Boosting ROI With Supply Chain Analytics

Different businesses have different approaches to supply chain analytics depending on their field and size, but there’s one universal truth: not automating the supply chain can cut into ROI significantly. Just look at hospitals. Nearly half of hospitals still manually manage their supply chains, yet 97% believe that transitioning to a formal analytics system would decrease costs and increase care quality. And hospitals are hardly alone. Many businesses are still making the transition to supply chain automation, and that’s putting profits within their reach.

Analytics And The Problem Of Integration

One of the primary reasons that supply chain analytics systems can increase ROI is that it’s a time-saving measure. For example, the hospitals mentioned above that still manually manage their supply chains typically do so using Excel spreadsheets and other labor-intensive strategies. In other businesses, different elements of the supply chain are managed through different historic systems that provide conflicting information and don’t readily come together.

By adopting a standardized supply chain analytics system, businesses can integrate data from multiple ERP systems and consolidate it in one central location. This reduces the amount of time spent navigating between these systems. They also eliminate the hospitals’ problem of manual data entry and management.

Projection And Scheduling

Another advantage of employing a supply chain analytics system is that these programs do more than just record inventory and place orders. They also allow businesses to schedule deliveries to the right locations based on sales predictions. This means that stores have what they need in stock and customers’ needs are met in the most convenient way possible.

Supply chain analytics software primarily determines where goods are needed based on past sales patterns, including volume and product preferences, and they can hone in on trends at different branches of the same store. More recently, though, these systems are also able to connect with consumers to shorten the overall sales cycle. At the clothing chain rue21, including customers in the supply chain has allowed the store to cut their product testing period from 6-9 months to 2 days. This process integrates direct consumer input with typical predictive analytics, with better outcomes for all parties.

Where Safety Meets Savings

Certainly no one is meaningfully harmed if rue21 doesn’t have the right sweaters in stock, but in other industries, proper supply chain analytics management is a health and safety concern. This includes the possibility of hospitals running out of supplies, as well as in various food-related businesses like grocery stores and restaurants – and from an ROI perspective, the importance of safety can’t be minimized.

Consider, for example, what happens when restaurants don’t have the data necessary to perform regular food safety audits and track the source of products in the event of a recall. Food goes to waste and food-borne illness outbreaks put businesses at risk. Preventing both serious ailments and food waste that cuts into profits are vital concerns for restaurants, which already operate on a very narrow profit margin.

While multinational corporations obviously rely on extensive supply chain management programs to keep things running smoothly, small businesses are still making the jump over to these systems. Once they’re established, however, financially strapped small businesses may be able to eke out slightly larger margins and reduce time wasted on manual system management and integration – the kind of work that should be left to computers so that employees can commit themselves to more profitable activities.