Predictive & Prescriptive Analytics
Are You Playing the Blame Game with Your Supply Chain?
Do you blame your inventory manager when you are unable to meet an order due to a shortage? Do you blame your Tier 1 supplier when the real issue is missing components from their supplier? Does your customer blame you for a shortage and seek to back charge you?
There’s plenty of blame to go around. But supply chain management is everyone’s job. Get out of the blame game cycle. Empower your supply chain with the right information at the right time! Managing first level supply is only part of the story. Truly understanding your supply chain means understanding how a shortage or a delay upstream impacts your production and delivery schedule. So, what does it take to break the blame game cycle?
Analytics Is the Game Changer
Descriptive analytics tells you what’s happening. Ideally, you have a single point of view of real-time data easily visualized. Dashboards typically present your supply chain snapshot in a static view. And diagnostic analytics allows you to easily drill down into the root causes of problems in your supply chain by selecting for a specific detail. For example, check on how an order changed or when the parameters will be a problem. Identify when supply is short for demand. See what orders depleted all the inventory. Or determine where you have a shorted order in the details of an ASN.
You gain higher value with predictive analytics that ensure that you see what may happen. Access to the status of forecasts, orders, inventory, shipments, and other transactions allows you and your trading partners to better plan and adjust for unexpected events. Adding to your value, prescriptive analytics addresses what to do to avoid delays, shortages, etc. Setting up your business rules and/or using recommendations based on machine learning allows you to automate responses supporting better business decisions and driving positive outcomes.
Action Step #3:
Predictive & Prescriptive Analytics
In the post, “Five Actions Impacting Supply Chains in 2021,” we talked about a digitally transformed supply chain model. Action step 3 addresses using predictive and prescriptive analytics to guide decision-making. Executing step three provisions an agile and responsive supply chain giving your company the competitive advantage and mitigating the blame game.
Knowledge Is Power
Actually, the real power is in the recalculation of the analysis based on the arrival of new data and sharing the knowledge gleaned from that data across your supply chain network. For example, assume a steady-state where everything is calculated and you and your trading partners know where you are. Then, a participating member of your network introduces new data (a schedule change, an engineering change, a quantity change, etc.). When that data arrives, you recalculate whatever items apply and receive immediate notification of any issues the new data caused throughout the chain.
Imagine your network with a single view of supply chain data in real-time. That transparency and data flow enables order, inventory, and shipment visibility and supports a synchronized, responsive, agile supply chain and trading partner network. When you add alerts and notifications to the process, you and your trading partners gain the ability to respond to sudden demands, unexpected production issues, changes in supply, or transportation delays, and more.
It’s no fun to be blamed for a shortage or delay. You risk losing business, losing your leverage on pricing, or losing your credibility. Efficiency gains, improved fill rates, and reduced stockouts provide cost savings directly affecting your bottom line. Gaining higher levels of customer service ensures you maintain credibility, respond to problems before they become a customer issue, and remain highly competitive—all impacting your top line.
How to Enable Better Supply Chain Decisions in Real-Time
Predictive and prescriptive analytics allow you to focus on key activities having the highest impact on overall supply chain performance. Digital dashboards offer easy-to-read information using key performance indicators (KPIs) that identify what areas require attention or modification. And machine learning helps support your prescribed actions by presenting recommendations that drive optimal outcomes. Using a cloud-based, multi-tenet, platform as a service (PaaS), you have an opportunity to realize full supply chain visibility with a synchronized trading partner network using ActiVate®. Activ Technologies platform as a service transforms entire business processes—improving operations and service while lowering costs.
Activ Technologies offers a cloud-based, multi-enterprise platform, ActiVate®, that digitally transforms supply chain processes and presents a pathway for supply chain transformation. Want more information about ActiVate PaaS? See the product sheet for more information.
Download Activ’s eBook, Your Roadmap to Supply Chain Digital Transformation.