01 Jul Do You Sink or Swim in Your Supply Chain Data?
Last year IBM came out with the statistic we create 2.5 quintillion bytes of data daily. In the next few years this number will increase exponentially as companies continue to invest in the “Industrial Internet of Things” (IIoT). Such numbers demonstrate an incredible magnitude of information which can be swam through for organizations to make sense of – making business decisions. Whether drowning in spreadsheets or lost in data from IoT machine sensors setup in your factories, consider these (3) factors in making business sense from enormous amounts of data:
1. Shallow Dive Analytics. This aspect really says it – it is hard to sink when you are staying shallow. Sometimes it is ok to be shallow. If you are responsible for global product quality, do you really need to know the performance of every supplier? The principle of “less is more” needs to be taken into consideration. It is imperative that we focus supply chain executives and knowledge workers on the key set of metrics which provides high-level insight and directions on the areas which need a deeper dive. Deep dives don’t make sense without first skimming the surface to determine where to go deep.
2. Real Intelligence. Swimming, just like chasing down issues which impact supply chain performance, can be a very resource intensive task. Whether a VP Manufacturing or plant manager, you know there are too many issues at time to keep up with. What are the key performance indicators which truly affect performance? How can these KPIs be affected? If one metric improves, does it truly impact another one? Real intelligence is not simple “roll-up or roll down analytics.” Real intelligence is understanding which KPIs can be affected by change, and by how much those KPIs can be affected. Such KPIs are called Indirect KPIs – which correlate to other KPIs not directly, rolled up or rolled down. By providing correlating KPIs, organizations leverage real intelligence to connect the dots.
3. Real Time. The use of real-time business intelligence can have a strong impact on supply chain performance. However, taking a current analytics and metrics program and simply increasing velocity and frequency of updates can cause a drain on computational and organization resources. A redesign of a metrics program may be required to truly understand which metrics can benefit the organization and if the organization has capacity to manage to real-time metrics. How easy is this? Consider taking daily metrics to hourly (in terms of refreshing the metrics) if the information can be acted upon. A key element of a redesign is to reduce the metrics to a more of a shallow level, thus providing supply chain teams with the ability to accept, review and act on such metrics.
Like any business topic, making sense from such large amounts of information can include many more factors. However, the above three are the key issues we continue to hear from our clients in why they want an analytical solution to improve supply chain performance.