A growing concern that many supply chain leaders have with implementing the Internet of Things into their operational systems and processes is that it could expose their companies to heightened levels of security risk. Such worry is understandable, considering security breaches are one of the major disruptions that threaten supply chains. However, there are many ways that supply chain data and analytics can be used to improve performance, increase visibility and transparency and, ultimately, enhance the overall success of an organization.
Data science of supply chains
A recently published white paper, commissioned by DHL, examined the role of data science in supply chains and predictive enterprise. This paper, written by Iharrington group LLC President Lisa Harrington, indicated that businesses are sitting on a gold mine of data that they are not using to their advantage and that it can be harnessed to gain an edge over competitors.
In the report, Harrington said that there has been more data created within the past couple of years than ever before. Harrington added that companies can greatly benefit by collecting data from their supply chains because this is where so much information stems from and is the area of business that has the greatest influence over the other ones.
And, while this is true for the majority of organizations, not enough corporations are effectively using this essential data to their advantage. Tools such as data mining, analytics and pattern recognition are certainly not new to the business environment. However, how this information can be utilized exactly is something many enterprises are still trying to figure out.
Harrington reported that a survey conducted by Accenture revealed almost all, or 97 percent, of business executives feel they know how the use of data analytics can be beneficial to supply chains, yet only 17 have actually integrated analytics into a function of their supply chains.
So, in what ways can data and analytics be used to improve supply chains?
Benefits of analytic tools
One area analytics can help with is supplier relationships. According to Shelly Dutton, a contributor to Business 2 Community, "this information can improve decision-making on supplier selection, contracting and monitoring. With the emergence of advanced data collection and analytical tools, companies can expand their scope of research across a broader population of transactions rather than data samples."
In addition, the source added, data and analytics tools can be used to gain a deeper look into supply chain operations by auditing labor practices, ensuring they are meeting safety and compliance standards and are maintaining a business that is socially and environmentally responsible. These systems can also be leveraged to reduce the risk of fraud in supply chain networks and minimize the chance of disruptions.
To effectively utilize business intelligence and data analytics to improve supply chain operations, many industry experts recommend partnering with people in the market who can offer a comprehensive understanding of such information to provide businesses with the needed guidance.