How business intelligence improves supply chain management

Food and nearly everything else that is bought and sold must travel from where it is produced to the buyer. Transportation costs are rising sharply. Oil prices have surged by approximately 45% and gas by 55% since late February, a direct consequence of the escalating conflict in the Middle East.

Distributors and their supply chain managers have been up against inflation and rising prices since the pandemic and and to cope with continuing shocks like the Middle East crisis most have had to change their supply chain processes to manage a more volatile marketplace. Business intelligence (BI) helps distributors understand risk exposure and make confident decisions when the range of possible futures runs from bad to considerably worse.

Implementing business intelligence (BI) can significantly enhance a company’s resilience by providing real-time data analytics across the entire supply chain. BI tools consolidate data from various sources like ERP, CRM, finance and the warehouse management system, allowing businesses to monitor key metrics and act. This consolidation of data enables quick identification of cost movements and emerging delays, allowing companies to respond. With BI, supply chain managers, sales and finance teams can anticipate issues before they become expensive.

Supply chain business intelligence helps manage supplier relationships

A business intelligence platform enhances supplier relationship management by providing a centralized platform to track and analyze supplier performance over time. By consolidating supply chain data from various sources, BI gives businesses one place to evaluate critical supplier metrics like DIFOT(delivery in full on time) and lead times, quality standards, pricing and profitability trends. With these insights, supply chain professionals can assess supplier reliability and identify areas for improvement or renegotiation. BI enables a more precise approach to supplier management, where data driven decisions are based on performance KPIs and mutual trust.

BI or supply chain analytics helps businesses identify trends and patterns that can improve collaboration with suppliers. By analyzing data by size of order, demand forecasts and delivery times, you can communicate more effectively with these stakeholders about future needs and potential risks.

Inventory and performance insights allows for proactive planning, enabling companies to work with suppliers to adjust lead times, negotiate better terms or model contingency plans. BI strengthens supplier relationships by ensuring both parties are aligned on key performance indicators and expectations.

When implementing Phocas business intelligence, we meet supply chain managers who are unaware of the location of their ‘true’ suppliers because the sourcing is done via a third party. The transparency and valuable insights of the purchasing transactions in a BI tool help distributors react faster. Tightly managing your direct and indirect suppliers with accurate data brings benefits and efficiencies - in good times and bad.

Supply chain business intelligence improves inventory management

As inventory management is a specialized function, it can be overlooked in business, yet, in reality, it involves the entire company. The inventory planner or warehouse staff might have a good system for inventory management but to deal with supply chain disruptions it is necessary for everyone to access this data because the flow of inventory affects sales, finance, customer service and operations in equal measure.

With consolidated data you can monitor inventory levels and gain a comprehensive view of all product movements. BI tools analyze historical data such as sales trends and seasonality, helping businesses forecast demand more accurately and reduce the risk of overstocking or stockouts.

As lead times lengthen due to rerouted shipping and port disruptions, having an accurate picture of what is on order, what is in transit, and what is available in the warehouse is essential to avoiding costly gaps. A business intelligence tool is useful to help you determine:

• Purchase orders and purchase receipts – to identify what’s arrived in the warehouse
• Brought-forward value – what stock is still available from the last period
• Identification of likely shortages - based on regular and irregular conditions
• Inter-company movement stock analysis - what departments get priority
• Sales orders, invoices, backorders and forward orders in any combination, sliced & diced to your requirements.

These data-driven insights will allow your team to devise a company-wide strategy for inventory management. A proactive approach helps reduce waste, improve cash flow and ensure that inventory aligns with customer needs. By integrating BI into inventory management processes, companies are better at maintaining the right stock levels, supporting better financial outcomes and customer satisfaction.

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Supply chain business intelligence helps you understand and manage customers

Truly understanding your customers is critical to running a wholesale distribution business and is one of the fundamental benefits of using business intelligence solutions. In regards to disruptions, it might be in your interest to ensure the highly profitable customers get priority.

A comparison between profitability and sales value will often reveal surprises. Customers with high sales volume are not always your most profitable relationships, particularly once cost-to-serve is factored in. As fuel and transport costs rise, the cost of serving individual customers increases in ways that may not have been priced into existing contracts. BI makes this visible, allowing you to identify where you are absorbing cost that should be recovered, and where adjustments to order minimums, delivery schedules or pricing tiers are warranted.

Use your data to understand which customers order standard versus customized product, which can tolerate adjusted lead times, and which generate returns, small orders or complex fulfilment requirements that erode margin. Can you ask for more time on delivery of customised products? Can you delay small orders that haven't met a minimum threshold?

You can also use your BI tool to develop customer response strategies by territory or industry. Some sectors and geographies are more insulated from the current Middle East shock than others. Finding where demand remains healthy allows you to direct resources and sales effort effectively, rather than applying the same approach across a customer base that is responding in very different ways to rising prices and supply uncertainty.

Supply chain business intelligence drives operational efficiency and confident decisions

Supply chain business intelligence drives efficiency by optimizing decision-making processes across the supply chain, helping companies maintain seamless workflows even during disruptions. By consolidating and analyzing supply chain data and viewing in BI dashboards, allows supply chain managers to pinpoint and address inefficiencies. Real-time data visualization provides actionable insights, enabling teams to make timely adjustments to keep operations running smoothly and aligned with demand fluctuations. This approach minimizes the risk of costly delays and other operational inefficiencies, which directly impacts productivity and cost-effectiveness.

In the current environment, the cost of inefficiency is higher than it has been in years. Every misaligned stock position, every poorly timed procurement decision and every missed renegotiation opportunity is more expensive to correct when diesel is at record levels and freight rates are elevated across the board. BI enables a proactive approach, using analytics to forecast challenges and streamline processes. You can anticipate supply and demand shifts so that resources can be allocated before a problem becomes visible on the P&L.

BI insights also highlight cost-saving opportunities in sourcing, transportation and inventory management. Where conflict-driven rerouting adds weeks to transit times and materially increases freight costs, BI data helps evaluate alternative sourcing geographies and logistics partner performance. These insights empower supply chain teams to make better decisions faster and to explain those decisions clearly to the wider business.

By integrating BI solutions with all your sales, operations and purchasing data companies are more adaptable to changing market conditions. In a market where the range of outcomes runs from significant disruption to something considerably worse, the businesses best positioned to navigate it are those that can review their entire operation clearly and act confidently. That is what business intelligence makes possible.