Leveraging Data for Supply Chain Improvement
If there is one topic that is gaining momentum in the field of supply chain management, it’s analytics. The reason is simple – it is the first step on the journey towards performance excellence in the supply chain. It keeps innovation focused and real. It reveals valuable insights that can be catalysts for change. And, with study after study demonstrating the clear linkage between strong supply chain performance and strong financial performance, it's no wonder supply chain leaders are racing to master this discipline.
The root of analytics is data. For the past couple of decades, discussions about data have focused largely on using it to enable visibility and performance reporting. While no one is arguing that these things aren’t valuable in the drive towards supply chain excellence, companies are becoming more focused on the leverage data can provide as the enabler of analytics. The journey begins with the question "how can I harvest a robust set of data from my supply chain and logistics operations?"
Most companies, when faced with the task of supply chain analysis, begin by gathering data from their multiple internal systems. Then they ask all of their logistics providers to provide what they have, in an attempt to build a 'complete set.' This can be a painful exercise for two common reasons:
- Provider data is often restricted to a shipment-level, whereas their own data is at the order/item level (PO history, SO history, inventory reports, etc.), and connecting these records is extremely difficult
- Connecting transportation records to customs entry records when they come from multiple sources is complex
As a result of these challenges, companies are expanding their engagement with their logistics partners to include management of their orders, not just their shipments. Aside from the obvious benefits this can have in terms of visibility and daily operations, the benefit to analytics is that order, item and shipment data are connected from the start. In addition, some companies integrate customs brokerage and order management with the same logistics partner. The result is a single set of end-to-end data that's already connected.
Armed with a high quality set of end-to-end data, companies can sink their teeth into an array of analytical exercises that are both historical and predictive in nature. In a simple context, a historical view can help shine a light on an area in which performance is falling short of its target. However, data with real breadth and depth is able to reveal relationships between disparate activities, functional or individual motivations, and discipline levels.
The table below illustrates some of the ways that good data can be leveraged for improved performance in the supply chain:
It's fair to say that analytics in the past has been severely constrained by the absence of good data. The future, on the other hand, can and must be characterized by innovation and continuous improvement that leverages complete, high-quality data. The journey to supply chain excellence depends on this foundational capability.
A logistics provider's ability to harvest high quality, end-to-end operational data from the work they do has become a key selection criterion for companies interested in improving their supply chain. Companies are looking to their logistics partners to transform raw data into measurable economic value. This is only possible through a combination of analytics and collaborative innovation – customers and providers as true partners.
At Expeditors, we are making investments in both technology and people so we can continue to be the kind of partner who can work alongside our customers on the journey to supply chain excellence.
Pat St Laurent
Global Director, Network Solutions
Expeditors Global Headquarters, Seattle