Importance of Supply Chain Analytics

Importance of Supply Chain Analytics

Supply chains exist to serve customer demand and data analytics is fast emerging as the spine of the demand-driven supply chain

To understand what it means in practice, let’s consider an example – the case of a family moving into a new home. By the time they’ve moved in, they’ve made hundreds of decisions about what to purchase. Whether to get granite or concrete countertops, nylon or polyester carpets, brass or stainless steel fixtures, etc. A demand-driven supply chain anticipates what they’ll choose accounting for issues like customer preference, what they’re willing to pay and how social media is influencing and reflecting their decisions and more. This is where analytics tools that look at issues like social sentiments can play a big role.

In a demand-driven supply chain, analytics-driven insights inform decisions at every step along the chain. 

To see what this means, let’s work backwards through the supply chain.

How did the product reach customers? Did it arrive on time?  The customer needs to know when they can expect your product and you need to plan on how to get it there on time. The analytics tools can help you meet your customer promise dates by looking deeper into transportation performance. It will also help to better predict the unexpected.

Let’s go back to the production phase. When you need to know how to better manage the cost of the production process, meet the latest quality standards and shortened lead times, analytics and visualizations focusing on product complexity, plant productivity, production mix and allocation and risk-adjusted lead time can offer a much clearer picture of key production issues.

Other crucial issues that need to be addressed:

  • What’s your risk exposure from global suppliers? 
  • How much risk is acceptable? 
  • What’s the environmental impact of your sourcing?

How can data analysis help?

Analytics tools can help show what’s being sourced and procured. It tells us what’s happening throughout the value chain, what the specific impacts of decisions are on costs and where potential supply crises are emerging around the world. At the very beginning, all the considerations go into planning and development when you need to know who your top customers are and how to segment them. Segmentations are made in areas like customer sentiment, potential market demand, products design, insights, desirable features and a lot more.

More time 

Sorting through a huge variety of Excel tables, the relevant part of it needs to be first identified then structured and finally interpreted. All of these activities are extremely time-consuming and exhaustive. The decision-makers often have to wait several weeks to get the first results. This causes a delay in the entire process from procurement to production to sales.

It can be upsetting when processes last too long or do not lead to the expected results. Without data analytics, things run slow. We need to check what’s going wrong, take our best guess and conduct process workshops, expert interviews and conduct real-life observations. Often, data reports in excel tables are retrieved from the supply chain manager.

Data analytics can change the way we approach information. It can deliver fact-based results in a highly visualized manner. Thus, the findings are easy to understand for all levels of expertise and build the basis for further mitigation actions. Instead of gathering information the traditional way analytical tools are used to directly extract the data from the ERP systems.

More transparency 

Furthermore, the client’s process adherence directly correlates to the corresponding key performance indicators. The lower the process discipline the worse will be the on-time delivery forecast accuracy and inventory levels. The clients can achieve much higher transparency to detect compliance failures. This approach will also help clients save money.

With supply chain analytics, we can find inefficiencies in your process in a comparatively short period. The results are not based on manual error-prone evaluations but based on the single source of truth. The ERP system will help bring more transparency into your process. 


The analytics generated insights are the way to make a smarter customer-centric, demand-driven supply chain, one that’s connected at every step. It would eliminate inefficiencies and free up your valuable time to focus on what truly matters.