The Third Component - Supply Chain Analytics

"Taking action without thinking is the cause of every failure." - Peter Drucker

Supply chain analytics is the third component to blend in to enable good decision making for executives, alongside supply chain metrics and financial performance KPI’s.  Here is the model including these three components in a traditional Venn diagram.

Gartner defines supply chain analytics as "a set of techniques and technologies that incorporate advanced modeling with data management to uncover existing relationships among variables to determine the probability of a future outcome that can drive a business decision."

We’ll explore analytics in more detail in coming entries.  Ultimately the goal is to translate data into usable information that can drive better decisions.  Executives need this information to make real-time decisions based on what is seen through the windshield (foresight) rather than what is seen in the rear-view mirror (hindsight). 

Data is not hard to find.  In fact, there may be too much.  According to a Gartner 2012 study of 188 executives from supply chain companies, 66 percent of CEOs say that information overload has reached crisis proportions.  How does one sift out the usable data from the massive amount of data available?     

The answers for improved financial performance and customer service are found in the intersection of financial models, supply chain metrics, and analytics.  The first step is to drive the right link between supply chain metrics and financial performance—no small task in and of itself.  With that link defined a connection between supply chain metrics and advanced analytics— predictive and prescriptive—enable executives to take control of the steering wheel of the organization like never before and drive it in the desired direction.   It will enable executives the take action with intentional thinking.