Maturity is key to analytics effectiveness

This is an excerpt of the original article. It was written for the May-June 2017 edition of Supply Chain Management Review. The full article is available to current subscribers.

May-June 2017

Trust hasn’t always been an element in supplier relationships; all too often buyers have been encouraged to carry a big stick and get tough with suppliers to get the best price—no matter the cost. That approach to procurement is beginning to change.

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Many organizations have adopted analytics initiatives because of their need to aggregate vast amounts of data and to automate the identification of patterns and trends. The supply chain alone produces a large enough data set that analytics can be applied to help identify areas for process and performance improvement. Data generated through internal operations, as well as transactions with suppliers and customers, can be used to uncover small changes that can make a big impact on an organization with regard to efficiency gains and even cost savings.

Many supply chain professionals report that their organizations have increased their investment in analytics over the last three years, according to a recent APQC survey. This survey looked at the analytics practices of organizations, as well as the structure of these efforts. APQC surveyed supply chain professionals from a variety of organization sizes and regions and from 36 industries. APQC’s analysis found that organizations have several areas of focus for their supply chain analytics efforts, and that most organizations have a formal analytics structure. However, the payoff of these efforts may not be at the level organizations expect.

Analytics inputs and outputs

Supply chain organizations focus on a variety of goals for their use of analytics. As shown in Figure 1, when asked about seven possible goals or activities, a majority of respondents highly agree or agree that each goal or activity is an area of focus. This indicates that organizations want to see a variety of results from their supply chain analytics efforts.

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