The power of analytics can help secure supply chains in times of crisis and avoid costly interruptions in production says Alan Jacobson, chief data and analytics officer at Alteryx
It is no secret that the “digital divide” has allowed some countries, and socio-economic groups, to get ahead of others. But is an “analytic divide” now emerging where companies with access to analytics and automation skills are leaving those who lack those capabilities behind?
Big data has become a key differentiator in the evermore complex world of supply chain management. As the coronavirus pandemic, the US-China trade war and Brexit have shown, supply chains are particularly vulnerable to disruption. Now more than ever, businesses need to anticipate changing customer needs, strengthen supplier networks and be on top of logistics to respond quickly in a crisis.
The challenge is turning the growing volumes of information and data available to them into actionable insights to optimise performance and control risk. For humans, with little more than spreadsheets to help, it is a huge job.
But with modern-day technology such as Alteryx, companies can quickly upskill and harness the power of analytics, and not just in their IT departments. Chief financial officers are increasing savings, human resources specialists are optimising their talent pipelines, and chief operating officers are responding to global shifts in supply and demand.
In fact, knowledge workers of any discipline can upskill and learn these new techniques with ease, with the benefits flowing quickly to an organisation’s bottom line.
Reshaping demand forecasting
Predicting customer needs and reacting to them is key in an uncertain business environment, but too many firms lack the foresight needed. It will no longer do to make operation-critical decisions on the basis of instinct and opinion alone.
The Alteryx Platform has a suite of analytical tools to mitigate risks of this kind of decision-making. By using population density information and current stock levels, companies are using Alteryx to predict which stores will have the highest demand at a given time.
Companies are also anticipating demand shortfalls or high-demand items by interpreting data from known situations to run extensive simulations across a wide range of risk management scenarios.
In times of crisis, firms need a complex, multi-tiered supplier structure in place to ensure they avoid costly stoppages
Take for example Coca-Cola and its Freestyle touchscreen soda fountains in restaurants across America. The machines feature 165 different Coca-Cola drink products, as well as custom flavours, which can be mixed and individually dispensed.
This requires a large number of ingredients to be dispatched to vendors at short notice and choosing the right volumes used to be tricky, often leading to waste.
Now Coca-Cola has fixed the problem with analytics. Using telemetry, the machines send data back to the firm about what is selling well and when. Coca-Cola then uses Alteryx to compare those findings against a host of other variables and creates predictive models that anticipate demand to balance inventory.
Activating new suppliers and optimising resources
Analytics offers firms a huge advantage, not just when tackling demand-side problems, but supply chain issues too. In times of crisis, firms need a complex, multi-tiered supplier structure in place to ensure they avoid costly stoppages. But faced with swathes of fast-moving and unstructured information, many fall back on old tools and techniques to inform their decision-making.
Using the analytic forecasting tools in Alteryx, firms can gain a crucial edge. They can diversify their supplier base, so they are not reliant on a limited cadre of potentially high-risk players. Procurement functions are also empowered to assess the risks of using alternative suppliers so they can quickly identify a pre-approved part or make material substitutions.
Firms must have the right resources at the right time to tackle demand and keep costs down, and here too Alteryx can help. Take the Japanese carmaker Toyota, which uses Alteryx to find correlations between the logistics of moving parts and staff working patterns and matches them to customer needs. This empowers Toyota to forecast labour for field service accurately and improve part fulfilment and delivery times, speeding up its quarterly budget process.
Using Alteryx, the firm has realised time-savings of nearly 500 hours a year during its budget process alone. In addition, it has been able to make faster and more cost-effective decisions and has realised 7.5 per cent in labour cost-savings by simply optimising its workforce.
Reshaping logistics and time to delivery
The process of moving goods around the world can be immensely complex. But without the power of data analytics, it is extremely difficult to a get a clear view of your global supply chain and offset unforeseen scenarios.
For example, as demand fluctuates, it’s crucial to be able to analyse and secure additional freight capacity quickly and at short notice. And so Alteryx can help planners and buyers understand carrier options and optimise trade routes, as well parse data from geospatial sources, including real-time satellite positioning, tracking and geofencing, to give an overview of goods in transit.
Understanding where 100,000 trucks are moving raw or processed materials across continents can help tackle potential bottlenecks or reduce costly downtime. It can also help firms with just-in-time supply chains to locate alternative stockpiles of parts or raw materials in times of need.
A global oil and gas company is using the Alteryx end-to-end analytics Platform to monitor operations and improve its supply chain decisions and inventory. Operations teams use predictive analytics capabilities in Alteryx to optimise the ordering, storage and utilisation of spare parts for the company’s onshore and offshore oil rigs.
The project has delivered millions of dollars in benefits and paid for itself in less than four weeks. The firm’s supply chain operations also used Alteryx to develop a suite of tools that provides critical information to increase forecast accuracy, optimise inventory and improve margin allocation.
For any business operating a supply chain, embracing the power of big data will be crucial in the years ahead. Without razor-sharp analytics, firms risk being left behind in an increasingly unpredictable business environment.
Using Alteryx, firms can help bridge the analytic divide and protect their supply chains, particularly in times of crisis. A smart approach to data now will guide the way to a successful future.
To find out more about how your supply chain could benefit from analytics, visit alteryx.com