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Analytics in the supply chain

Analytics are the extensive use of data, statistical and quantitative analysis, explanatory and predictive models, and fact-based management to drive decisions and actions. The analytics may be input for human decisions or may drive fully automated decisions. Analytics are a subset of what has come to be called business intelligence: a set of technologies and processes that use data to understand and analyse business performance.

At a time when companies in many industries offer similar products and use comparable technology, high-performance business processes are among the last remaining points of differentiation. Many of the previous bases for competition are no longer available. Unique geographical advantage doesn't matter in global competition, and protective regulation is largely gone. Proprietary technologies are rapidly copied and breakthrough innovation in products or services seems increasingly difficult to achieve. What's left as a basis for competition is to execute your business with maximum efficiency and effectiveness, and to make the smartest business decisions possible. And analytical competitors wring every last drop of value from business processes and key decisions.

Analytics can support almost any business process. Yet organisations that want to be competitive must have some attribute at which they are better than anyone else in their industry - a distinctive capability. This usually involves some sort of business process or some type of decision. Maybe you strive to make money by being better at identifying profitable and loyal customers than your competition, and charging them the optimal price for your product or service. If so, analytics are probably the answer to being the best at it. Perhaps you sell commodity products and need to have the lowest possible level of inventory while not preventing your customer from being able to find your product on the shelf; if so, analytics are often the key to supply chain optimisation.


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