When it comes to managing your supply chain, volatility and uncertainty have become a fact of life. From Brexit to U.S./China trade tensions to weathering unpredictability in the age of climate change – it’s understandable if your supply chain planners complain that it’s next to impossible to properly prepare for what’s coming next.
To help meet the challenge of volatility, leading organizations are focusing in on three key pillars for a better supply chain strategy:
- Total visibility: In a globalized digital economy, supply chain visibility requires you to connect digitally to your supply chain partners. Today, many organizations connect only to their top suppliers. However, to achieve total supply chain visibility, you’ll need to connect to 100% of your partners, and, if possible, your partners’ partners. While suppliers of materials used in production are important, you shouldn’t stop there. A comprehensive approach to supply chain visibility means connecting with distributors, logistics service providers, end customers, and even assets by using Internet of Things (IoT) technology.
- Business sustainability: Maintaining sustainable business growth goes hand-in-hand with environmental sustainability. Less resource usage and waste, after all, means greater efficiency and lower costs. Leading organizations are revamping processes to hit their sustainability targets. Direct-to-consumer models can cut down on transport while building strong customer relationships. 3D printing can locate production closer to the consumer – reducing emissions in transportation, eliminating unnecessary inventory, and minimizing waste. Predictive maintenance can improve the performance, reduce the carbon footprint, and extend the life of equipment. These are just a few examples.
- Customer-centricity: Putting customers first means putting them at the center of your supply chain processes. The objective is to stay on top of changes in demand, offer up goods and services that meet this demand, and then orchestrate the entire supply chain to deliver the goods when, how, and where the customer wants them.
Across all these areas, embedded analytics can play a critical role in helping your organization deal more effectively with the challenge of supply chain volatility. Think of embedded analytics as insight built directly into your business applications and processes, instantly accessible to users in their daily activities.
While working in your transactional system, users can access in-the-moment insight and decision-making support based on a mix of live and historical data, both structured and unstructured. But how exactly do embedded analytics help your organization in the areas of total supply chain visibility, long-term business sustainability, and improved customer-centricity? Let’s have a look.
Starting with the visibility question, let’s say a typhoon hits your manufacturing plant in Southeast Asia and takes out a month’s worth of product, severely impacting your ability to meet customer demand. As everyone in your supply chain scrambles to ramp up new production, embedded analytics can assess the ability of potential partners to deliver on time – based on current data regarding available capacity mixed with previous performance data regarding on-time delivery under tight deadlines. This can help you choose the right supply partner to recover from disaster and meet customer expectations.
What about business sustainability? Let’s say you’re an asset manufacturer – a maker of HVAC systems that heat and cool factories. If you fashion these systems with sensors that feed out asset health and emissions data – and then evaluate this data in real time with embedded analytics – you have the power to completely transform maintenance processes.
Now you can move to predictive maintenance with abilities to see what’s coming next. Now you can act proactively to prevent downtime. You can even transform your entire business model – for instance, providing temperature-controlled facilities as a service.
If you consider taking the service-provider approach, you now have the power to reimagine your relationship with your customers. As a service provider, your company becomes a partner in your customer’s business success, with the potential to build a relationship that’s solid, long-term, and even more profitable.
Add to this the benefits for environmental sustainability, such as greater machine efficiency – leading to less waste, optimized processes, and reduced carbon emissions. On the sustainability front, embedded analytics delivers the goods.
Embedded analytics can also help drive customer-centric processes. In the supply chain planning stages, it can be used to detect demand signals from point-of-sales systems, social media, and other sources. At the point of purchase, it can be used to offer tailored pricing based on supply and demand dynamics, order timing, competitor pricing, or past purchase patterns.
Once the order is placed, embedded analytics can be used again to provide an accurate estimate of the delivery time based on current supply chain metrics. If bottlenecks occur along the way, you can set your system to provide automated delivery updates. And if you encounter further snags in the last mile of delivery, your connectedness to logistics partners across the network can help you optimize delivery routes based on real-time traffic conditions. The result is on-time delivery and happy customers.
What to look for
If your organization is looking to transform its supply chain, look for approaches that bring analytics as close as possible to real-time operational processes. More than ever, users need insight on demand, supply, and environmental events in real time. Embedded analytics can provide that insight and even streamline processes by automating decision-making. Ultimately, you’ll have the understanding you need to successfully navigate an increasingly volatile world.
For more information, download the March 2019 Forrester Consulting opportunity snapshot, “Optimize Business Intelligence Efforts With Embedded, Application-Driven Analytics,” to examine the challenges, best practices, and recommended actions that can help your business turn your supply chain into an intelligent, competitive force.
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