Supply Chain Analytics Drive measurable Business Impact

DR DV Ramana

Wissen Infotech

Hyderabad

drdvramana@gmail.com

Supply Chain Analytics

When data available is rich in content and relevance, we leverage our expertise in statistical and advanced data-mining techniques

Segmentation,

Clustering and Factorisation

Predictive analytics and

Operations research to aid in smarter decision making.

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Analytics Techniques

Probable Solution methodology

Supply Chain Optimization

Supply chain optimization has become a key strategic planning tool for any organization.

The entire delivery mechanism from point of production to point of consumption needs to be optimized to ensure there is no wastage in the process.

The cut throat competition is e-commerce companies makes it imperative for them the least cost and timely delivery without affecting the quality

Important Areas of Supply Chain Analytics

Capacity Planning

• Finding the capacity of a supply chain or its elements

• Identifying and eliminating bottlenecks

• Typical employs iterative analysis of alternative plans

Demand Supply Matching

• Determine the intersection of demand and supply curves and optimize the inventory

• Minimise overstocks and stock outs

• Typical involves issues as arrival processes, waiting times and throughput losses

Important Areas of Supply Chain Analytics

Location Analysis

• Optimization of Locations for stores. Distribution centers, manufacturing plants etc.

• Increasingly uses geographic analysys and digital maps (ex. Relate company location to Customer location)

Modeling

• Create models to simulate, explore, contingencies, and optimize supply chains

Important Areas of Supply Chain Analytics

Routing

• Finding the best path for a delivery vehicle around

• Identifying and eliminating bottlenecks

• Typical employs iterative analysis of alternative plans

Scheduling

• Creating a detailed schedules for the flow of resources and work through a process.

• If scheduling models are FINITE, then they take the factory capacity limits into account when scheduling orders

Supply Chain Analytics –Optimized Business Process

• Retailers are able to optimize their stock based on predictive models generated from • Social media• Web search

• Weather forecast

• Supply chain helps a business track where products are and where they have come from

• Supply chains are rich places to look for competitive advantage, partly because of their complexity and partly because of the significant role they play in a company’s cost structure.

• With the power of new analytics, companies can now fine-tune their supply chains in a way that simply weren’t possible in the past.

• Supply chain mostly depends• Speed• Net work

• Accuracy

Why supply chain analytics?

Transform data into real-time, predictive insights

• Commodity volatility, changing demand forecasts, and supplier-specific challenges have affected nearly every organization—including those with the leading managed supply chains in the world.

• Even top supply chain performers have faced embarrassing stock-outs during periods of unanticipated demand in recent years.

• A big reason for this kind of underperformance is the fact that supply chain visibility and analytical models are typically grounded in hindsight.

• Making decisions based only on what happened in the past no longer provides competitive advantage.

Supply Chain Analytics – Volume, Velocity vs Variety

Results companies have achieved using big data analytics

How current tools and technology support companies’ use of Big data

Why supply chain analytics?

Transform data into real-time, predictive insights

• Commodity volatility, changing demand forecasts, and supplier-specific challenges have affected nearly every organization—including those with the leading managed supply chains in the world.

• Even top supply chain performers have faced embarrassing stock-outs during periods of unanticipated demand in recent years.

• A big reason for this kind of underperformance is the fact that supply chain visibility and analytical models are typically grounded in hindsight.

• Making decisions based only on what happened in the past no longer provides competitive advantage.

Benefits

Insights that make a difference

• Use historical enterprise data to feed predictive models that support more informed decisions

• Identify hidden inefficiencies to capture greater cost savings

• Use risk modelling to conduct “pre-mortems” around significant investments and decisions

• Link supply chain models to customer and pricing analytics to clarify the whole profitability picture, not just the parts and pieces

Supply Chain Analytics Key Deliverables

• Reduce inventory and release cash

• Optimize freight utilization by improving loading levels and routing, reducing cost to serve and improving service levels

• Eliminate wastages and improve margins

• Improve forecast accuracy

• Improve forecast accuracy

What next –Supply chain Analytics

• Supply chain improvements happen both from the bottom up and the top down.

A commitment to supply chain improvement is easy to make—but challenging to execute.

• When you consider near-term value delivered, tackling one specific problem after another is a good

way to make progress.

• But without the foundation of a strategic supply chain agenda—one driven by business goals—

those solutions may not add up to the performance improvements you are looking for.

Be sure to spend enough “top down” time to provide alignment across different investments.

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• KPIsINVENTORY OPTIMIZATIONWhat inventory buffers should I hold and where should I position?

Segmentation for tailored fulfillment strategies

• Safety Stock Recommendations

• Inventory Budget Optimization

• Inventory Costs

• Customer Service Levels

• REPLENISHMENT PLANNING ANALYTICSWhen, what and where should I ship?

Relenishment plans by DC, retailer DC, distributor

• Optimize for transportation and ensure feasibility to address handling, storage and warehouse constraints

• In-store Availability

• Customer Service Levels

• SUPPLY CHAIN METRICS MEASUREMENT AND REPORTING How is my supply chain performing and where should I improve?

Definitions of balanced KPIs & goals aligned to function areas & strategy

• SMART metrics: Specific, Measurable, Actionable, Relevant, Timely

• All Supply Chain KPIs

• DEMAND ANALYTICSWhat is my demand forecast and how is it tracking with retail sales?

Point of sale based forecasting at Retailer / DC / Store level

• Deviation analysis between Forecast vs. Actual sales, which stores, which SKUs

• Forecast integrated with promotion plans, competitor actions etc.

• In-store Availability

• Forecast Accuracy

• Lost Sales

• NETWORK PLANNING & OPTIMIZATIONDo I have the right network and the optimal network flows?

Number and locations of manufacturing facilities, warehouses etc.

• Optimized flow paths to fulfill customer demand at lowest total cost

• Variable Cost

• Fixed Cost