Unlocking the Invaluable Role of Big Data in Modern Supply Chain Management
The burgeoning big data landscape is set to transform a range of industries over the coming years, and for global supply chains in dire need of more comprehensive levels of transparency and optimization, the data revolution couldn’t come soon enough.
The global big data analytics market size already swelled to a value of $307.51 billion in 2023 and is expected to grow to $924.39 billion by 2032, representing a CAGR of 13% over the forecast period.
Today, global supply chains can suffer from myriad inefficiencies that hinder their performance with troubling consequences. Factors like regulatory compliance, quality control, tracing faulty goods, and the ability to manage vendors can all cause disruptions that may hinder vendor relationships and adversely impact customer satisfaction.
Environmental and geopolitical factors have also caused fresh turmoil in supply chains in recent months, with conflict in the Middle East impacting routes through the Suez Canal while drought is actively slowing the passage of goods through the Panama Canal.
Although digital transformation in supply chains can’t actively reverse the impact of climate change, it can help to offer efficient solutions that counter the slowing and costly effects of disruption for global organizations. But how can firms maintain their productivity through data? Let’s take a deeper look at the scale of impact the big data revolution can have on global supply chains and vendor management:
Next-Generation Forecasting
Forecasting empowers organizations to anticipate emerging problems or issues that could impact supply chain performance in the future. Big data processes like predictive modeling and trend forecasting can provide companies with stronger insights in anticipating customer spending, emerging trends, and wider market changes.
There are three key areas where next-generation forecasting will pave the way for more supply chain efficiency, and they include:
– Anticipating demand: Here, big data can be utilized to create predictive models through the analysis of historical data and market trends that anticipate customer behavior and seasonal trends to efficiently manage inventories and deliver personalized experiences for customers.
Data suggests that this already has a positive impact on brand performance, and a recent McKinsey report suggests a 115% higher ROI and 93% higher profits can be achieved by companies using customer analytics reports. Further down the supply chain, manufacturers and shipping firms can use these analytical models to predict production demand and delivery analytics.
– Optimizing inventories: Because big data analytics can help to forecast demand fluctuations and seasonality patterns, it can also utilize reservoirs of historical sales data, current inventory levels, and future demand forecasts to analyze and determine the optimal inventory rates for every product’s business stock.
We’ve already seen retail giants like Amazon embrace big data for this purpose and to simplify key decision-making processes.
– Mapping production: Big data can streamline production schedules by actively monitoring machine utilization, the availability of staff, and the accessibility of materials. By integrating this data from production systems and a variety of other sources, it’s possible to achieve a fully optimized production process that limits idleness and bolsters efficiency on a comprehensive scale.
For a more holistic supply chain overview, companies can partner with logistics firms that can deliver more supply chain resilience models along with more alternative solutions.
With many supply chains impacted by issues in the Suez and Panama canals, the merits of utilizing a logistics firm that can accommodate the hard-to-predict disruptions and drawbacks like geopolitical events, extreme weather, and any other form of disruption and offer a multimodal alternative is clear.
Integrating Artificial Intelligence
Big data has an intrinsic relationship with artificial intelligence, and we’re already seeing the development of a key focus on data reliability and relevance among companies seeking to optimize supply chains through AI.
Here, it’s essential to achieve lower latency and utilize data that can be rapidly analyzed to deliver more real-time decision-making.
Artificial intelligence can also be an asset for active compliance management to help brands stay in tune with their values by actively vetting the companies within a supply chain and their processes.
In the future, we can expect AI and data analytics to become better integrated with different forms of structured and unstructured data, and this will help businesses make use of logistics data directly to improve supply chain management.
The beauty of AI in the data management process is that generative tools can help to provide data in a variety of different formats, including image files and PDFs, which can be more effectively utilized by various tools for recognition and understanding.
Leveraging a Transparent Supply Chain
One area where big data can excel in supply chain management is through the transparency it affords supply chains from the top all the way down.
Through multifaceted data sourcing from suppliers, warehouses, transportation providers, and customers, businesses can obtain real-time insights into live inventory levels, shipment statuses, and demand patterns, which can then be actively monitored through artificial intelligence programs.
These transparent measures are already in use today among leading retailers, and Walmart actively leans on big data analytics to monitor product sales and inventory levels to restock shelves at a pace that’s consistent with delivery forecasts and supplier production rates–helping to actively save costs and uphold the strongest levels of customer satisfaction.
In addition, a recent study by Capgemini found that companies investing in real-time supply chain visibility can benefit from a 50% reduction in instances of out-of-stock inventory and a 10% improvement in perfect order delivery.
Unprecedented Chain Management
Big data can also optimize existing processes at an unprecedented level. While it can leverage fresh efficiency throughout the production of goods and inventory levels, these insights can also help to cut costs significantly and drive efficiency when it comes to delivery fleet management.
Here, data can optimize route deployment, delivery schedules, and item location to help customers receive their orders faster without vehicles having to repeat preventable processes over and over.
UPS has utilized this perk of big data exceptionally well within its shipping processes. Radars and sensors are used to capture data as packages move throughout the supply chain, while big data insights optimize driver routes to ensure that packages arrive by their expected date. This has helped UPS to save 1.6 million gallons of gasoline in their truck each year, saving costs across the board.
Likewise, big data brings efficiency to businesses in managing vendors. Intelligent payout solutions backed by real-time reporting and analytics can help streamline the vendor management process and ensure that all facets of a supply chain are paid for their work in a way that enhances liquidity and improves relationships throughout the chain.
Here, payouts can be leveraged on the delivery of goods in a fully compliant manner to deliver automation to time-consuming processes backed by data analytics.
Unlocking Supply Chain Efficiency
Emerging technology like big data analytics is helping to transform the operational efficiency of companies across a variety of industries. Digitalization within supply chains can help companies make more intelligent decisions while tracking emerging trends to ensure that nobody misses a beat when inventory demands or requirements change.
As big data continues to become more sophisticated, its functionality within the supply chain will grow. This will help businesses avoid the pitfalls of inefficient chains in the future and continue delivering for customers in a semi-automated manner.
Source : hackernoon.com
