In the supply chain, clean data is the fuel of the future
By Richard Forrest, EVP Supply Chain Planning,LLamasoft
When it comes to supply chain, volatility and change is the new norm and as the pace of competition heats up companies are having to redesign their supply chains more frequently to ensure that networks and flows are appropriate and optimal.
However, the chief barrier for modellers remains quick access to clean, reliable, relevant and ready for use data that has to be blended from multiple sources. Just collecting all the necessary data for a project can take five times as long as conducting the modelling itself.
Just providing access to Big Data resources alone will not be sufficient. Success in this field also requires supply chain expertise and understanding to transform this Big Data into the necessary supply chain centric information that will enable your modellers to answer the many questions you have regarding your supply chain.
Gaining the right data
As supply chains become more driven by data, the accuracy and size of that data is becoming more critical. Today, organisations need to collect and blend together an increasing amount of supply chain data from multiple third-party sources, meaning that a large amount of the data needed to model your supply chain won’t regularly be available from within your own systems.
The type of data used in today’s modelling and simulation is also incredibly extensive, and will ideally cover a timeframe of at least three years. This data should cover all aspects of the supply chain, from stock data to past and future sales orders, supply orders, transportation information, route information and information detailing the relationship between hierarchies, orders, customer locations and more.
While the data required to effectively perform modelling and simulation is extensive, it won’t be of much use if it isn’t clean. This includes relatively simple tasks, like analysing the data for postal codes and linking terms like “US” and “USA” together. It also includes reformatting the data so it is displayed in a uniform way, enabling agile and automated analysis.
The benefits of end-to-end visibility
By acquiring large volumes of clean, end-to-end supply chain data, and enabling agile and efficient modelling, organisations cannot only see potential supply chain problems, they can also gain access to automatic and near-instant suggestions to remedy these problems. If the route regularly used for transportation is flooded, for example, an alternative route can be modelled and simulated to find the best replacement.
Organisations can also enable a wide range of scenario planning, allowing them to ask the “what ifs” of supply chain planning that can help bring down costs on an ongoing basis. Typically, these functions are handled as silo-based activities, with supply chain design being part of the logistics function and cost-to-serve reporting being handled in finance functions. By bringing these two together, organisations can gain more insight into how new parts of the business will benefit the business as a whole and how the fixed costs of networks should be shared throughout the business, for example. The ability to understand and challenge your supply chain is gaining prevalence in all sectors, though it is becoming especially important for organisations operating in sectors where tight margins are common practice, such as consumer goods and food manufacturing companies.
Returns are also becoming a larger priority for the supply chain. Big data visibility is key to managing returns, as organisations need to be able to filter out returns forecasts from actual forecasts, integrate returned goods into stock numbers and physically return these items to a location from which they can be redistributed.
Connecting the present and the future of supply chains
It isn’t just retailers who need to rethink their supply chain. Omni-channel retailing, and by extension online retailing, is making end-to-end visibility of the supply chain more and more pressing for brand owners. The companies are now finding that efficient home delivery strategies are just as crucial as the supply chains they use to connect to retailers carrying their products.
Customer’s now expect to be able to order goods from the brand’s website, in addition to online retailers. This means that brands are no longer simply maintaining volumes through traditional retail channels, but also offering a comparable channel experience. Additionally, changing consumer behaviour and increased reliance on online retail channels means that these brands need to be able to ensure that orders are processed and delivered at an increasingly fast pace.
Having fast access to clean, accurate and relevant data is crucial for companies to be able to make effective decisions for the present and simulate scenarios to make decisions for the future. The companies with the ability to do so will win, but those who are lacking clean data risk being left behind.