Managers must learn to use advanced analytics to restructure and adjust their supply chains, based on real-time data and consumer demand.
“There is a need for more analytical skills,” says Canan Kocabasoglu-Hillmer, director of the Master’s in Global Supply Chain Management at Cass Business School. “Business managers really need to be retrained to able to process incredibly large data sets.”
A recent report from the consultancy Accenture found that 41% of executives said analytics enabled faster and more effective reaction to supply chain issues. Nearly 50% said big data improved customer service and demand fulfilment.
“Using big data and advanced analytical tools enables supply chain managers to better supply chain capabilities,” says Nick Vyas, director of the Center for Global Supply Chain Management at USC Marshall School of Business, such as demand planning, forecasting, and network optimization.
Companies have a growing mountain of data on everything from customer shopping trends to weather and geography.
Research from Boston Consulting Group found that companies can optimize their delivery networks using geoanalytics — location-based data combined with advanced analytical tools.
The trend for supply chains to utilize their data is part of a wider embracement of innovation, with managers assessing technologies such as 3D printing, cloud computing and advanced robotics.
“Disruptive technologies have reshaped global supply chains to some degree,” says Thomas Roemer, senior lecturer in operations management at MIT Sloan School of Management.
The challenge is to glean insights from the deluge of data. Yet companies cannot find the talent needed to implement innovative technologies in their supply chains, says a report this year from MHI, the trade association for the logistics industry.
“You need people who understand business and computational statistics,” says Mark Johnson, associate professor of operations management at Warwick Business School. “[But] there are very few of those people around.”
This is already changing the types of training on offer for supply chain managers, believes Mike Bernon, senior lecturer in supply chain management at Cranfield School of Management, whose staff include quantitative modelling experts.
“There is a definite shortage of people that have that skill and I don’t believe we fully understand how to manipulate data [yet],” he says.
Arnold Maltz, associate professor in the supply chain department at W. P. Carey School of Business, agrees that it’s “early days” for big data.
But he adds that it could lead to “potentially much better forecasting, much earlier problem detection, and even enhanced transportation reliability, with on-board maintenance connectivity and monitoring”.