Point A to Point B: The relationship between Data Science and Supply Chain

"I was in Bangalore, India, the Silicon Valley of India, when I realised that the world was flat."

Thomas Friedman

Supply Chain Analytics is not a new concept and certainly not a unique one. Just that the need and importance of analytics in supply chain has never been felt more. In the pursuit of continuous alignment between corporate strategy and supply chain execution, information is power and visibility into the supply chain is at the core.

Supply chains that at one time consisted of a factory and its direct suppliers now span the globe and can consist of multiple levels of supplier/customer relationships. So, for supply chain visibility to be truly insightful, it must be inclusive. 

Organizational Advantage: Want to hear what could be one of the best supply-chain success stories ever? Take the $4 billion commercial and consumer equipment division of a $20 billion company, reduce inventory by $500 million, and as sales grow, keep inventory constant -- thus avoiding an additional $500 million in inventory. This is what John Deere did starting in 2002, with the help of supply-chain analytics.

According to SmartOps CEO Sridhar Tayur, the key concept behind Deere’s success is the use of analytics while building forecasts. According to Tayur, the theory dictates that what you know today is quite likely to change tomorrow. How likely it is to be different is what you capture in the model.

Supply Chain Analytics provides competitive advantage to organizations by enabling them to optimize their processes through cross-functional analysis. Industries like automobiles, integrated communications, consumer goods, and heavy engineering, spend more than 50% of their total cost in strategic sourcing, this makes advanced analytics of BI in sourcing a key focus for organizations. Companies today, irrespective of size and scale are relying on advanced analytics of Business Intelligence (BI) to facilitate strategic decisions related to Low Cost Country Sourcing (LCCS), Product re-engineering, Re-sourcing and New product development. 

Supply chain analytics can be made use of in the following manner:

Helps to consistently assess operational effectiveness and how each functional area is contributing towards corporate goals

Is quick to deploy and implement, with comprehensive data extraction and measurements out-of-the-box and verified

Provides consistent measurements based on the right data

Is easy to learn and users quickly becomes self-sufficient

ANALYTICS APPLIED IN BUSINESS PROCESS

Service Fill Monitoring

Service Loss Analysis

Supplier Delivery Performance Rating 

Inbound Delivery Monitor

Collaboration Performance Indicator 

Key Performance Indicators 

Supply Chain Performance Management 

Operational Performance Management 

Supply Chain Analytical Applications

The driving force behind needing a better view of the ins and outs of the supply chain is the pressing need for flexibility and performance amid a business environment of complexity and volatility. Corporate plans are made, and then reality takes over. Constant changes inside planning horizons are no longer an exception to the rule; they are the rule. With so many unplanned events happening across extended supply chains, caused by supply disruptions, demand volatility and shrinking product lifecycles, frontline decision makers are making literally hundreds of judgment calls each day. Each of these alone may not have significant implications to the business, but in aggregate, they are quite material. How does an organization ensure that these decisions — which need to be made quickly to satisfy customers and avoid costly delays — are consistent with its overall corporate performance goals?

EXAMPLE FROM THE INDUSTRY

SAS SUPPLY CHAIN INTELLIGENCE

Deliver quality improvement, customer satisfaction and higher profits with sound supply chain strategies

SAS Supply Chain Intelligence solutions deliver a critical advantage to organizations by helping them turn data into knowledge and develop unique insights about their demand patterns, supply networks, operations and customer service requirements. SAS provides you the ability to combine data from other data sources, such as transactional and operational systems, to provide more comprehensive analysis and reporting to better meet corporate business requirements. The result is improved efficiency and effectiveness of the overall supply chain, increased profits and higher customer satisfaction.

http://www.sas.com/solutions/sci/index.html

CAREER OPTIONS AND HOW ATI CAN HELP

The ability to deliver results in the face of daily changes inside planning horizons is being thwarted by the inefficiencies of traditional tools and technologies, which lack the integrated demand-supply planning, monitoring and collaborative response capabilities required for today's complex and dynamic world. Companies are now recognizing the need to arm their frontline staff with better information and analytical tools to make informed decisions on risk tradeoffs and response and ensure ongoing alignment of operations execution to top-level corporate objectives, and it is here that ATI wants to make a difference by ensuring that people with a passion for growth, and a knack for perfection get the analytics advantage.