Supply chain analysis involves evaluating each link in the chain, both individually and holistically. The end goal is making the supply chain as cost-effective and efficient as possible, while also attempting to shorten the total time it takes to get a product from beginning to end.
Transportation is often one of the largest cost components in the supply chain, and therefore a key data component for supply chain analysis. Transportation expense data can be found on freight invoices, or internal transportation management systems. Leveraged correctly, both can be excellent data sources to use in supply chain analyses. When integrated with other shipping data, the result can build a foundation for a strong business intelligence platform.
The interpretation of this data or data analytics is playing a bigger role in supply chain analysis and consulting practices. Often described as ‘big data’, it often refers to “the dynamic, large and disparate volumes of data being created by people, tools and machines,” EY says.
According to Villanova University, businesses that use “big data” in some capacity are expected to spend $50m on data analytics this year. A number of technology tools have entered the market to assist with “big data” analysis. Thanks to these tools, while the time has been reduced, there is still very much the need for a qualified analyst to properly interpret the results. Often times, the wrong data is used for analysis. In addition, if the analysis is done in-house, there could be a subjective interpretation of data or data sets. Additionally, data-driven forecasting models could reflect their own creator’s biases.
Hence, third-party consulting firms are often recommended to analyze data such as transportation costs. These companies are typically well-versed in up-to-date industry-related trends, knowledgeable in the types of data needed for analysis, and informed on how to obtain the data if needed.
Today, businesses operate in a “new normal”, one that is in constant motion, including fluctuating rates, tightening capacity, consolidation within the logistics market and more. Risks have increased in part due to globalization, and advances in technology have brought forth new opportunities and threats.
Businesses need to be prepared by understanding the market dynamics, identifying and analyzing data and turning it all into a successful strategy to operate profitably. One effective way to achieve this is by partnering with a non-biased, third-party consulting firm that can offer fresh new perspectives and proven analytical skills.
Supply chains no longer operate in silos. Instead, they are evolving into real-time collaborative networks. As such, it is imperative that businesses take advantage of third-party firms to assist in supply chain analytics. This will ensure businesses are not adapting to the ever-changing global environment but operating in the most efficient manner.
Enjoy curated articles directly to your inbox.