In most companies, the supply chain is viewed as a mission-critical system. In the very best performing companies, the supply chain is seen as a strategic weapon with which to club the competition and drive shareholder value. The type of meltdown experienced in the financial sector should have companies begging the question: Are we getting all the necessary intelligence from our supply chain system to make the best decisions for our business?
There are many individual things you need to do well in order for your supply chain to become a competitive weapon. But, in the end, they all boil down to combining “information” (the communications or receptions of knowledge) and “intelligence” (the ability to apply knowledge to manipulate one’s environment as measured by objective criteria). This combination is what is commonly referred to as supply chain intelligence. Supply chain professionals can leverage the power of this insight to unlock information they previously could not access, giving their companies a tremendous competitive advantage.
First, identify what information matters most
Companies’ supply chain systems create an impressive amount of data. However, there’s not any value in loads of data if you can’t access it or understand it. The biggest obstacle in managing this amount of data involves identifying the information that matters and then seeing that the same meaningful information gets to all the individuals who need it to make the best decisions for your company.
Some of the more common challenges that companies face when it comes to business intelligence for the supply chain are:
- What is just operational reporting and what is true business intelligence and analytics?
- Which data is needed in real time and which data can be updated less frequently?
- What data should be retained over time to analyse and measure supply chain performance?
- Users don’t have to use business intelligence tools to do their jobs, but they do have to use them to do them more effectively. How do you get that message across and incent them to use tools?
- Are the business intelligence tools easy enough to use and yet powerful and flexible enough to be worth using?
- Business intelligence typically relies on attribution and classification data on master (i.e. item) and transactional (i.e. shipment) objects and will not be useful if this data is absent or inaccurate.
Build intelligence through content AND capabilities
Supply chain intelligence is all about bringing together content and capabilities. “Content” is all of the data held in various data structures and the various pre-defined reports or views over that data. “Capabilities” include all of the tools that allow users to access the data and create new ways of accessing it (i.e. new “content”).
Examples of content include:
- Picking data
- Receiving data
- Shipments data
- Labour performance data
- Pre-defined reports, metrics (sometimes referred to as key performance indicators or KPIs), events/alerts
The key with data is organising it into subject matter areas familiar to supply chain users. There are two important types of data within each of these subject matter areas. The first is measures/KPIs that represent the actual business performance. The second is the dimensions of analysis – the ways the measures/KPIs can be analysed (i.e. by item, by supplier, by location, by product class, etc.)
On the other hand, capabilities are organised into three layers within a fully functional architecture in a supply chain intelligence solution:
1. Content storage — This is where all the business data and the specifications of the various types of objects that access the business data are kept (along with configurations, user data and system data).
2. Content analysis and configuration — This set of tools allows users (with varying levels of training and skills depending on the tool involved) to create new ways to view and evaluate the data (i.e. new reports, analysis views, scorecards, dashboards, metrics, events, etc.).
3. Content access tools — This represents the various ways that users can access supply chain intelligence-via the Web, via Microsoft Office or via mobile devices.
Examples of major capabilities within a comprehensive supply chain intelligence system include:
- Report writer
- Ad-hoc data query tool
- Metric and event/alert definition tools
- Trading partner access
- Microsoft Office integration
Maximise value by developing supply chain vision
In order to create a broad vision that both maximises value for your company as well as makes that value achievable, supply chain intelligence should ideally be:
- Pervasive — Use business intelligence everywhere it makes sense in the supply chain.
- Seamless — Weave business intelligence into the fabric of your users’ operational processes.
- Filled with broad and rich information — Cover all relevant subject areas and provide comprehensive measures/KPIs and dimensions of analysis.
- Best-practice driven — Standardise on well-accepted metrics for measuring supply chain performance.
- Highly configurable — Allow individual users to make it their own solution to meet their specific needs.
- Quick to deploy — Ensure initial implementation is fast (weeks, not months) and make it very easy to administer on an ongoing basis.
- Easy to use — Users should need no more than an hour or two of training to get good value from the solution.
- Highly visual — With so much data inherent in a business intelligence solution, rich visualisation is essential to get information from the mass of data quickly.
- Accessible anywhere — On the PC, in Microsoft Office or on a mobile device (e.g. smart phone) — supply chain users are often not tied to their desks but may be on the warehouse floor, in the yard or traveling.
- Available to your extended eco-system — It’s not just your internal users that need the information — trading partners also need to know how they are performing.
- Highly scalable — Supply chain business intelligence generates huge amounts of data on a daily basis that has to be quickly organised, categorised and accessed.
- Low cost — Leverage the hardware and third-party investments that you’ve already made with operational supply chain systems (e.g. warehouse management, transportation management, etc.).
- Globally deployable — The supply chain is global, whether it’s internal users or trading partners — and not everyone speaks English.
- Technologically advanced — Build on a service-oriented architecture (SOA) so that components of the solutions can be quickly combined with other systems to deliver new solutions (i.e. mashups/composite applications).
Effectively manage costs, customer service and productivity
Business intelligence is the ultimate tool for supply chain analysis because, when used appropriately, it can significantly impact the activities that directly affect costs, customer service and productivity. Proactive companies that implement a supply chain business intelligence system can expect to benefit with the new-found ability to:
- Respond to user needs for timely data;
- Improve supply chain decision-making;
- Keep up with the increasing complexity of reporting;
- Effectively manage trading partners; and
- Leverage the investment in sophisticated supply chain management systems.