Business intelligence (BI) tools ingest data, process it, and present it in user-friendly ways. Such tools are proving to be quite a boon for supply chain businesses because they facilitate data-driven decision-making, help in optimizing the various aspects of the supply chain, and make it easier to adapt to changing market conditions.
In a supply chain, all key components and functions need to work together like clockwork to ensure that the process from procurement to delivery is smooth. BI tools offer valuable insights into each stage of the supply chain, which an organization can use to ensure seamless operations.
Data in the Supply Chain
To comprehend how and why a supply chain business can benefit from leveraging BI, it would be helpful to understand the data in a supply chain. Various points and processes in the supply chain churn out data in some or the other form. This data can drive growth if utilized well. Retailers get data from the point of sale (POS) systems. Suppliers provide data regarding lead times and pricing. During transportation, the business receives some data from GPS or RFID systems. Additionally, there will be data related to market conditions, government regulations, and financial performance. These days, a business can also get plenty of data from social media platforms. All of this data can help a business cross the bridge between surviving and thriving.
Challenges Revolving Around Data
The data from the various points of the supply chain comes with its unique set of challenges. Data needs to be accurate, complete, and of a high quality if it has to make a positive difference to business decisions. Ensuring data quality is a huge challenge. Handling the volume of data is another significant challenge. The sheer amount of data coming in can be overwhelming. Additionally, the data from the various sources might be in diverse formats, making data standardization and integration quite challenging. The business also needs to protect sensitive data from breaches and cyberattacks. While protecting the data from the wrong people, it is also necessary to ensure that it reaches the right people at the right time. Sometimes, data gets trapped in isolated systems, creating data silos and utilization issues. For a competitive edge, a supply chain business needs to extract meaningful insights from the data and be able to manage and utilize it in real-time.
Benefits of Business Intelligence
BI can help a business overcome most, if not all, of the challenges related to data. These are some of the general benefits that business intelligence offers:
- Better decisions: BI allows a business to get better insights into operations, making it easier to reflect on data and act on it. With BI, the decisions related to the business are more likely to be based on reliable facts and proper analysis, rather than mere intuition. BI enhances forecasting and leads to better financial planning and resource allocation.
- Optimization of processes: BI makes it easier to spot and fix weak points in processes. It increases the efficiency of the operations, leading to reduced costs and better ROI.
- Competitive advantage: BI ensures that all relevant data is available in real-time to the right users. Because of this, the business will be in a better position to respond to market trends and changes swiftly, providing it with a competitive advantage.
- Risk identification and mitigation: Having relevant information available at their fingertips allows those in authority positions to identify risks and take timely actions to mitigate those risks.
Apart from these benefits, BI also helps improve employee productivity, assists in ensuring compliance with industry standards and government regulations, and opens up opportunities for increased customer satisfaction.
A small business can also benefit from training its employees in the use of business intelligence tools. However, it is important to select BI solutions that are suitable to the specific needs of the business. Some tools have extensive features, which may not be necessary for every business. Simple BI tools that serve the objectives of the business are sufficient. Excel's powerful BI capabilities (such as data exploration, manipulation, and visualization) and seamless integration with other tools make it an ideal choice. By enrolling in an advanced Excel course, you can effectively harness its full potential in business intelligence.
How Does Business Intelligence Assist the Supply Chain
BI provides real-time visibility into all the aspects of the supply chain and thus facilitates informed decision-making. It can aid a supply chain business at the strategic level, operational level, and tactical level. Highlighted below are some of the ways in which business intelligence can assist a supply chain business at different levels:
At the Strategic Level
BI empowers the decisions at the strategic level with timely information. It can help improve the overall planning related to the functioning of the supply chain.
Because BI offers consolidated data from various sources, it facilitates several decisions. For instance, BI can make it easier for a company to prioritize areas of production. The information from BI can help determine the most profitable combination of goods. The company can then divide the production capacity in the most optimal ratio. Reorientation of production capacity based on trends and seasons also becomes easier with BI.
Business intelligence tools can also help management decide which low-margin products can be dropped from production. Additionally, these tools can help the management figure out the increase in production capacity necessary for new profitable items. BI also opens the door for expansion into new markets.
At the Tactical Level
Business intelligence simplifies all medium to short-term decisions for a supply chain business. It expedites the selection of the best solutions for transportation and warehousing. Regarding logistics, a supply chain business has to decide between in-house management or third-party involvement. BI can assist in choosing the most beneficial option between the two based on the available data. By furnishing information from different points in the supply chain, business intelligence optimizes warehousing and inventory management and thus reduces costs related to excess inventory. By extension, it also fortifies the capacity to fulfill orders on time and boost customer satisfaction.
Real-time visibility features of business intelligence tools help track and manage the schedules of supply and production. Business intelligence tools allow organizations to create custom dashboards that can provide information about the key KPIs at a glance. Since BI draws data from internal and external sources, it can help create unique KPIs that can detect problems more quickly and easily, and facilitate the formulation of better solutions.
At the Operational Level
A supply chain business can also employ the advantages of BI to increase the efficiency of daily routine tasks. Even when everything is well-planned, there are unpredictable factors that can affect day-to-day operations. BI can help a business turn the situation around and meet customer demands and expectations, as it provides actionable information and answers to questions relevant at the operational level.
BI technology can help avoid most supply chain disruptions. It can help prevent bottlenecks and unnecessary delays. For instance, with the aid of BI, a business can determine the routes with the most frequent delays, and either find alternatives or work around the causes.
A supply chain business can use BI to manage incoming and outgoing materials and products. This will prevent problems such as shortage of raw materials at the time of production or cargo theft.
The production and movement of certain substances require strict compliance and approvals at every step. This could become tedious without the aid of BI. Business intelligence solutions can fetch updates about requirements and help meet those requirements to prevent issues.
Conclusion: Time to Tap Into The Capabilities of Business Intelligence
The question is no longer whether or not a supply chain business needs to adopt business intelligence tools. Rather, every competitive business needs to figure out the most effective and quick way to get started with business intelligence and capitalize on its transformative potential. With business intelligence, supply chain businesses can harness the power of AI, deal with the volatility of the supply chain, and navigate the complexities of the modern business landscape.
