Effective supply chain management responds quickly to the shifting market landscape, and leverages technological capabilities to improve efficiency and provide better service. New technology provides an opportunity to gain greater insight into the flow of goods. At the same time, customers’ growing expectations are putting pressure on legacy systems across the industry. Being ahead of the curve technologically can help meet these ambitious expectations through faster delivery, real-time transparency, and lower costs.
Underlying these developments are the expansion Internet of Things-style sensors and connected devices, the resulting large-scale collection of data, and the use of advanced analytics to better manage the entire supply chain. Within this competitive environment, it’s valuable to look at how these trends impact the day-to-day operations of supply chain professionals. A recent APQC survey identified service quality, performance management, and data/analytics as three key priorities to watch; here’s a look at how each of these relate to larger trends in the industry:
Quality of Service
Ensuring a high quality of service is a fundamental part of supply chain management (SCM); in fact, it’s probably the most important part there is. Technology continues to shift consumers’ expectations, and the standards by which quality service is judged shift along with them. To keep pace, supply chain professionals must focus on the key drivers of business success.
Speed, transparency, and innovation are three areas for growth that supply chain managers can exploit to improve overall quality of service. Customers are looking for goods to move from the port to local warehouses faster. They also want fulfillment strategies designed to compete with industry leaders like Amazon. As part of these strategies, they want access to data showing where their products are at any given time. Perhaps most importantly, they are looking for a proactive approach that learns to anticipate problems in order to avoid them entirely. Supply chain professionals must find ways to deliver ever-increasing quality of service to stay competitive, and these are some of the key goals they need to reach in this area.
A strong SCM foundation is built on standardized performance metrics and trend analysis. To move to a more advanced approach, supply chain professionals should align these metrics to support enterprise or customer objectives. Root cause analysis is an important part of this, but many supply chain organizations do not have the metrics available to adequately perform this process. In developing these metrics, the corresponding key performance indicators must be aligned with the priorities of customers. They should include everything from delivery reliability to the accuracy of inventory levels.
The most effective SCM professionals can translate strategy initiatives into proven results. Those lacking in this area must drill down into both their operational and evaluation processes to determine the source of the disconnect. Data must be analyzed to determine actionable improvements to existing processes. By dissecting them and determining redundancies and inefficiencies, supply chain officials can meet performance challenges in the changing industry.
Data and analytics
With more data available than ever, thanks to the proliferation of IoT devices, supply chain professionals need to make use of this abundance in ways that help improve customer service while reducing costs. Increasingly, SCM will be judged not just on efficiency and speed, but on the ability to provide greater transparency while anticipating problems in advance. Predictive analysis based on relevant data makes this possible.
It’s important for supply chain professionals to keep up-to-date on developments in the area. Having access to the best analytics tools is a good starting point. These can catalyze the predictive analysis that is used to determine such things as when inventory level might suddenly decrease or how to avoid bottlenecks in transporting goods. Data analytics allows supply chain officials to leverage technology to create actionable intelligence.
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