Over the last decade, companies have invested heavily in new information technology, including systems for enterprise resource planning and supply-chain planning and execution. To handle the wealth of data required to support such systems, they are showing keen interest in business analytics, says Siddharth Taparia, senior director for business analytics with SAP AG.

At the most basic level, business analytics are a means of measuring supply-chain performance. They employ dashboards, reports, graphs and charts, based on handful of key performance indicators. They include such elements as forecast accuracy, days sales outstanding and inventory days of supply. "From executives in the boardroom to people on the shop floor, everybody can have the information they need to do their jobs easier," Taparia says.

The first step toward embracing business analytics is to secure the data that underlies global operations. More of it has been generated in the last year than the previous few decades combined, according to Taparia. "What's important is to have it presented to the decision-maker in a way that's timely and relevant."

With the data in place, companies need to examine the areas they wish to measure, manage and optimize. Business analytics can be a valuable tool for mapping business priorities to the available data.

Of equal importance is the benchmarking of one's supply chain against other companies, especially those with "best-in-class" supply chains. A key tool for that purpose is the Supply Chain Operations Reference (SCOR) model of the Supply Chain Council. Companies can tailor SCOR to their own priorities, while comparing themselves against direct competitors and industry leaders in efficient supply-chain management.

Business analytics can also be a critical tool in protecting against natural disasters, which have the potential to shut down entire supply chains, Taparia says.

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