With the current difficult economy there is even greater recognition of the need for effective supply chain control. With increased complexity resulting from factors such as volatile consumer spending patterns, global operations, a proliferation of diverse information sources, and outsourcing requiring greater collaboration, a means of efficiently controlling operations and more importantly costs is key. The systematic identification of costs, and their elimination or reduction, can have a significant impact on bottom line performance. So it comes as no surprise that this area has received added focus from savvy supply chain heads. And that they are turning to BI to achieve supply chain control.
Supply Chain Control Towers
Much has been written of late regarding supply chain control towers. Initially this idea focused around having a central hub utilised to provide visibility into inbound and outbound distribution flows, the analogy being a control tower at an airport handling aircraft flying in and out. However, in their article Global Supply Chain Control Towers, Capgemini analysts comment that:
“Supply Chain Visibility is the key enabler for managing a business both within the organizational boundaries as well as across the boundaries. This visibility provides speed, reliability and flexibility in order to gain a competitive advantage in the form of well controlled and managed supply chain functions. In response to the need for Supply Chain Visibility, the leading Supply Chain Visibility principles are increasingly being embodied in Supply Chain Control Towers. A supply chain control tower is a central hub with the required technology, organization and processes to capture and use supply chain data to provide enhanced visibility for short and long term decision making that is aligned with strategic objectives”.
They later go on to say that:
“Supply Chain Control Towers are cross-divisional organizations with system integrated ‘information hubs’ that provide Supply Chain Visibility. These hubs are used for gathering and distributing information, and allow people trained to use these visibility capabilities to detect and act on risks or opportunities more quickly. Supply Chain Control Towers are typically set-up to monitor, measure and manage transport and inventory movements across the supply chain”.
Supply Chain Visibility
As you can see, much of the focus of supply chain control towers seems to revolve around improving visibility, which in turn, through the gathering/provision of relevant and timely information consolidated in a single location, facilitates a faster time to response from key decision makers along with greater control.
BI solutions can be used to deliver this visibility for supply chain control.
The newer BI solutions in particular can aid supply chain control in that they provide the technology and means to access previously untapped information on the fly. They can also be used by those individuals actually doing the job and making operational decisions, rather than being used as a tool solely for middle management analysis. They are easy to deploy and even easier to use. In particular, their ability to link with a variety of diverse sources, from social media sites to adhoc excel spreadsheets, and present the data quickly and in a single source format that is both intelligible and relevant to the user concerned, improves visibility, prevents the need to sift or sort insignificant data, and speeds up time to response. Taking the premise of supply chain control towers, using a central information hub, a BI tool could be used as the means to extract data for analysis, produce reports or alerts for performance outside tolerance, and trend information in order to predict future pitfalls. Greater business wide visibility. Swifter and more informed decision making. Greater control.
BI for Supply Chain Control
In terms of functionality, the newer breed of BI software provides the means to access data real time or near real time, which arguably results in action being taken sooner than it otherwise would (if waiting for overnight jobs or lengthy data warehouse/ETL processes to be completed). As data is accessed at the source, it can be extracted and acted upon instantaneously. A delivery failure can be rectified to avoid a hit on customer service, increased production can be secured in the event of a heavy and unexpected promotional spike, or supplier progress can be integrated into performance charts and potential availability problems identified ahead of time. All of these features aid greater transparency across the supply chain, and through appropriate identification, analysis and response, assist to achieve greater supply chain control.
Through increased transparency and in monitoring of performance via appropriate supply chain metrics, it is possible to achieve greater control over operations and costs. BI can improve supply chain visibility, which in turn improves supply chain control and performance.
But visibility without action is fruitless, and BI also helps with the decision-making process and drives action.
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