10 ways big data is revolutionizing supply chain management
Forward-thinking manufacturers are orchestrating 80% or more of their supplier network activity outside their four walls, using big data and cloud-based technologies to get beyond the constraints of legacy enterprise resource planning (ERP) and supply chain management (SCM) systems. For manufacturers whose business models are based on rapid product lifecycles and speed, legacy ERP systems are a bottleneck. Designed for delivering order, shipment and transactional data, these systems aren’t capable of scaling to meet the challenges supply chains face today.
Choosing to compete on accuracy, speed and quality forces supplier networks to get to a level of contextual intelligence not possible with legacy ERP and SCM systems. While many companies today haven’t yet adopted big data into their supply chain operations, these ten factors taken together will be the catalyst that get many moving on their journey.
The ten ways big data is revolutionizing supply chain managementinclude:
- The scale, scope and depth of data supply chains are generating today is accelerating, providing ample data sets to drive contextual intelligence. The following graphic provides an overview of 52 different sources of big data that are generated in supply chains Plotting the data sources by variety, volume and velocity by the relative level of structured/unstructured data, it’s clear that the majority of supply chain data is generated outside an enterprise. Forward-thinking manufacturers are looking at big data as a catalyst for greater collaboration. Source: Big Data Analytics in Supply Chain Management: Trends and Related Research. Presented at 6th International Conference on Operations and Supply Chain Management, Bali, 2014
- Enabling more complex supplier networks that focus on knowledge sharing and collaboration as the value-add over just completing transactions. Big data is revolutionising how supplier networks form, grow, proliferate into new markets and mature over time. Transactions aren’t the only goal, creating knowledge-sharing networks is, based on the insights gained from big data analytics. The following graphic from Business Ecosystems Come Of Age (Deloitte University Press) (free, no opt-in) illustrates the progression of supply chains from networks or webs, where knowledge sharing becomes a priority.
- Big data and advanced analytics are being integrated into optimisation tools, demand forecasting, integrated business planning and supplier collaboration & risk analytics at a quickening pace. These are the top four supply chain capabilities that Delotte found are currently in use form their recent study, Supply Chain Talent of the Future Findings from the 3rd Annual Supply Chain Survey(free, no opt-in). Control tower analytics and visualization are also on the roadmaps of supply chain teams currently running big data pilots.
- 64% of supply chain executives consider big data analytics a disruptive and important technology, setting the foundation for long-term changemanagement in their organizations. SCM World’s latest Chief Supply Chain Officer Report provides a prioritisation of the most disruptive technologies for supply chains as defined by the organisations’ members. The following graphic from the report provides insights into how senior supply chain executives are prioritizing big data analytics over other technologies.
- Using geoanalytics based on big data to merge and optimise delivery networks. The Boston Consulting Group provides insights into how big data is being put to use in supply chain management in the article Making Big Data Work: Supply Chain Management (free, opt-in). One of the examples provided is how the merger of two delivery networks was orchestrated and optimized using geoanalytics. The following graphic is from the article. Combining geoanalytics and big data sets could drastically reduce cable TV tech wait times and driving up service accuracy, fixing one of the most well-known service challenges of companies in that business.
- Big data is having an impact on organizations’ reaction time to supply chain issues (41%), increased supply chain efficiency of 10% or greater (36%), and greater integration across the supply chain (36%). The Big Data Analytics in Supply Chain: Hype or Here to Stay? Accenture Global Operations Megatrends Study found that companies are achieving significant results using big data analytics to improve supply chain performance and gain greater contextual intelligence.
- Embedding big data analytics in operations leads to a 4.25x improvement in order-to-cycle delivery times, and a 2.6x improvement in supply chain efficiency of 10% or greater. Accenture found that embedding big data into supply chain operations accelerates supply chain processes a minimum of 1.3x over using big data on an ad hoc basis. Source: Big Data Analytics in Supply Chain: Hype or Here to Stay? Accenture Global Operations Megatrends Study
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