The ultimate goal is to drive excellence through the use of business intelligence (BI), a term that encompasses all of the applications, tools, technology infrastructure and best practices that go into optimizing performance. BI requires real-time access to key measures such as cost of sale, client spend, inventory movement and delivery performance.
The notion of embedded analytics is more about the way in which data is presented. Itís a foundational practice, which enables various business units to access a meaningful, standardized set of metrics, based on information thatís accessible when they need it. The goal; smarter business decisions faster, empowering the user.
Organizations need to ensure that theyíre capturing structured data in a consistent and accurate fashion. Often that means the re-engineering of fundamental business processes. This standardization is an essential step toward the enablement of supply-chain visibility. Chaos ensues when the many parts of an organization are permitted to define their own formulas, geographic regions and performance levels. All external and internal users must be working from one version of the truth. Individual perspectives of data are necessary, but consistency is vital.
Letís not confuse consistency with perspectives. The same set of data can serve multiple purposes. For top executives, it presents a high-level view of organizational performance. For those at the regional level or in the field, it offers a more granular viewpoint. Logistics managers, for example, will want to know how theyíre serving customers at the local level by service type and the locations theyíre responsible for. Account managers will focus on their clients. Clients, their performance and spend which relates to the locations they occupy and services they use.
These perspectives yield gratifying insights. I recall one client that was relying too heavily on next-flight-out service. Analyzing their spend patterns and customer needs, we discovered that next business day was sufficient in most cases. In the end, we were able to change that clientís behavior, introduce significant savings without sacrificing service levels or client satisfaction.
Traditionally, companies have relied on internal reports, spreadsheets or freestanding dashboards for that purpose. In the age of outsourcing, however, a new approach is called for. As companies forfeit direct control over larger portions of their supply chains, their need for collaboration with outside partners increases. They become more focused on gathering externally sourced data, with the aim of achieving a broader view of operations. The management dashboards that are required to keep tabs on that world canít be developed in isolation. Moreover, with disparate data, information must be diligently vetted for accuracy.
For decades, executives have spoken of the need for visibility throughout their supply chains; from multiple tiers of suppliers all the way to the end customer. They have been challenged by the inability of partners to provide and align data and metrics. Now, through the concept of embedded analytics, that requisite can finally become a reality.
So why have so many companies failed to achieve this basic want? Perhaps itís the lack of long-term commitment or executive sponsorship. The effective use of embedded analytics requires a consistent, sustained effort that involves the entire organization. A cultural shift must be achieved whereby analytics becomes part of an organization's DNA.
Backed by executive support and a commitment to standardization, companies can begin to pursue the goal of embedding analytical information, metrics, graphs and reports within the applications that end users utilize on a daily basis. In the process, they can uncover problem areas and opportunities for gaining new efficiencies, measuring the effect of change and gain a competitive advantage.
At Choice Logistics, we have been utilizing embedded analytics for several years. We have been able to monitor our clientsí spend, performance levels, service utilization and profitability. The result has been greater operational efficiency on both sides, with higher levels of client and end-user satisfaction.
Weíre also beginning to report on carrier and vendor behavior. With more systematic processes in place, we will be able to avoid shipping lanes where a particular carrier is performing poorly. The use of vendor scorecards will lead to better management techniques globally. In addition, we can trace historical trends exposing inefficient current behavior and the effect of change.
Embedded analytics are more than a piece of plug-in software. As with any significant technology effort, the tool must be accompanied by business-process change. Every stakeholder, both inside and outside the organization, has to get involved. Proper training, backed by top managementís ongoing commitment of time and funding, is key. To be effective, analytics must become an organic component of corporate strategy and culture.
Simply put, thereís no substitute for good people, business process and policy. By leveraging the use of embedded analytics, organizations will continue to derive benefits. Availability of transparent, precise and timely data has to precede any re-engineering effort. A continuous process of review and adjustment ensures that organizations continue to improve, in terms of their suppliersí performance, the efficiency of internal processes and, most importantly, the quality of their customer service.
As they proceed on their journey, managers must remain open to suggestions for improvement from every supply-chain partner. Continuous improvement is critical and embedded analytics plays a key role in the drive for organizational excellence.
Source: Choice Logistics
Keywords: business intelligence, supplier network, collaboration, business strategy, continuous improvement