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Descriptive, Predictive, & Prescriptive Analytics in the Supply Chain…Oh My!

The rise of the digital supply chain has allowed Warehouse Managers, transportation providers, and suppliers to work together in new, profound ways. Part of this new level of collaboration revolves around the use of data in the supply chain. Today, supply chains generate enormous sums of data, and the data can be transformed into predictive insights, reports Deloitte. Also known as analytics in the supply chain, data can be applied to drive profitability, unlock cost-saving opportunities, and reduce inefficiencies. Furthermore, analytics can do much more than just tell what is happening, which is known as descriptive analytics. Warehouse Managers need to understand common concerns when using descriptive, predictive, and prescriptive analytics in the supply chain, how they operate, and what they mean for the omnichannel supply chain.

The Challenge: Analytics Look Difficult to Management

The days of using data scientists to carefully look through each byte of data are over,  . Modern enterprise resource planning (ERP) tools, as well as software-as-a-service platforms, take advantage of cloud technologies to insert analytics into everyday operations. Moreover, a huge amount of hype exists behind the analytics trend, and Bernard Marr of Forbes magazine notes, applying Big Data through prescriptive analytics in the supply chain allows for the structuring of data, the so-called cleansing of data, and improving operations, ranging from inventory management to in-warehouse activities. Unfortunately, the complicated process powering these insights is enough to send any Warehouse Manager running for the hills, but supply chain managers may realize that modern systems are much different.


The Solution: Analytics Are Automated and Run in the Background

Take a moment to think about the modern supply chain system. It uses cloud computing technology and leverages automation. The ability to automate systems and processes allows for the natural use of automated systems and automated analytics. As a result, analytics can run in the background, collecting data on everyday activities, identifying trends, recognizing how to avoid common problems, and much more. Since analytics function in the background, they pose minimal disruption risk while still enhancing operations. Analytics are comparable to a seamless way to dramatically improve operations without extreme costs.

The Reward: Applying Prescriptive Analytics in the Supply Chain Produces Major Benefits

Warehouse Managers need to know what type of analytics exist and what they mean for overall operations. As explained by Supply Chain Digest, analytics in the supply chain can be broken down into the following three categories:

  • Descriptive analytics, which leverage historical data to describe what is happening. This is similar to an information-gathering phase when seeing a healthcare provider. The initial check-up identifies symptoms, key concerns, and other actions that may have contributed to the current issue or opportunity.
  • Predictive analytics, which identifies what is likely to happen if current activities continue unchecked. For instance, a sick system that continues to “play outdoors in the rain” is more likely to suffer a major breakdown. As a result, Warehouse Managers can use this information to know when something is going wrong, but it can also be used to ensure current operations are working correctly.
  • Prescriptive analytics, which are comparable to the prescription given to correct an issue identified during a doctor’s visit. Prescriptive analytics tell Warehouse Managers what needs to happen to achieve a given outcome. For example, if the existing system is likely to suffer severe setbacks due to outdated data entry, prescriptive analytics can identify how a warehouse can improve productivity and avoid such setbacks.

Put the Power of Analytics in the Supply Chain to Work in Your Organization

Using descriptive, predictive, and prescriptive analytics in the supply chain can increase visibility, reduce overhead expenses, lower risks, and improve the supply chain, as well as the lives of personnel working within it, asserts Supply Chain Management Review. Warehouse Managers and supply chain leaders need to begin the process of implementing analytics in the supply chain.

Veridian can help you realize your supply chain success. Fill out the contact information below in order to schedule a consultation call with one of our supply chain professionals.