Supply chain optimization can be achieved with data
Supply chain optimization means lowering costs and improving the performance of the production cycle with software and know-how. Data analytics is one tool that has proven very successful for manufacturers and wholesalers to drive more responsive supply chain activities and optimize sourcing, warehousing, supplier performance and selling.
Running an efficient supply chain will maximize financial value to your customers and ensure you achieve a sustainable market advantage over your competition.
Analyzing the performance of your suppliers is the first step to improving supply chain performance. Measuring supplier performance will reveal which suppliers are meeting the expectations, which have gaps in performance, and which are falling short. The most important metric for measuring supplier performance is the ‘delivery in full, on time’ (DIFOT). This metric depicts the supplier’s time to deliver, ordering lead times, rate of delivery of damaged goods, variances in pricing, and performance over any period of and in specific markets. Additionally, DIFOT reveals details such as which suppliers are always late with their deliveries, and which suppliers are getting your order to you on time but not the quantity you ordered.
Analytics can also help a company maximize their rebate receivables from suppliers. With rebates analytics you can see what rebates you are owed along with their value in real-time. This enables you to make more strategic purchasing decisions that maximize your rebates without spending too much. Armed with this information you can reinforce relationships with your best suppliers, re-negotiate contracts, or redirect your business to another supplier altogether.
Analyzing current stock levels enables you to run a leaner warehouse. A lean warehouse is one that maintains appropriate stock levels so you always have enough on hand to meet customer orders, yet not so much that your capital is tied up in stock just sitting on your shelves.
Overstocking your warehouse is risky because if the stock is not sold it can turn your warehouse shelves into a dead stock graveyard. This valuable warehouse space could be used for income-generating products instead. In addition, dead stock is a wasted capital investment that could be directed toward other opportunities for business growth. Comparing supplier lead times to metrics such as ‘stock on hand’ and how much of the product you have sold over time - ‘stock in months’ - you are able to quickly determine whether you have enough stock to fulfill orders without the risk of carrying overstock.
It is vitally important that the sales revenue metric is tracked and understood. A dashboard can be created to compare sales to a target or budget, by sales rep or product group, or to sales revenue year on year. With analytics you can also monitor how much your customers have purchased over time to identify their spending patterns.
The ‘delivery in full, on time’ (DIFOT) is fundamental to analyzing your own supply chain’s performance. It is essential to be sure your company is providing your customers the products they need, when they need them, in the quantity they ordered. The DIFOT metric measures how successful your supply chain is at fulfilling this objective.
The power of self-service data analytics
Self-serve analytics is intuitive software designed for users with minimal technical experience. Solutions such as Phocas enable companies increase their overall efficiency. With customizable dashboards and the ability to generate reports, you can monitor your supply chain in real-time. Phocas offers individual users access to data that can be queried to follow their train of thought and get the answers needed to make immediate decisions. With the ability to integrate data from almost any source, including ERPs, CRMs and more, you have a winning combination of up-to-date, accurate data and the ability to use that data to strategically source products, run a lean warehouse, and optimize your own supply chain processes.
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