Business Intelligence is More Important to Supply Chains Than Ever Before
Business intelligence (BI) tools transform the raw data collected by logistics technologies into meaningful reports and predictions that managers can use to take actions for a more optimized supply chain. Business intelligence is just that: intelligence that makes business smarter and better. These tools can help gather insight into the inner workings of complex, ever-changing supply chains by providing the most detailed and up-to-date analysis, accurate predictions, and actionable strategies for logistics processes.
What is business intelligence?
Business intelligence (BI) doesn’t have a specific definition. It’s an overarching term that refers to infrastructure, software, tools, and services that analyze information. The goal of business intelligence is to optimize performance and decision-making by analyzing, formatting, and strategizing big data. Essentially, it takes large quantities of hard-to-understand data and makes it easy to understand and utilize.
There are a lot of logistics technologies available, like transportation management systems (TMS), warehouse management software (WMS), LTL software, customer management software (CMS), enterprise resource planning software (ERP), and other logistics solutions. Implementing these technologies are proving vital to creating thriving logistics operations and businesses on the whole.
But each of these software solutions has thousands, if not hundreds of thousands, of data points. Trying to go through all of this data and analyze it is too much for a human to handle. Traditional reporting requires that managers extract all the data and then try to make sense of it, which can take hours out of every day.
Business intelligence software uses artificial intelligence and machine learning to do the analysis in a fraction of the time. It can then transform this analysis into digestible, visual data points that managers can use to make decisions.
How do BI solutions work?
BI tools are being used in a variety of industries, but the supply chain is one of the most important and interesting uses. There are thousands of data points each day for logistics companies to weed through. Salaried individuals spend their entire days “data mining” to sift through large amounts of analytics points.
Business intelligence software takes a new approach to data by doing these tasks to pre-analyze the information and make it more digestible for supervisors. For logistics managers, this means freeing up time to focus on managing people, rather than managing data.
BI tools provide four primary types of information:
- Scorecard reports with visual metrics for each variable
- Real-time dashboards for a daily (sometimes even hourly) overview of what’s going on in the supply chain
- Benchmarks that compare business performance against competitors to understand placement in the industry
- Benchmarks that compare current performance with previous performance to determine overall trajectory (and help to analyze future risks and opportunities)
The BI tool can collect all of the data points from every logistics tool and software a company uses in order to come up with real-time analysis. It takes a comprehensive look at every aspect of the business to create an intuitive breakdown and predictive actions based on the current situation at hand.
Business intelligence in the supply chain
The primary benefit of employing BI tools is that it enhances visibility into the supply chain. Logistics managers can not only access data in a more digestible way, but they can also then leverage the BI to best utilize that data for strategic decision-making. Managers can see where they are spending the most money, wasting the most resources, lacking in performance, trending upwards, or trending downwards. The BI tool not only pinpoints these issues but can also help identify the root causes and recommend corrective actions. After corrective actions have been taken, the BI will then track how these changes are impacting the data and offer even more solutions.
The purpose of business intelligence is to optimize the supply chain at maximum efficiency. For some companies, this might be a macro-scale change like implementing more robotics tech. For others, it might be as micro as trying to understand how to improve a 95% delivery rate to a 99% rate. BI can do it all.
Business intelligence tells managers where the supply chain is failing or performing below optimal to address those areas that make the biggest difference.
Benefits of business intelligence
The “benefits” of this kind of BI software aren’t just an advantage. They’re necessary to compete in the supply chain sector. BI tools offer corrective actions that can:
- Accelerate an agile supply chain with real-time decision making
- Reduce unnecessary spending
- Enhance efficiency
- Improve customer service
- Reduce errors in data analysis
- Facilitate greater transparency and communication between partners
- Predict future trends and mitigate potential risks
- Identify and address red flags along the supply chain, like potential upstream failures
- Address situations comprehensively and with customized approaches
Today’s supply chains are struggling. Following driver shortages, increasing demand for e-commerce, and the global pandemic, the strain on the supply chain has never been more intense. The kind of insight that business intelligence allows for is going to be the number one instrument for enhancing supply chain efficiencies moving forward.
We live in a world where data reigns supreme. But data alone isn’t enough. It’s the story that data tells that truly matters. Business intelligence tools provide the directional information needed to take action and make strategic decisions that are constantly enhancing the supply chain.
Did you know that Redwood Logistics offers business intelligence solutions? We create custom solutions such as RedwoodConnect 2.0 that connect, integrate, and analyze your data to provide real-time, high-value insights into your business.
Reach out to our team for a free consultation about your current and desired logistics technologies and how business intelligence can fit into your strategy.