eliminate silos
Just-in-time and demand-based supply chains have made the entire supply chain optimization process even more complex due to continuous streams of data that are often stored in multiple locations. Siloed data prevents companies from having the visibility they need to identify the cause of problems and find opportunities for improvement. A governed, centralized data repository that can handle semi-structured and unstructured data enables teams to access all relevant data for easier analysis.
Be more agile
Adapting to changes such as new competitors, changes in consumer preferences, and supply chain disruptions is crucial for the well-being of a manufacturer or retailer. Data analysis can make it easier to anticipate changes and adjust your supply chain to stay competitive.
Meet customer expectations
Customers have more choices than ever before, and their expectations for hassle-free fulfillment have grown. That’s especially true in competitive markets. Companies that consistently work to optimize their supply chain strengthen their ability to meet and exceed the ever-increasing demands of customers.
Increase sustainability
According to IBM, more buyers are making purchases based on their values. Many buyers want assurance that the products they purchase are produced in a sustainable and ethical way, and they seek out manufacturers and retailers that have lowered their environmental impact and adopted ethical labor practices. Having access to an accurate, complete view of your supply chain makes it easier to pursue proactive changes such as shifting production methods to become more sustainable or pressuring a supply partner to improve its labor practices.
Achieve a competitive advantage
Being able to access and interpret data in real time powers better and faster decision-making. Having these capabilities gives organizations a significant competitive advantage over those focused on network design alone.
How to Optimize Each Link in the Supply Chain Using Data
Data has the power to transform your business’s supply chain by providing deep insights into each individual segment of your supply chain.
Sales, inventory, and operations planning
Modern supply chain optimization takes the planning process a step further than traditional supply chain management by integrating data from relevant internal and external sources to create a real-time view of the key factors shaping supply and demand. Capturing streaming data allows supply chain managers to analyze point-of-sale (POS), inventory, and production volume data simultaneously to easily spot misalignments in supply and demand trends. This information can inform when to put products on sale or launch new product offerings to harmonize consumer demand with current supply capacities.
Sourcing
Being able to predict supply disruptions and make adjustments before problems impact production is crucial to successful operations. Supply chain analytics gives companies the ability to identify and flag anomalies in supplier delivery patterns. Another application of big data to the sourcing process is the analysis of trending data on impending labor strikes, wildfires, severe weather, or financial insolvency that may negatively impact a supplier’s ability to deliver on time. Being able to predict and complete contingency planning ahead of time can help businesses maintain production goals and consumer product fulfillment.
Manufacturing
Making use of data in the manufacturing stage helps companies maintain high product standards. Real-time quality analysis using a system of integrated cameras and precision measuring devices can ensure each unit of production meets quality assurance standards before it is shipped to retailers or consumers. Identifying and fixing issues on the manufacturing line in real time avoids costly production reruns.
Warehousing
Forklifts outfitted with a range of onboard sensors can be put to work as real-time data hubs. Information collected on warehouse temperature, shelf weights, and weight being carried can be accessed instantly to provide valuable insights into worker productivity and inventory accuracy.
Transportation
Transportation companies were early adopters of analytics tools, using them to plan more efficient delivery routes, reduce fuel consumption, and increase product delivery volumes. Supply chain analytics can help businesses identify the best mode of transportation for their products and predict how quickly consumers will need them. Advanced data mining tools can even help predict when customers are most likely to be home, reducing the number of attempts it takes for a carrier to make a delivery.
Point of sale
Businesses occupying physical retail spaces have been slower than their online counterparts to adopt the use of advanced data analytics to optimize sales. However, supply chain analytics has much to offer brick-and-mortar retailers. By analyzing POS data trends, retailers can more accurately predict which products to display in high traffic areas and how to cluster related products together on the shelves to increase sales.
Data Sources for Optimizing the Supply Chain
The complexity of a modern supply chain produces massive amounts of data. The power of big data analytics lies in its ability to pull data from a variety of sources and then analyze and present it as an integrated whole.
Master product data: Information about each product and how the products relate to other products
Demand data: Historical sales information and data from demand forecasting and projections for future sales
Warehouse data: Information including warehousing contracts, available storage space, equipment, and staffing
Inventory data: Information involving the value, volume, and location of current inventory across multiple distribution points
Production data: Information on the entire product line and current production capacity for each product
Logistics data: Information regarding all areas of product transport, including deliveries to customers, transfers from one distribution center to another, and stock transfers from one location to another
Financial data: Financial information regarding the cost of producing, transporting, and warehousing products
External data: Third-party data sources, including weather data, consumer packaged goods (CPG) data, and more.
How Snowflake Drives Data Analysis for Optimizing the Supply Chain
With the Snowflake Data Cloud, companies can easily aggregate data from multiple sources in any format and ensure that it is fully governed for quality and security. Snowflake’s tools provide the flexibility needed to integrate and execute advanced analytics for the broad range of data sources relevant to the supply chain. As a result, manufacturers and retailers can gain comprehensive insights to drive performance and efficiency.
Accelerate the Optimization of Your Supply Chain
In the complex ecosystem of today’s supply chains, using data for optimization has never been more critical to a company’s ability to retain customers and stay profitable. Modern supply chain optimization provides compelling benefits, and manufacturers and retailers can count on significant ROI from deploying it.
See Snowflake’s capabilities for yourself. To give it a test drive, sign up for a free trial.