Although a supply chain is often thought of a single unit or entity, “the supply chain,” it is really a network or a collection of different but interrelated services, vendors, suppliers, logistics providers and other entities that have to work together to be effective and efficient.
How a company determines if a supply chain is effective and efficient is not just about the cost factor, although that will play a part. In many cases, a company isn’t sure about the effectiveness or efficiency of a supply chain as it is not transparent, visible or even easy to understand.
To address this issue, supply chain intelligence programs are becoming an essential component for many companies. As supply chains become increasingly more complex, having a system that automatically collects necessary data, provides an analysis and makes recommendations is an important part of the decision making process.
Ideally, any supply chain intelligence program should be designed to allow the business to select their own KPI or key performance indicators. This will form the basis of the data collection to allow the analysis of the current supply chain system.
Unlike manual data recording and analysis, the use of software allows for greater accuracy and much larger data sets that provide the big picture in the format that is easiest for the team to work with.
Pointing Out Issues
With the best supply chain intelligence programs, the system will highlight areas where the data falls outside of the pre-selected parameters. This provides instant notification that there is an issue in the chain.
Not only does this allow the team to address those issues and make modifications to the supply chain for future improvement, but it can also help to eliminate supply chain costs through a better choice of vendors, suppliers and logistics services.