Mastering supply chain and logistics is one of the sure-fire ways that any business or professional in the industry can climb to the top of the market. Being able to cut costs without sacrificing quality by targeting inefficient processes gives your business a huge financial leg up on your competitors. Nevertheless, supply chain management can be a confounding process that often frustrates even the brightest minds in the logistics world when they try to do everything on their own, so it's worth considering how technology can be applied to make this process easier.
Few things stand to upend supply chain management like advances in analytics. Here's how big data is disrupting the supply chain industry and how you can adapt to these rapidly changing times.
Data analysis helps you improve profit margins
The simplest way to show how big data is disrupting the supply chain is to point out how data analysis helps you improve your profit margins. You already use it to determine which methods are effective and which are worthy of being cut from your operational model, you just do it at a smaller scale. Businesses have been struggling with ignorance for countless decades, unaware of which models were the most efficient. Recent developments in the field of data collection and analysis have rendered it easier than ever for companies to figure out when they're doing things wrong.
The exponential growth of big data is really something to behold: It's expected that the amount of data being collected each year around the globe is increasing at a whopping 59% on an annual basis. What this means is that companies which have been ignoring the data revolution will need to wake up to the modern reality of supply chain management or get left behind.
According to an extensive analysis conducted by McKinsey, there are six major areas where big data analytics are disrupting the supply chain: Sourcing, production, warehousing, transportation, point-of-sale and consumers. For example, by helping assure business owners that their suppliers are legitimate, data analysis techniques can cut down on the amount of time it takes to find a reliable partner for sourcing.
The construction of data warehouses built on the cloud is also helping businesses boost their productivity. By creating robust statistical models which can accurately forecast the future, companies can trust in their planning much more than when they had to conduct consumer surveys or go with their gut feelings. In the future, it will be easier than ever before to schedule a pickup from a warehouse or determine where your packaging is when trying to plot out your business' next steps.
Big data is changing the workforce, too
Another way that big data is disrupting the supply chain is by changing the modern workforce in the industry. Whereas employees in the past didn't need to worry about being digital-savvy, workers of the future must become familiar with complex technology and even become at least familiar with the basic concepts and applications of data science. If you want to command high salaries and get big promotions in your career, you'd better be willing and able to master it. The rapidly growing demand for data scientists in pretty much every industry is indicative of the fact that the supply chain revolution is only just getting onboard.
Another useful way that big data is bolstering the value derived from their supply chain management is by enhancing the process of tracking shipments through its entire journey. For endless years, businesses effectively have to make an expensive order and then cross their fingers in hopes that it would arrive, but real-time tracking and other data analysis techniques have made it easier and cheaper than ever before to keep tabs on your orders. This will mean that businesses in the future can be more confident when sourcing their needed equipment and materials, understanding that the likelihood of not getting their shipment is getting lower every year.
Perhaps the most notable way that big data is disrupting the supply chain is by turning officials who work within those supply chains are able to predict what customers want before they do. Supply chain professionals in the near future will have access to greater data-driven insights into the market than their predecessors, which will enable them to identify operational areas of higher or lower demands as they change over time. The third annual supply chain survey released by Deloitte indicates that supply chain professionals are going to become increasingly important to satisfying consumer demand despite the intense focus on automating technologies.
Big data is disrupting the supply chain in many ways, but the forthcoming changes are mostly positive and should be welcomed by businesses everywhere. Thanks to the power of big data analytics, businesses can count on their supply chains to work with more confidence than ever before.