The Supply Chain Side of Business Intelligence
Getting a 360-degree view of their supply chain is critical for manufacturers and distributors in today’s business world. With business intelligence – or BI – software, companies have unparalleled insight and visibility to their supply chain performance and can better understand how their company actually functions (versus how they expect it to), find ways to optimize vendor relationships, as well as monitor the myriad of factors that impact supply chain performance.
Here are three things that business intelligence software can do for the supply chain:
Plan What the Supply Chain Should Do
It is a well-established fact that improved supply chain forecast accuracy leads to many improvements in operations, customer service, and asset management. Today’s predictive business intelligence analytic applications offer statistical forecasting down to the product SKU level. This helps manufacturers better optimize their inventory levels (as well as order needs) on a product-by-product basis. Companies can also use BI to determine safety stock levels and the best re-order points for each product, which in turn optimizes customer service levels because the most popular products are always in stock. With better forecasting, manufacturers can also measure supplier variability to identify which vendors you can count on to fit into your supply chain at the right price and on-time.
Evaluate Supply Chain Performance
By leveraging business intelligence analytics, supply chain performance can be evaluated in a number of areas such as Inventory, Purchasing and Manufacturing. For instance, when machinery is down the supply chain can grind to a halt. BI software can be used to track equipment maintenance history to better plan and manage your future maintenance requirements. By seeing how your supply chain performs (or doesn’t perform) in different areas you can pinpoint weak spots, as well as opportunities for growth, in your supply chain that might otherwise have been missed.
Such operational analytics also allow organizations to drive cost reductions on the sourcing side, reduce sourcing cycle time and decrease assets on the balance sheet by helping them better manage spending and their supplier networks. For example, BI software lets manufacturers monitor vendor lead times, schedules and fill rates to reduce short deliveries and eliminate excess orders. The better understanding you have of how your supply chain works, the more control you have in the long run.
Monitor Supply Chain Variances
Because of the increased velocity of the supply chain, especially as supply chains go global, companies are recognizing that planning and analysis must be tightly integrated. As a result, there’s a growing use of event management (or exception management) to monitor actual performance against planned performance in real-time. With BI software, manufacturers can keep better track of orders, order status and work in process. Companies can also monitor the status of work orders so they can quickly pinpoint potential delays that may impact the supply chain. Where are the lags, the bottle necks, and the pain points in your supply chain? What areas underperform while others function as expected? What causes those discrepancies?
With an end-to-end BI software solution for the supply chain, manufacturers and distributors can more readily find insightful analytics that drive a more intelligent enterprise.