The last few years have been challenging for the supply chain, as all its strategies and functions have been challenged by multiple supply disruptions. This has made it clear that the industry has a serious problem in capturing and analyzing supplier data, which has a direct impact on business.
Research by Deloitte shows that only 26% of companies are able to predict risks in their supply chain and 11% have suffered damages resulting from problems faced by their suppliers.
So what can companies do to address this challenge? Invest time and money in data usage to empower Purchasing teams to deal with an increasingly complex supply chain.
Big Data in Supply Chain Management
Supply chain management depends directly on a good data strategy, as it is necessary to capture information, clean this data and keep it updated so that the analysis is successful and generates the insights and predictions necessary to reduce risks and seek the best suppliers.
And Big Data links this relevant information in a way that makes analyzing this data easier and helps the Purchasing sector make the best decisions and improve relationships with suppliers.
Despite the importance of the Purchasing sector in investing in a data strategy and Big Data, many companies still struggle to identify the benefits that new technologies can bring and are slower in adopting data analysis in Purchasing, when compared to other sectors, such as marketing.
But there are two explanations for this. According to McKinsey, the adoption of Big Data in supply chain management faces a shortage of leaders with data analysis skills and, consequently, without the necessary vision to understand its benefits; and the lack of a truly efficient data strategy that is capable of capturing information throughout the chain.
Impacts of Big Data
On the other hand, the importance of Big Data in supply chain management is clear. The technology contributes to everything from identifying problems in communication between the company and its suppliers, to negotiations and even to reducing delivery times by the supplier.
Improved decision making
With Big Data, decision-making becomes fact-based due to the more consistent collection and analysis of structured and unstructured information.
Supplier management
Information collection about each supplier can be done in real time and from various internal and external sources automatically.
Supplier performance
Likewise, Big Data allows us to analyze a range of information that goes beyond costs, delivery times and quality of inputs. Data related to the supplier's operational performance, financial health and compliance are also used to determine each supplier's performance and whether it is time to look for other options.
Predictive Analysis
Big Data enables companies to take predictive, rather than reactive, action to address supply chain challenges, such as addressing supply chain risks and creating more efficient sourcing strategies.
Gartner research has shown that 29% of companies reported higher levels of ROI after implementing data analytics into their operations. This indicates that integrating Big Data into all stages of supply chain management brings robust business benefits.
Gain productivity, monitor cost and contract developments, and obtain global data. COSTDRIVERS helps you optimize your negotiation time and improve the performance of your Purchasing department. contact us and learn more.