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TABLE 4-3 How Analytics Benefits Inventory Visibility Business Benefit from Applying Analytics Data Owner Data Sources

Example Metrics

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Improve inventory visibility

Procurement

Buying director

Manager

B2B integration platform

ASN timeliness

Improve supplier management

Operations director

Manager

ERP Delivery timeliness

Improve inventory management

Transportation

Logistics director

Manager

Accounts payable/ receivable

Quantity variance

Implement vendor managed inventory

CFO

Financial director

Warehouse management system (WMS)

Delivery count and frequency by trading partner

Reduce logistics costs

Operations

Logistics

Transportation Management System (TMS)

Count of nodes by SKU/order

Reduce LWOE write-offs

Operations

Logistics

ERP/MRP Percentage of units wasted due to expiration

Reduce warehouse/ distribution center carry costs

Operations

Logistics

ERP/WMS/TMS Total logistics cost per SKU/RMC

 

 

CHAPTER 4 Use Cases for Supply Chain Analytics 35

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that don’t provide good service and value. You can make sure that you’re getting what you’re paying for, and quickly make adjust- ments where that isn’t happening. Table 4-4 highlights how the quality reporting process in relation to trading partners can bene- fit from the use of analytics, who benefits in the organization, and the sources of information that are used as part of this particular use case.

TABLE 4-4 How Analytics Benefits Partner Performance Reporting

Business Benefit from Applying Analytics Data Owner Data Sources

Example Metrics

Improve supplier management

Procurement

Buying director

Manager

B2B integration platform

Returned product count and frequency

Improve supply chain management

Product director

Manager

ERP/B2B integration platform

Delivery On-Time and In-Full (OTIF)

Improve renegotiating & bargaining position

Supply chain director

Manager

Third-party trading exchanges

Order and price accuracy

Develop strategic supplier relationships

Operations director

Manager

Accounts payable/ receivable

Invoice accuracy against PO and contracted price

Reduce procurement costs

Quality team ERP/quality reporting System

Track supplier compliance and quality resolution speed

Improve customer experience

Compliance officer

Product management

B2B integration platform

Top SKU/RMC with quality issues

 

 

36 Supply Chain Analytics For Dummies, OpenText Special Edition

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Procurement Reporting Procurement reporting provides the information foundation improving the procure-to-pay process. It provides a clear idea of the amount of business the company is doing with each of its suppliers and how well each supplier is performing. Imagine a large organization that has recently completed an acquisition and now has thousands of new suppliers. If it can’t quickly find out the exact spend with these suppliers, supply chain costs are likely to mount significantly. Table 4-5 highlights how the procurement reporting process benefits from the use of analytics, who benefits in the organization, and the sources of information used in this use case.

TABLE 4-5 How Analytics Benefits Procurement Reporting Business Benefit  from Applying Analytics Data Owner Data Sources

Example Metrics

Reduce supply chain spend

Procurement

Buying director

Manager

B2B integration platform

Top trading partners by spend

Improve supplier management

Product director

Manager

ERP Price variance against contracts

Improve sourcing strategies

Supply chain director

Manager

Accounts payable/ receivable

OTIF rates

Reduce procurement costs

Operations director

Manager

ERP/B2B integration platform

Order acceptance

Improve bargaining position

CFO

Financial director

Marketing

Product management

ERP/B2B integration platform

Top products by invoiced amount

 

 

CHAPTER 4 Use Cases for Supply Chain Analytics 37

These materials are © 2017 John Wiley & Sons, Ltd. Any dissemination, distribution, or unauthorized use is strictly prohibited.

Business Benefit  from Applying Analytics Data Owner Data Sources

Example Metrics

Improve negotiation leverage

Operations

Procurement

ERP/B2B integration platform

Volume of transactions by trading partner

Reduce procurement costs

Transport

Logistics director

Manager

ERP/B2B integration platform

Top trading partners by spend

 

 

38 Supply Chain Analytics For Dummies, OpenText Special Edition

These materials are © 2017 John Wiley & Sons, Ltd. Any dissemination, distribution, or unauthorized use is strictly prohibited.

 

 

CHAPTER 5 A Six-Stage Approach to Getting Started 39

These materials are © 2017 John Wiley & Sons, Ltd. Any dissemination, distribution, or unauthorized use is strictly prohibited.

A Six-Stage Approach to Getting Started

For most organizations, analytics has traditionally consisted mainly of looking at historical data in spreadsheets. Decisions have been as much about gut feel as they were about intelli-

gent analytics. What could possibly go wrong? (You already know the answer to that, right?) Supply chain analytics can help an organization move from being a gut feel kind of company to an analytics-driven one.

It all starts by answering a few questions: What do I need to mea- sure? Where’s my data? Who should be involved? What software do I need? How can I measure success? I try to help you find those answers in this chapter.

Step 1: Identify the Business Problem Start Step 1 by identifying the business problem and the KPI met- rics that will be used to analyze and address the problem. Per- haps you need to release more cash from your supply chain, or reduce inventory levels, or address challenges you’re having with on-time, in-full orders that are affecting your customer relation- ships. This step is about fully understanding the problem. Conduct

Chapter 5

IN THIS CHAPTER

» Planning and building an analytics initiative

» Measuring the success of an initiative

» Discovering a short list of things to avoid

 

 

40 Supply Chain Analytics For Dummies, OpenText Special Edition

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a thorough root cause analysis to discover why the problems are occurring and what actions to take to reduce inefficiencies and waste.

From there, you can begin to structure your analytics program, setting in place the KPI levels you want to reach and the metrics you need to measure to get there. After that’s in place, it should be obvious which transactions are of interest.

Just because you can doesn’t mean you should. Many companies get new analytics tools and jump straight into measurement. They don’t stop to consider the business problems they’re trying to solve. These are the companies who struggle to justify their analytics investment.

When planning a supply chain analytics strategy, a good place to start is to determine the maturity level of your current activities so that a baseline operational state can be determined. Luckily, a number of services are available to help. Many organizations, like analytics training company TDWI, have developed Analytics Maturity Models. These models help an organization understand the phases of maturity in analytics, interpret assessment scores, and provide best practices to move forward.

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