Supply chain analytics are the strategies used by organizations to obtain valuable information from procurement, processing, and the distribution of product records. Supply chain analytics has been in existence for more than 100 years and plays a critical role in a company’s supply chain management. The concept dates back in 1911 and is associated with Frederick Taylor. The mathematical models used in supply chain analytics have evolved to more statistical techniques, predictive modeling, and machine learning a while ago. Similarly, data infrastructure has improved to cloud technology and complex event processing. This paper will discuss the application of analytics to optimize the supply and demand chain of a company.
The application of analytics in the supply and demand chain of a company helps improve forecasting and ensures that it is more responsive to customer needs (Lawton, n.d). For instance, predictive analytics can be used by companies to forecast consumer demand. This, in turn, helps the procurement department of a company make an informed decision regarding the amount of inventory. Other benefits of forecasting include improved cashflow planning, informed decision-making, increased accuracy, and enhanced performance . Additionally, the application of analytics in the supply and demand chain helps enhance sales and operations planning. This is because the analytics help generates plans that a company’s operations and corporate strategy. Sales and operation planning is a critical element of business management as it enhances focus and alignment by the teams in a company.
Thirdly, the application of analytics helps improve order management in a company. It entails the management of people, processes, and partnerships. Additionally, it integrates all data sources to perform inventory assessment, predict demand, and identify demand gaps. The benefits associated with Order processing management include increased efficiency, less paperwork, and real-time stock control. It also helps organizations in receiving, tracking, and fulfilling customer orders. In other words, it helps an organization to understand more about the past order history of customers regarding factors such as whether they pay on time and whether the demand is going high.
Supply Chain Analytics
Besides, the use of analytics helps to streamline the procurement process. It does this by improving contract negotiations and identifying alternative sources of supplies. This means that through analytics, companies can purchase products at reduced prices and enjoy economies of scale by having a wide range of suppliers. Analytics also ensures that an organization has a smooth procurement process and that products are available when needed.
Moreover, it helps business organizations to understand what is likely to happen in the future. It does this by using statistical tools, programming knowledge, and simulation techniques to analyze past data. The mentioned tools also help companies discover various causes of events and can be useful in predicting the future accurately. This includes future consumer behavior, demand patterns, inventory requirements, and sales trends. Use APA