Supply Chain Efficiency
Paul Trudgian Ltd | Supply Chain & Logistics Consultancy No Comments

Supply chains have immense power over a business, whilst also serving it. The supply chain has the ability to make the business a success, but events in the supply chain also have the ability to do immense damage. In fact, if you look closely at some of today’s big ‘winners’ such as Amazon, Walmart, Samsung and Apple, they all have something in common: a first-class supply chain. Effectiveness in the supply chain drives business.

If we drive down deeper into the success of each of these supply chains, what we see is another common theme: first-class technology. A successful supply chain operated with immense visibility can be incredibly efficient. The data provided by the technology within the supply chain drives visibility, which drives efficiencies, which in turn drives success. Harnessing the power of data is the pivotal point for success in a modern supply chain.

Why is Data Visibility Important?

Number-crunching has always been important to supply chains. We know that’s where profit margins grow or shrink. However, the margins within supply chains are now incredibly tight, and consumer expectations higher. This means that for efficiencies to be maximised, data must be visible, actionable, and accessed in real-time. Accurate real-time data allows powerful insights which form the bedrock of successful decision-making.

This is even more important in the modern market place because of the complex nature of supply chains today. A modern supply chain is multi-layered, and has a complex network of relationships. There are so many factors affecting different elements of the chain that without technology providing the data and insight, supply chains are unwieldy beasts. Managing the interconnected relationships between stakeholders and suppliers is so complex that we need technological input. In so doing, we remove the different pockets of information and give visibility and clarity to all. The result is increased efficiency.

Data Should Also Be Multi-Layered

To really benefit and drive the success of a business, the data we collect and utilise should effectively leave no stone unturned. It cannot simply work on a linear basis, but must inter-feed to each other across the multi-layers of the supply chain. Data can, and does, bring enormous benefit not only when it travels up and down the supply chain, and the levels in the organisation, but also across them too.

The ultimate goal of data collation, and the technology which drives it, is to create real and powerful insight in to every facet of the supply chain – in real-time. This way you can see where the heaviest demand lies, and where pressure problems are occurring, and also help to forecast future demand. Efficiencies can then be maximised by appropriate decisions according to the real picture of what’s going on. The result is that a business can plan more effectively, and more accurately.

Visibility enables businesses to be more agile and flexible, and therefore able to adapt to happenings within the supply chain. This can happen in a variety of different ways. For example, shop floor data on sales performance can feed through to adjustments in everything from ordering to logistics. It can also happen the other way around, when something such as a new product launch will affect demand, and how this can be fed down to the shop floor.

Perhaps the most powerful way to use data of this calibre to maximise operating efficiencies is within the realm of inventory management. We’re used to the simple use of data for minimising too much or too little stock, but more insightful data can give us a better picture. For example, it might show very specific differences in locations which can then be used for accurate forecasting. Balancing inventory levels at the perfect level of not too much and not too little, is hard work, despite making sound sense. It helps to keep costs low whilst maximising efficiencies and profits.

How Data Helps in Problem Areas

The use of valuable data can also assist retailers as they work out their own store planning. They can use data to establish constant supply in their most profitable product lines, and in location specific stores. Efforts can be concentrated where the most opportunity for success is. In this way, retailers can maximise and increase sales, and thus profitability.

Returns are also often a logistical and financial nightmare for retailers. Insightful data can help to reduce these and bring efficiencies to the returns process. Returns problems ripple up through the chain, so creating efficiency here through visibility should greatly aid the whole business. If retailers know more accurately which products to drive because of their performance, then they can target sales accordingly. What was once an art in retail is becoming more of a science.

Other pinch points in supply chains include labour and logistics. Knowing where best to place staff is no longer down to presumptions and guess work, but instead is based on real quantifiable data. Both labour and logistics can be managed more efficiently whilst also ensuring consumer demand is met.

Using Data in Supply Chains

Efficiency in different operations within the supply chain is driven by, and drives, predictability. Using data to eliminate or vastly reduce uncertainty can help to reduce the danger of disruption in the supply chain. It involves looking right to the beginning and end of a supply chain, and all points in between. The entire operation therefore benefits from operating efficiencies and increased visibility.

There are a number of barriers which prevent businesses utilising data in this way, such as cost and technological understanding. However, improving visibility is only possible through the adoption of the right technology and using it appropriately. If you need to gain powerful insight in to the data affecting your supply chain, the supply chain consultants at Paul Trudgian can help.

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