Finding Supply Chain Savings with Data Analytics & Reporting
If there was a way to identify areas that could improve your bottom line, wouldn’t you want to know about it?
Well, with big data analytics and reporting through your 3PL, you can pinpoint numerous areas within your supply chain that can likely be improved upon for greater efficiency and possibly even help uncover some hidden savings.
In this blog post, we will take a look at a few of the ways that data analytics and a solid reporting strategy can help you make better business decisions that lead to better optimization of your supply chain.
Why use Data Analytics?
Data analytics is the act of collecting raw data and then analyzing it in order to find areas of weakness that could use some attention.
In a nutshell, leveraging data analytics allows companies to make better business decisions by providing a way to compare progress in various areas of their business.
Performing data analysis is a good routine practice as it can be used for more than making decisions based on what worked or did not work in the past. However, under the umbrella of data analytics is one subgenre with a primary focus on making comparisons strictly as a guidebook for future growth and scalability.
This is called predictive analytics.
Predictive analytics looks at patterns and trends. As time passes, and you obtain more and more data, your predictive analysis each time will likewise build a more accurate view as it gathers more reference points in time in order to make comparisons that gauge growth.
Data analytics can seem overwhelming to a company in the beginning, with the foremost question being “who is going to collect this data?” This is often followed up by the second most asked question “who is going to analyze the data?”
The great part about data analytics is that it can be fully automated with little to no employee interaction. Yes, there will need to be some initial onboarding as it is implemented, but this will generally only need to be the case for the handful of people who will need to have access to raw business data. Outside of that initial introduction to how data will be collected, about 95% of the process is a hands-off approach.
Better yet, if you are already partnered with a 3PL, talk with them about handling your data analytics and reporting. Chances are good that they will have all the technology needed to handle this request.
Reviewing Your Data Analytics with Report Cards
How many times was the wrong weight entered?
How many times was a duplicate BOL used?
How many times were you missing accessorial charges?
All of these errors can not only drastically skew your forecast, they can actually hurt your bottom line.
Knowing where these mistakes are being made, gives you the opportunity to fix them. For example, if you know that your Ft. Myer’s location has very few issues that need to be resolved, but your Richmond location is riddled with errors, then you know where logistics managers need to focus their attention and they can then begin to delegate accordingly and in a much more efficient manner.
Measuring this sort of data across the entire landscape of your business from warehouse to shelf and reporting back to the appropriate departments is one of the very best ways to leverage your data.
Identify Trends with Data Analytics
Data that you collect from your freight management team or 3PL can be used for much more than just analyzing the shipping portion of your supply chain. This data can also show many different trends in your sales, both geographically and from month to month. Since the reports will show you comparisons of, for instance, last January versus last January’s shipping data, you can tell if your outgoing shipments have increased, decreased or remained the same. If they have decreased, this may mean that you need to dig deeper into what would cause such a drop in sales. Pinpoint the highest point it was at when they began to decline and analyze what was going on during that window of time, retrace your steps, and then correct it. If it remains stagnant, you may want to look into additional marketing or advertising to increase sales. If they increased, you could think about implementing practices made in this market, into another one.
This information can also show you month to month what you’re sending out of each location and where your sales fluctuate from month to month per said regions.
If you’re interested in learning more about how data analytics can improve your supply chain and save you money, contact the team at Redwood for a free consultation!