Supply chain management is essential for a manufacturing business to thrive in volatile market conditions. Here, we’ll discuss the role of business intelligence in supply chain and why you should adopt BI solutions to streamline your enterprise.
The supply chain is a crucial part of manufacturing, retail, and eCommerce businesses. It involves various steps, processes, and parties. It is an interconnected journey from sourcing raw materials to delivering the final products to customers. While most industries have some form of supply chain, it is prominent in manufacturing, industrial, automotive, and consumer goods etc.
The changing market conditions and global scenarios have made enterprises invest in new tools and technologies to manage their supply chains effectively. Digital transformation and Industry 4.0 have put supply chain analytics at the forefront. According to IDC, 55% of G2000 OEMs will redesign their supply chains using AI by 2026. As per a report by Research Nester, the supply chain analytics market was $9.8 billion in 2024 and is predicted to reach $86.5 billion by 2037 at a CAGR (compound annual growth rate) of 18.5%.
Business intelligence tools like Power BI and Tableau play a vital role in supply chain management and analytics. Many MSMEs and large enterprises are partnering with BI companies to streamline their supply chains and increase sustainability. In this blog, we’ll read in detail about the role, benefits, challenges, and tools used for business intelligence in the supply chain.
Business intelligence is a tech process where you collect, store, analyze, and interpret large amounts of data to derive meaningful insights and use them to make day-to-day decisions. BI can be implemented in any department and industry. It is instrumental in the supply chain for a variety of reasons. By implementing business intelligence in the supply chain, an enterprise can use data-driven insights for strategic and tactical planning in the short-term, mid-term, and long-term. Let’s take a look at this quick guide to supply chain analytics for dummies.
Data is the most vital asset of an enterprise. In today’s world, you should know how to manage your business data and use it to unlock your true potential. Business intelligence is about converting raw data into analytical insights and user-friendly reports. By using tools like Microsoft Power BI in the supply chain, you can collect data from numerous internal and external sources and use it for analytics. The collected data is stored in a central repository like a data warehouse or a data lake. It is integrated with BI tools to share the generated reports with employees.
Advanced business intelligence tools are powered by artificial intelligence and machine learning algorithms to provide meaningful insights through predictive analytics for supply chain management. You can run different types of analytics (descriptive, predictive, prescriptive, cognitive, etc.) to get a clear picture of your business and ways to improve overall efficiency. For example, with predictive analytics insights, an enterprise can predict the future demand for a product and adjust production capacity, distribution, and sales to ensure the products are easily available in the market when the demand increases.
Data visualization is the process of converting insights into graphical and easy-to-understand reports using interactive dashboards. These dashboards are customized for different metrics (KPIs) based on your requirements. The business intelligence company will set up the necessary connections and design visually appealing and useful dashboards for the departments in your enterprise. Employees can use the drag-and-drop features to generate reports instantly and make decisions based on data-driven insights. The visualizations can also be used to create presentations, etc.
Business intelligence in the supply chain is also useful for real-time monitoring of various activities, tasks, and processes that ensure the production cycle and distribution are continuous. For real-time insights, the BI tools are connected to IoT (Internet of Things) devices, which collect data from equipment and workers and share it across the network. This allows factory managers and supervisors to stay alert about the sudden changes on the floor and make quick decisions to prevent accidents, reduce risk, or handle breakdowns. It is also useful to make alternative transportation and distribution arrangements to deliver the products to the sellers/ customers at the right time.
Business intelligence tools are not limited to deriving insights. These can also be used for collaboration and communication. For example, different parties of the supply chain – vendors, enterprise, logistics providers, warehouse managers, distributors, marketing teams, retailers, etc., can access the dashboards to use the insights for planning their stages of the process, send messages and updates to others, and coordinate easily with them. Instead of using independent data silos in each department (which usually have outdated information), they can rely on the central repository to access the latest data. It prevents confusion and streamlines the processes.
Supply chain analytics and modeling is also about end users, aka, customers. After all, the products have to reach them on time, offer good quality, and create an enriching experience. Business intelligence can use supply chain and customer data to find ways to improve customer satisfaction with your enterprise. For example, the insights may show that customers want the products to reach them quickly. You can use the reports to identify where delays occur and find a solution to resolve the issue. Similarly, you can change your vendors and work with environment-friendly suppliers to create a more sustainable supply chain.
With business intelligence, you can increase the visibility and transparency of your supply chain. That’s because the analytics provide a real-time and holistic view of the supply chain and its various components. You can get an overview as well as in-depth insights about each stage. At every given point in time, employees can track where the product is and what the subsequent stages are. This information can also be shared with customers. Apart from actively addressing issues and increasing performance, manufacturers can use business intelligence in the supply chain to become a sustainable brand in the market and target more customers.
Can BI help reduce supply chain costs? Yes, absolutely! After all, cost efficiency is among the primary concerns of running a business. While quality, timely production, and shipping are important, every enterprise strives to balance expenditure with income and generate higher revenue. Profits are necessary for an establishment to survive competition and last in the long term. Business intelligence in the supply chain is also useful for identifying cost-cutting methods without compromising quality or efficiency. You can achieve your goals and increase productivity while optimizing resources and reducing unwanted expenses.
Business intelligence in the supply chain can enhance overall efficiency and make every step more seamless and productive. By combining BI with artificial intelligence tools, you can automate recurring activities and save time.
Using the insights provided by business intelligence reports, you can identify unwanted steps in the product cycle and eliminate them to optimize the process. This reduces production time and consumption of resources without compromising quality. Moreover, you can also find the right vendor to source the raw materials for a cheaper price. Another way to optimize the product cycle using BI is to change/ redesign the products to enhance their features. This can be done based on customer insights and competitors’ offerings.
Demand planning or demand forecasting is the process of analyzing historical data to determine the future demand for a product. With big data analytics in the supply chain, you can get an estimate of how much the demand would increase or decrease for a specific duration. For example, some products have high sales during certain seasons. Enterprises can be ready for such demands and increase production to stock up the inventory and move the products to distributors and retailers at the right time. This reduces the risk of running out of stock or being left with excess unsold products.
Inventory and warehouse management are crucial parts of the supply chain. The finished products are stored in the warehouse until they can be shipped to distributors, retailers, sellers, and customers. From maintaining the warehouse’s temperature to ensuring its security and storage, you can track everything using powerful warehousing software. The data from this software can be analyzed to adjust the flow of inventory from the factory to the warehouse and warehouse to others. Maintaining the right amount of stock can reduce storage costs. It also minimizes losses for perishables.
Supply chain modeling and analysis also help streamline the transportation of goods by making quick decisions about when and how to send the products from the warehouse. Business intelligence tools can analyze data about the available fleet, their health, delivery times, routes, traffic conditions, diversions, etc. Using these insights, you can avoid routes with delays or choose another mode of transport if the weather conditions are not favorable. Additionally, you can start early to deliver the products as per the schedule and prevent extra costs.
Internet of Things (IoT) devices are connected to machinery to collect data about performance. This information is sent to business intelligence tools and analyzed to schedule preventive maintenance during non-working hours. It also helps detect minor complications in the machines and rectify them before they can result in full-fledged breakdowns. With IoT and BI analytics, enterprises can take better care of their production equipment and increase their OEE (overall equipment efficiency) scores.
The manufacturing industry has its own set of risks. Enterprises can try to reduce the uncertainties and risks by being agile, flexible, and scalable. For this, you should first know where things stand and what lies ahead. With Power BI services, you can derive business intelligence insights about customers, markets, competitors, etc., and make quick decisions whenever necessary. Handling supply chain disruptions will become easier when you are prepared and have other options ready. Be it a shortage of materials, transportation restrictions, or natural calamities, you can handle them by minimizing losses.
There’s no denying the benefits of using business intelligence in the supply chain. However, adopting new technology and models comes with its share of challenges. That’s why most manufacturers rely on supply chain data analytics companies to integrate customized BI processes and dashboards with their existing systems. By handing over the implementation and maintenance services to an expert, you can focus on the core functionalities of your business.
The accuracy of analytics and insights depends on the quality of data in your repository. Directly using raw data for analytics can give incorrect insights, which could lead to wrong decisions. Ensure business data is cleaned, formatted, and processed before it is used for analytics.
Setting up the business intelligence platform and the required connections is possible when you have a robust IT infrastructure. This can be on-premises or on cloud platforms. Moreover, the latest tools may not be compatible with legacy systems, in which case you have to first revamp your systems (software and hardware).
Employees are an integral part of your business. When adopting new processes and technologies, you should ensure your employees are aware of the developments and have access to the required training/materials to use the new systems. Maintain open communication and consider their concerns to make the transition smooth.
In today’s technological world, businesses should have access to the right technology and tools to achieve their goals. Fortunately, you don’t have to buy every software available in the market. However, it is necessary to know which tools are useful and how to use them in your business without spending too much money. SaaS, PaaS, and IaaS solutions are cost-effective.
How will you bridge the talent gap in the enterprise to implement business intelligence in the supply chain? While you can hire employees on the permanent payroll, you can also partner with service providers to use their teams temporarily and pay for the services. This is a cost-effective solution.
Business intelligence relies heavily on data. When you store large datasets and use them, you should adhere to the data security and privacy standards determined by the authorities. Add AI-powered security layers to prevent unauthorized access to confidential data.
Typically, the tools used for supply chain analytics in manufacturing can be classified into three major types.
Reporting tools are used by decision-makers to stay updated about day-to-day happenings in the supply chain. These help highlight weak areas and other concerns that should be immediately addressed to increase supply chain efficiency.
Power BI companies design customized dashboards to provide data visualizations and real-time pictures of how things stand. The dashboards are used to track various metrics or KPIs using tables, charts, graphs, etc. The dashboards provide complex information in an easy-to-understand format.
Benchmarking tools are used in business intelligence to compare the enterprise’s performance with the industry’s best practices and standards. With BI-driven benchmarking, you can enhance your internal quality standards, eliminate performance gaps, and increase efficiency.
Business intelligence in the supply chain enables manufacturers to streamline various activities, processes, systems, and standards. It increases supply chain visibility, eliminates the risk of disruptions, and makes the business more sustainable. By implementing Power BI in supply chain analytics, you can enhance customer satisfaction and increase revenue while also improving the quality levels in your enterprise. Partner with supply chain analytics companies to achieve the desired results and gain a competitive edge in the global markets.
Business intelligence helps use data and analytics to make strategic decisions about the business and gain a competitive edge over others. By hiring reputed BI companies, enterprises can be assured of end-to-end services to build, implement, integrate, and maintain the big data architecture and derive actionable insights in real-time. Make proactive decisions to boost your revenue and enhance customer experience with business intelligence reports.
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Fact checked by –
Akansha Rani ~ Content Creator & Copy Writer