More than ever, data management tools are shaping the future of supply chains, and companies are embracing the potential of data-driven decision-making in their supply chain. This entails collecting information from diverse sources, spanning suppliers, manufacturers, distributors, and customers.
These advanced analytics tools unearth patterns and correlations that empower managers to make informed decisions. This includes predicting demand, optimising inventory, and identifying inefficiencies.
I’ve been quite vocal about the need for companies to adopt a strategic supply chain data roadmap as the first step toward aligning supply chains with business goals, and that hasn’t changed. Why? Because harmonising data provides a comprehensive view of a company’s supply chain ecosystem.
Incorporating data into supply chain strategy
A data-driven supply chain strategy is crucial for building trust, achieving targets, and maintaining a competitive edge in the market. But that’s not the only advantage; with it, you can minimise uncertainty, optimise production, and enhance inventory management.
Effective data management begins with acknowledging the significant role it can play for you and setting up an effective strategy. This empowers businesses to streamline their supply chain and make the right decisions.
Given the constant flow of information in the supply chain, suppliers, manufacturers, distributors, and retailers collaborate to ensure the transformation of raw materials into finished products for the consumers. A high-performing supply chain prioritises customer satisfaction, sustainability, and profitability with accurate data and the ability to translate them into actionable insights. This enables supply chain managers to observe production, reduce uncertainties, and enhance decision-making.
However, I must add that an efficient supply chain requires more than just data gathering, but also practical data interpretation. Firms must have a proper data analytics strategy for their supply chain.
Although indigenous startups like Main One and Data Integrated Limited are vital players in Africa’s supply chain analytics industry, Africa has a meagre 1% share in the global cloud market, necessitating more investment in the area. This also means that more African organisations must incorporate data-driven supply chain strategies.
In this digital and technological age, data-driven decision-making saves businesses from making costly mistakes based on assumptions. Therefore, I urge small and medium-sized African enterprises to leverage data-driven solutions to enhance their supply chains.
Effective data management begins with acknowledging the significant role it can play for you and setting up an effective strategy. This empowers businesses to streamline their supply chain and make the right decisions.
What makes data so critical to supply chains?
Data analytics is crucial in supply chain management, particularly in demand forecasting. Accurate forecasting enables effective production and inventory planning for customer satisfaction. By analysing historical sales and customer behaviour data, businesses can effectively plan production and manage inventory to meet customer demand without overstocking or shortages. This prevents excess inventory costs, including storage and handling fees.
Studies have shown that businesses mulling the design of a supply chain data roadmap are confronted with limited expertise in data tools and databases, insufficient data, deficient skills in data analytics, and challenges in drawing correlations from data patterns, thereby constituting impediments to business model improvements and new product development.
On the flip side, the risk of cyber-attacks and data breaches is heightened due to the surge in the inflow and storage of sensitive data. Data security is a significant concern, especially in the logistics industry. Alongside a data strategy, there must be proactive data security measures that will mitigate these risks.
As more businesses embrace data-driven systems, Internet of Things (IoT) devices, and blockchain technology is veritable for the real-time data collection on inventory, warehouse conditions, and asset locations improving decision-making.
In Africa, blockchain technology is gaining momentum in helping to optimise supply chain operations by enabling efficient sourcing and delivery, enhancing coordination between suppliers and buyers, and improving access to finance. It can improve traceability, reduce costs, and mitigate risks by providing transparent and tamper-proof transaction records. This could be pivotal in driving intelligent supply chain management.
Read also: ACSC seeks tech adoption in Nigeria’s logistics, supply chain industry
For instance, banks and credit providers can leverage blockchain technology to enhance supply chain financing by accessing real-time and verifiable transactions, eliminating the need for physical audits or expensive financial reviews. Also, improved visibility and traceability through blockchain-enabled solutions or secure digital platforms can aid firms in addressing operational and economic challenges, ultimately enhancing their dependability and creditworthiness.
I understand that doing business in many African nations is challenging, but I have confidence in adopting technology and digital systems. And that’s why every small and medium-sized business should embrace it as soon as possible, because the possibilities are endless. Data analytics will significantly shape the future of the supply chain industry. As it can enhance your supply chain by providing real-time information on your shipping routes, delivery times, and costs. It can identify efficient truck routes, shipment schedules, and so on
Well-developed data analytics in the supply value chain will streamline various stages of supply chain operations, including planning, sourcing, manufacturing, and delivery. The benefits are enormous.
And as technology advances, data analytics will continue to grow significantly for making informed decisions in supply chain management. The call? Every business should not only embrace it but also develop a strategy to maximise it.
