Supply chains around the world have been flipped on their heads, due in part to the bullwhip effect. What’s that, you say?
Think of the action a whip takes with a simple flick of the wrist. The momentum begins on the wider end, but as time elapses, that same amount of momentum gets concentrated into the smaller and smaller end of the whip. That means the velocity of the moving tip is much more dramatic than it was in the beginning, even surpassing the speed of sound and creating a small sonic boom (the ‘crack’ sound).
The pandemic triggered a significant bullwhip in the supply chain. There was significantly greater demand for some goods and significantly less for others, working shortages changed timelines, and aging infrastructure all contributed to the disruption of our chain of supplies.
As tough as this has been for suppliers, consumers, and everyone in between, it does provide an opportunity. Now’s your chance to take a step back, breathe, and innovate using business intelligence and supply chain so you can come out better positioned than ever before.
In other words, get ready to pounce.
What Is Supply Chain Business Intelligence?
Business intelligence (BI) describes the action of converting data into meaningful knowledge. It uses a mix of methods to get the most accurate data and predictions possible by combining a variety of advanced statistical algorithms through:
- Business forecasting
- Machine learning
- Artificial intelligence
The purpose of this more advanced supply chain business intelligence is to improve efficiencies and accountability while saving time and eliminating costs. It provides key decision-makers with high-impact information. That information leads to actionable strategies. Those strategies are then used for predicting supply chain performance and increasing profitability.
information → strategies → performance → profits
How does business intelligence do all that? By analyzing each point along the supply chain journey:
- Demand planning
- Transportation operation
- Inventory planning
- Allocation and replenishment
- Merchandise planning
What Are Business Intelligence Tools?
Business intelligence tools include various platforms, software, and dashboards used to:
- Connect to any supply chain platform, format, and data to aggregate and transform digital information.
- Complement human creativity by leveraging machines and algorithms to organize data and automate repetitive tasks.
- Maximize revenue and profit performance while optimizing spend.
If you’re more of a visual person, here’s a handy infographic that further illustrates the benefits of BI:
From manually entered spreadsheets to embedded business intelligence software that uses dashboards and mobile capabilities, there’s a whole host of BI tools to use. A couple of other examples are:
- Data warehousing that integrates data retrieval from different sources
- Process mining that analyzes event logs
- Unified Modeling Language that helps specify, visualize, construct, and document software systems
- Business Performance Management that uses the selection of a goal and its consolidation and review to manage an organization’s performance
How Do BI Tools Turn Data into Information?
Supply chain and BI work together in demand planning, inventory planning, allocation and replenishment, and merchandise planning through a series of eight steps:
- Analysis: Combine raw data with trends, what-if scenarios, and various modeling techniques.
- Reports: Create functional visuals to better understand the data.
- Monitoring: In real-time, use data to enable quick and informed decisions.
- Dashboards: Manage business performance easily in one place.
- Scorecards: Provide something to measure KPIs against.
- Collaborative Business Intelligence: Share information across multiple stakeholders.
- Advanced Analytics: Take analysis another step forward and include visualization.
Mobile Business Intelligence: Use your device to keep updated no matter your location.
It’s time to give some actual examples of how hard-working BI solutions are built to guide the supply chain processes through insights, collaboration, and simulations.
Inventory Gets a Voice
Algo’s Inventory Planning Platform has user-defined cluster segmentation to identify top performers and anomaly detection that minimizes out-of-stocks while balancing financial KPIs. This means countless hours of spreadsheeting are saved, along with your sanity. In short, product performance is supercharged across the entire omni-channel retail and distribution networks.
All Functions Are Part of the Conversation
Algo’s intelligent virtual assistant is a world-leading platform that gets things done. The natural language, conversational user interface is great at listening, following directions, and working fast. Though it takes a village to effectively manage a supply chain, you can now collaborate and take action cross-functionally to analyze, strategize, and execute.
Unique Nuances Guide Forecasts
Algo’s Demand Planning Platform provides next-level forecast accuracy based on each organization’s unique nuances by using equal parts science and art to optimize:
- Store and product allocation across hundreds of millions of SKU/Store combinations
- Sales opportunities that support topline revenue and profitable product mix
- End-to-end processes for allocating funds, forecasting marketing event outcomes, approving programs, and tracking/measuring program ROI
- Promotion planning by predicting consumer behavior by factoring in demographic data and product attribution
- Product assortment accounting for localization impacts and historical performance
- Price elasticity and gap analysis by simulating an unlimited number of pricing scenarios
The Benefits of Using Business Intelligence Tools in the Supply Chain
We’ve listed the features, but what about the benefits of using supply chain business intelligence? For starters, your supply chain will transform from start to finish. But let’s break that statement down a bit so you can get a better idea about each benefit.
- Improve operations which, in turn, reduce costs and improve relationships with strategic partners, suppliers, logistics vendors, and customers.
- Automatically presents organized data and analysis in easy-to-understand visuals, making it obvious which next step to take.
- Determine performance of each link in the chain by assigning metrics and weighing averages.
- Give deep data insights that aren’t normally available.
- Work in real-time, utilizing an easy-to-digest dashboard overview of exactly what’s happening when, where, and why.
- Benchmark against competitors, giving a complete picture of the marketplace trends that inform negotiations and responses.
Why Do Supply Chains Need Business Intelligence Tools?
Just like a rancher may choose to use a bullwhip to guide their cattle, your business may choose to use BI tools to guide its supply chain success.
Besides, your competitors are already infusing business intelligence into their own chains. Do you want to hem and haw over the decision to jump on this technological bandwagon, or be left behind with the swine (except the two pigs in Lonesome Dove, of course)? Business intelligence tools are quickly transforming from being a nicety to a necessity.
Visualize What BI and Supply Chain Can Do
Can you see it? Are you able to visualize what business intelligence can do for your supply chain?
Let Algo help you take a look at it with fresh eyes—request a demo now!
About the author
Combining human centered AI with deep domain expertise, Algo’s analytics enriched supply chain intelligence platform helps suppliers and retailers plan, collaborate, simulate and execute a more efficient supply chain.