Procurement management is a multi-faceted practice, involving accounting, risk assessment, distribution planning and other factors.
Diverse processes can breed complications, especially when companies are trying to get accurate answers to the following questions:
- How likely is it that a supplier will sustain operation setbacks due to social or political fluctuations, infrastructure disruptions or consumer demand?
- In the long term, how much is it going to cost to produce, market and sell particular goods?
These queries can be better assessed with data analysis software.
Taking a predictive approach
Supply chain leaders want to be able to precisely anticipate demand before it even occurs. It's a capability that seems supernatural, but one shouldn't underestimate just how refined today's analytics programs really are.
Apparel Magazine contributor and GS1 US VP of Apparel and General Merchandise Melanie Nuce noted that gaining insight into which products will be popular among target audiences involves scrutinizing not only sales, but a variety of elements, such as:
- Cultural fluctuations regarding certain demographics
- Social media posts that comment on particular goods and services
- Location-based hardware that measures how certain people browse for items
- Loyalty programs capable of displaying which products people tend to use rewards on
Basically, there are innumerable sources from which organizations can aggregate data. When scrutinized from the appropriate angle, retailers can learn from the information presented to them and put those realizations into action.
Consider how enterprises are using in-store mobile coupons to generate revenue. Experts didn't simply decide on a whim to implement such a service, they anticipated that consumers would like to receive them. Nuce referenced a study conducted by Accenture, which surveyed 6,000 consumers from eight countries. A large majority (88 percent) asserted they wouldn't be opposed to aggregating loyalty points as they shopped.
Deployment is becoming a priority
Mark Peason, senior managing director at Accenture and contributor to IndustryWeek, noted 97 percent of executives comprehend how data analytics will impact their procurement and distribution operations. Although only 17 percent of those surveyed noted they already have an analytics strategy implemented, three out of 10 executives intend to deploy such an approach in their organizations.
Interest in the technology is burgeoning because of how diverse supplier relationships are becoming. A manufacturer may procure products from as many as 1,000 companies both directly and indirectly. With this complex web of connections comes different sets of concerns and considerations. Weighing them to determine how they'll affect profits is easier with the help of advanced computing algorithms.