Publisher’s Acknowledgments
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Table of Contents iii
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Table of Contents INTRODUCTION ………………………………………………………………………………….. 1
About the Book …………………………………………………………………………. 1 Foolish Assumptions …………………………………………………………………. 2 Icons Used In This Book…………………………………………………………….. 2
CHAPTER 1: Defining Supply Chain Analytics ………………………………. 3 A simple definition ……………………………………………………………………. 3 The Three Core Components of Supply Chain Analytics …………….. 4 How Supply Chain Analytics Works ……………………………………………. 6 What Makes for Good Analytics? ……………………………………………….. 8 Types of Analytics ……………………………………………………………………… 9
CHAPTER 2: The Importance of Supply Chain Analytics……….. 11 Big Data in the Supply Chain ……………………………………………………. 11 Your Questions, Answered ………………………………………………………. 13 Looking at the Benefits of Analytics …………………………………………. 14 Why B2B Integration? ……………………………………………………………… 16 A Strategic Differentiator …………………………………………………………. 18
CHAPTER 3: Understanding the Basics of Metrics and KPIs ………………………………………………………………. 19 Strategic Goals ………………………………………………………………………… 19
Increase profitability …………………………………………………………… 20 Forecast accuracy ………………………………………………………………. 20 Working capital improvement …………………………………………….. 20 Operating margin improvement …………………………………………. 21 Risk management ………………………………………………………………. 21
Two Strategic Considerations ………………………………………………….. 22 Top down versus bottom up ………………………………………………. 22 Positive versus negative variance ……………………………………….. 22
Maturity Models, Reference Models, and Benchmarking …………. 24 Maturity models …………………………………………………………………. 24 Reference models ………………………………………………………………. 24 Benchmarking ……………………………………………………………………. 25
Applying Goals to the Supply Chain …………………………………………. 25 What to Measure …………………………………………………………………….. 26 Looking at Reports ………………………………………………………………….. 28
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CHAPTER 4: Use Cases for Supply Chain Analytics ………………….. 31 Demand Forecasting ……………………………………………………………….. 31 Invoice Reporting ……………………………………………………………………. 32 Inventory Visibility …………………………………………………………………… 33 Partner Performance Reporting ………………………………………………. 34 Procurement Reporting …………………………………………………………… 36
CHAPTER 5: A Six-Stage Approach to Getting Started……………. 39 Step 1: Identify the Business Problem ……………………………………… 39 Step 2: Find Your Data …………………………………………………………….. 40 Step 3: Choose the Right Team ………………………………………………… 42
Executive sponsors …………………………………………………………….. 42 Data owners ………………………………………………………………………. 43 Internal data users ……………………………………………………………… 43 External trading partners ……………………………………………………. 44
Step 4: Select the Right Tools …………………………………………………… 44 Standalone analytics solutions ……………………………………………. 45 Embedded analytics solutions ……………………………………………. 45
Step 5: Start Small, Think Big …………………………………………………… 46 Step 6: Measure Success …………………………………………………………. 46 Six Things to Avoid ………………………………………………………………….. 48
CHAPTER 6: The Future of Supply Chain Analytics ………………….. 49 Growing Pace and Variety of Data …………………………………………… 49
Social data ………………………………………………………………………….. 50 Internet of Things……………………………………………………………….. 50 Mobile data ………………………………………………………………………… 51
Becoming Integrated and Embedded ………………………………………. 51 Prescriptive Analytics Is Maturing ……………………………………………. 52 Cognitive Analytics Is Coming ………………………………………………….. 53
CHAPTER 7: Ten Tips for Using Analytics to Optimize Your Supply Chain …………………………………………………………… 55 Establish a Cross-Department Analytics Program Team …………… 55 Start with Your Business Objectives ………………………………………… 56 Break Down the Communications Silos between Teams………….. 56 Normalize Data and Terminology ……………………………………………. 56 Ensure Reasonable and Achievable Goals ……………………………….. 56 Start Small but Think Big …………………………………………………………. 57 Organize the Data Necessary for Business Growth ………………….. 57 Prioritize and Streamline Your Analytics Reports……………………… 57 Turn Data into Decisions …………………………………………………………. 57 Be Flexible, Be Agile ………………………………………………………………… 58
Introduction 1
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Introduction
Big Data is one of the hottest topics in the technology world today. Chief Information Officers (CIOs) across the globe strive to exploit the vast amount of data they have within
their organizations to transform how they do business. The ability to gain insight into the information you have can make a huge difference in everything you do, from the experience you deliver to customers, to the efficiency of your business operations.
Your supply chain creates a massive amount of information. In fact, you could think of it as a “data lake” into which informa- tion constantly flows from systems such as accounts payable and receivable, Electronic Data Interchange (EDI), and Business-to- Business (B2B) integration, warehousing, transport, and logistics but also information from customers and suppliers. Being able to monitor, measure, and analyze this data in a near real-time envi- ronment will deliver tangible monetary value to your organization.
Applying analytics to the supply chain is still relatively new. As the technologies for intelligent analysis and data visualiza- tion explode, it is a great time to look at what your business can achieve through a comprehensive supply chain analytics strategy.
About the Book Supply Chain Analytics For Dummies, OpenText Special Edition, pro- vides you with a handy book full of everything you need to know to get started on your journey. This book consists of seven short chapters that cover
» What supply chain analytics is and what benefits it offers your business (Chapters 1 and 2)
» Which metrics and key performance indicators (KPIs) should you look to measure (Chapter 3)
» Where in your supply chain you can apply analytics and how this differs by industry (Chapter 4)
» How to begin implementing supply chain analytics (Chapter 5)
2 Supply Chain Analytics For Dummies, OpenText Special Edition
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» What future directions you can expect from supply chain analytics (Chapter 6)
» Ten tips for optimizing your supply chain (Chapter 7)
Foolish Assumptions When writing this book, I tried to make this book as accessible and readable as possible for everyone. The content is designed for supply chain managers and directors looking to implement analytics as well as line of business managers who wish to know more about the insights they could be receiving through supply chain analytics.
Icons Used In This Book I use this icon when there’s something important you should commit to memory before you progress on with the chapter.
You’ll find these icons dotted throughout the book, giving you helpful suggestions and bite-sized nuggets of useful information.
I don’t just know what to do. I also know what not to do. Look out for these icons to help you avoid some common pitfalls.
This is the jargon buster icon. When I have to get technical, I give a little plain English explanation of what I mean.
CHAPTER 1 Defining Supply Chain Analytics 3
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