Big data has gained importance in the field of supply chain management during the past several years. Organizations need more time to efficiently manage and analyze the data to get insights that can be used to optimize supply chain operations as more and more data is generated from diverse sources. According to a report by Research and Markets, the global supply chain management market size was valued at $15.85 billion in 2019 and is projected to reach $37.41 billion by 2027, growing at a CAGR of 11.2% from 2020 to 2027.
Leading companies like Walmart, Amazon, and UPS have all been able to gain from big data analytics. For example, Walmart was able to reduce the time it takes to get products from its suppliers to its stores by 10% by using big data. Amazon was able to reduce its out-of-stock rate by 20% by using big data. And UPS was able to reduce the average delivery time for its packages by 5% by using big data.
These are just a few examples of the many ways that big data analytics can be used to improve the efficiency and effectiveness of supply chains. As big data analytics continues to evolve, we can expect to see even more innovative and effective ways to use this technology to improve the supply chain.
We will examine the function of big data in supply chain management and how it can be applied to raise the effectiveness of supply chain operations in this blog.
What is Big Data?
The phrase “big data” refers to extraordinarily colossal data volumes that are too complex to be handled and evaluated with conventional data processing techniques. The origins of these data sets might range from social media to internet search history to machine-generated data, among others. To handle and process the massive amount of data created by these sources, new tools and technologies are needed.
Big data analytics is the process of using advanced statistical and machine learning techniques to extract insights from large and complex datasets. This information can be used to improve decision-making, optimize operations, and identify new opportunities.
What is big supply chain analytics?
Supply chain analytics is the process of using data analysis tools and techniques to gain insights into the sourcing, processing, and distribution of goods in a supply chain. Big supply chain analytics, specifically, involves the use of big data methodologies to analyze a wider array of complex, multi-source supply chain data.
Big supply chain analytics use data and quantitative techniques to enhance decision-making for all supply chain activities. It performs two novel things in particular. First, it broadens the dataset for analysis beyond the conventional internal data stored on supply chain management (SCM) and enterprise resource planning (ERP) systems.
Second, it uses robust statistical techniques to analyze both fresh and old data sources. This generates fresh information that helps decision-makers in the supply chain make better decisions, from enhancing front-line operations to making strategic decisions like choosing the best supply chain operating models.
In Detail, what is Supply chain analytics?
Big Data in Supply Chain Management
Supply chain management involves the coordination of activities involved in the production and delivery of goods and services from suppliers to customers. Big data has become increasingly important in supply chain management because it can help businesses gain insights into their supply chain operations that were previously impossible to obtain. By analyzing large data sets, businesses can gain a better understanding of their supply chain, which can be used to improve performance and optimize operations.
One area where big data has proven particularly useful is in the management of inventory. By analyzing data from various sources, businesses can gain insights into demand patterns, which can be used to optimize inventory levels. By ensuring that the right inventory is available at the right time, businesses can avoid stockouts and reduce the cost of carrying excess inventory.
Big data can also be used to optimize transportation and logistics. By analyzing data from various sources, businesses can gain insights into traffic patterns, delivery times, and other factors that can impact the performance of their transportation and logistics operations. This information can be used to optimize routes, reduce delivery times, and improve the overall efficiency of transportation and logistics operations.
Challenges in Managing Big Data in Supply Chain Management
Managing big data in supply chain management can be challenging. One of the biggest challenges is the sheer volume of data generated through various sources. To effectively manage this data, businesses need to invest in new technologies and tools that are designed to process and analyze large data sets.
Another challenge is the quality of the data. Big data is often generated through various sources, which can result in inconsistent and unreliable data. To effectively use big data in supply chain management, businesses need to ensure that the data is accurate and reliable.
Finally, there is the challenge of data security. With the large volumes of data generated through various sources, there is a risk of data breaches and cyber-attacks. To effectively manage big data in supply chain management, businesses need to invest in cybersecurity measures that can protect their data from potential threats.
Big data has become increasingly important in the world of supply chain management. By analyzing large data sets, businesses can gain insights into their supply chain operations that were previously impossible to obtain. This information can be used to optimize operations, improve performance, and reduce costs. While managing big data in supply chain management can be challenging, businesses that invest in the right technologies, ensure data quality and prioritize data security can reap significant benefits from the use of big data in supply chain management. Here is additional information on how a data fabric can impact supply chain management.