Companies are incorporating new functionality into their supply chain management strategies on a regular basis, placing greater emphasis on an adaptive and flexible work environment equipped with integrated technologies and communication channels. As businesses invest in mobile solutions, cloud computing and other integration solutions, the importance of supply chain visibility increases as well.
Supply chain managers must be able to oversee all activities taking place throughout the entire network of business partners and customers to gauge performance and determine what changes, upgrades or investments should be made to push forward into new markets or retain existing clients. Implementing supply chain management software can provide managers with the necessary visibility into operations and enable them to extract insights that can support more accurate business decisions. Here are a few critical features that enable greater operational oversight:
- Business process configuration to organize partner relationships
- Performance metrics analysis to measure operational efficiency and identify areas of weakness
- A comprehensive dashboard to offer customizable, real-time data reports for each supply chain process
- Personalized user alerts to notify decision makers, customers and managers of changes or advancements in transactions
- Integration capabilities that connect all internal departments and external partners to the same operating system and communication channel to boost collaboration and productivity
Analytics saves Tesco millions
One example of supply chain management visibility in action comes from U.K. retailer Tesco. The company shared its financial performance with the public and provided strong evidence for the value of supply chain management software. Tesco combated poor sales performance and lower-than-expected returns by using supply chain analytics to identify opportunities for operational improvement. As supply chain software provides increased visibility into operations, data can be analyzed and insights extracted to guide resource allocation decisions.
The company's supply chain management analytics capabilities broke down performance and sales data to identify how £100 million could be saved annually in adjustments to warehouse management practices, ComputerWeekly reported.
The management software not only pinpointed how internal operations could be more efficient, but analyzed external factors such as weather conditions, and how they impact productivity. Understanding weather patterns and adjusting logistics decisions allowed Tesco to save £6 million in a single year.
One of the interesting components of this analytics-driven strategy is the way Tesco exchanged information with its partners to ensure that the supply chain remained unified. For instance, the analytics data was fed into the retailer's live order management system so any adjustments were shared across all internal departments, as well as partners throughout the chain. The software solution offers algorithms to monitor market fluctuations to replace managerial judgment when deciding how the company can and should move forward based on financial and performance reports.
Furthermore, Tesco has shown a dedication to continuous improvement by optimizing its supply chain management software to enable computer simulations for testing new ideas. When a worker has a new strategy he or she would like to experiment with, the process can be entered into the program and enacted in a digital environment to mimic real-world implementation. Because supply chain management software offers in-depth insight into performance metrics, the same the simulation offers insight to determine the value of the new idea or any potential pitfalls that may arise when making the transition.