Having Accurate Predictions Is Crucial for Companies in the Supply Chain
The ability to accurately plan is invaluable for suppliers and distributors in this era of low profit margins and constant economic uncertainty. By rigorously tracking performance and using that data to make informed decisions about market trends and opportunities, supply chain partners can save money, work more effectively, and gain a competitive edge in the market.
Many participants in the supply chain are still not making optimal use of the abundant data-gathering and analysis tools at their disposal. Due to the industry’s slow adoption of digital tools, many suppliers and distributors still use time-consuming and inaccurate manual processes to set and monitor KPIs, process rebates, and plan for the future.
A supply chain’s data collection and analysis platforms should be designed with the chain’s history, future goals, and current processes in mind. Leaders will benefit from this process because they will have a clear picture of the organization’s successes and failures in the past, as well as a plan for setting realistic financial targets, a winning approach to rebates, and measurable indicators of progress.
Aware of Your Past Experiences
Historical supply chain data can be gathered from a variety of sources, including product demand, previous spending, customer satisfaction, lead and transit times, and seasonality. Increased visibility throughout the supply chain is crucial for collecting and analysing this information. McKinsey found that by the beginning of 2022, businesses that “implemented digital dashboards for end-to-end supply chain visibility” had a 50% better chance of avoiding disruptions than those that did not.
Data is essential in supply chain management because of the complexity of the many interconnected processes involved. That’s vitally important, but especially so in times of economic uncertainty. Without access to sales history, demand patterns across markets, and volume fluctuations from supply chain partners, it can be difficult to implement a rebate strategy.
Without accurate knowledge of the past, future planning is impossible. This is why it is so important for supply chain managers to prioritise data collection so that they can use it for forecasting, rebate negotiations, and other crucial tasks.
Plan Your Next Move
No amount of data is useful unless it is analysed to reveal insights that lead to actionable outcomes. When problems are seen from start to finish, not only can they be fixed quickly and cheaply, but data-driven decisions can be made that help shape and implement the company’s overall strategy. This information will aid in the development of specific objectives that take into account relevant opportunities and challenges. If your goal is either unachievable or too small to encourage creativity and hard work, it is meaningless.
Supply chain management will be profoundly affected by cutting-edge technologies like machine learning, especially in terms of making data-informed decisions. Most (78%) chief supply chain officers surveyed by Gartner expect machine-learning augmentation to be used for scenario planning and modelling, and another (74%) anticipate using it for market intelligence and forecasting. Ninety percent of supply chain executives say visibility technology is a top priority, and nearly seventy percent say the same about predictive analytics.
In addition, leaders in the supply chain require up-to-the-minute information to assess whether or not they will succeed in accomplishing their objectives. If distributors and suppliers have a crystal-clear picture of their end goals and the metrics they’ll be using to evaluate their progress, they’ll be much better able to respond quickly to shifts in the market.
Learn the Routes
Collaborative data collection and forecasting is essential for modern supply chains. When working together, partners should always be on the same page in terms of their objectives and metrics, and they should have access to a single digital hub that allows for full disclosure and easy collaboration. Relationships that have suffered as a result of disruptions in the global supply chain are more sustainable when suppliers and distributors negotiate and base decisions on a single source of truth, which reduces the likelihood of a dispute.
Knowing when and how much to expect from rebates is crucial because they serve as a safety net for distributors by providing additional cash injections based on their purchases and sales. Similarly, manufacturers use forecasts not only to keep tabs on production needs but also on their debts, so that they don’t run dry of cash when it’s most needed. Without the digital infrastructure to collect data, analyse it, share it with the appropriate parties, and turn it into actionable insights, suppliers and distributors will be unable to provide this information to their customers.
Data-driven forecasting is becoming increasingly important in the supply chain industry for purposes ranging from trend identification to the formulation of business goals and the implementation of a rebate strategy. Those businesses that put money into forecasting now will not only be better prepared to weather the economic storm that is expected in 2023. They will also strengthen their partnerships, reduce their exposure to risk, and open up new avenues for growth.