‘Big Data’ is a commonly used term, but what exactly does it mean and what benefits can it bring to supply chain management?
In the paper Undefined By Data: A Survey of Big Data (Cornell University Library, September 2013), Jonathan Stuart Ward and Adam Barker of the University of St Andrews define big data as follows:
“Big data is a term describing the storage and analysis of large and or complex data sets using a series of techniques including, but not limited to: NoSQL, MapReduce and machine learning.”
Combining the latest analytical tools with the complex data now available could bring a new level of innovation to the supply chain sector.
5 Key Benefits to Harnessing the Power of Big Data
1. Enhance Customer Experience
Analysis of more varied data types, including social media data, can be used to improve the customer experience. For example, analysis of customer feedback regarding delivery and returns helps the company better understand the customer and offer an improved user experience, as well as introducing greater efficiencies and reducing waste.
2. Increase the Ability to Forecast Demand More Accurately
Instead of relying on the same rigid systems and inexact predictions from the sales team, companies now have access to huge and complex amounts of data from various sources, including suppliers and customers.
Advanced analytical tools can be employed to integrate data from a range of systems and, combined with external factors such as weather forecasting, competitors’ behaviour, and pricing, will significantly enhance the ability to forecast demand.
3. Solve More Complex Distribution Network Problems
Most complex distribution networks have developed organically over time into an almost impenetrable web of factories, warehouses, and distribution hubs which can struggle to adapt quickly to changing patterns of demand.
Companies can deal with this complexity more easily than in the past with the use of big data analysis. Big data provides the opportunity to solve much more complex distribution network problems by modelling outcomes in more detailed scenarios than ever before.
4. Improve the Efficiency of Delivery Route Planning
The huge amount of location data which is now available, combined with the latest advanced techniques in geo-analytical mapping, allows companies to model a greater number of potential routing scenarios as well as visualise those routes more dynamically at street level.
5. Develop Greater Collaboration in Your Supply Chain Network
The increased amount of data available to supply chain managers should be seen as an opportunity to improve the management of more complicated networks of suppliers and to develop greater collaboration.
Getting the most out of big data naturally requires an investment in technology, but also a culture change. Staff across different business functions need to be involved in the process of identifying which data is useful to them.
For example, it is very important to the supply chain function to have reliable manufacturing data so staff from manufacturing as well as other teams must be involved in the process of data collection.
Supply chain managers need to highlight the negative effect of poor data and place a high value on the collection of consistent, high-quality data at a strategic level. Valuing and rewarding staff who maintain a high standard of data collection is as important as investing in the latest analytical techniques.