The logistics and supply chain management (SCM) field is the most dynamic and living part of an organization. Coined by Keith Oliver of Booz, Allen and Hamilton, the original term was introduced in 1982, this has been evident over the last 60 years. The field has advanced from physical distribution, as it was defined in the early 1960s, to what is now generally considered a function that encompasses the entire organization, Where the focus was on striving towards ‘strategies for reducing cost and improving service’, the emphasis has shifted to ensuring a strategic, reliable and predictable service.
The field of Supply Chain has now been bolstered by the advent of Big Data and Analytics as is evident from its share of the Analytics market. Although the terms Logistics and Supply Management are often used interchangeably, but the difference between these two is that Logistics is used to refer to a set of activities happening within an organization whereas Supply Chain is used to denote a collective effort of companies that are trying to deliver a product to the market.
Currently Business Analytics is a $25BN global market.
The methodologies used in the field of Business Analytics are meant to draw inferences and patterns to steer business planning in the right direction. This is extremely helpful in enhancing the overall quality of the decision-making process. If we talk about Customer Analytics, CRM and Social Media Analytics contributes around 40%, Operations & SCM contributes 40%, Finance & Stock contributes 15% and People & HR contributes 5%. Though it has 40% of the total share, in terms of day-to-day usage and value to business, it contributes more than 60% of the entire analytics employed by Companies.
Hence, the leading companies such as SAP, Oracle, MicroSoft, GE, Google etc. have demonstrated a keen interest in coming out with newer and better solutions in the space of Supply Chain Analytics. In fact, SAP has made several acquisitions in recent times to augment its SCM capabilities with the add-on of Big Data and Analytics tools and applications.
The Business Backbone
Supply Chain becomes the all-encompassing entity which touches and influences all elements and pillars of a Company.
Strategy drives Execution and Execution feeds back into Strategy to course correctly. The three pillars of company – People, Process and Technology – are employed for the Strategy and Execution.
Four entities further detail the Strategy-Execution Cycle – Finance, Operations & HR, Marketing & Sales and MIS. All with a purpose to deliver products and service to the Customers.
The below figure demonstrates why understanding of Supply Chain is imperative to business execution and thereby the success of every business.
If Strategy, say, is to Launch the new Tesla car in India then right from the decision to Import it or Make it or to Delivering it to the customer, everything gets determined at the Execution level by the Supply Chain in India. Hence, we can say that right from Procurement to Production to Packaging to Logistics and final Delivery every element of the Business Strategy gets reflected in these entities of Supply Chain (SC).
One another important thing is the MIS mentioned above, which is where the data gets collated and analyzed to present Descriptive reports and dashboards. The data or information for such analysis stems from the Executional systems. Even whether the right talent and skill sets are required or are available can be determined by the SC functioning and Metrics.
Most of the MIS is Lagging information, but the happening on the ground gives immediate clue on what is going right and what could go wrong. This is the Leading information, which helps in Predicting possible issues and mitigating them with Prescriptive measures. Supply Chain Analytics plays the most important role in establishing this baseline for Predictive and Prescriptive Analytics.
Is Supply Chain only limited to Manufacturing?
Most often Supply Chain gets fixated as a Manufacturing domain related process. But this is nothing but farther from the truth.
Supply Chain is universally existing and applicable. Right from your Home to the Grocery store you buy your monthly essentials to the Hospital where you undergo treatment, to the Schools where you send your kids for learning.
The manufacturing part of any process can be described as a crucial activity that employs a wide range of capabilities to add value to the material to increase the scope its usage. Supply Chain Analytics is applicable across all Industries and domains. One just needs to identify what are the various entities and how they interact along the Value Chain (called so, as it adds value at each step of the entire chain).For example if one looks at a Hospital SC then the patients become the Input to the SC. Patients undergo various services across the various entities of the Hospital like Diagnosis, Tests, Surgery, Physiotherapy etc. Finally, they come out treated with better health. With the advancement in the complex nature of manufacturing operations, many companies are opting for a structural supply chain arrangement which leads to a systematic distribution of goods.
To develop the most industry-relevant skills to be successful in the field of business analytics or data analytics, pioneering institutes and universities are offering highly comprehensive courses with special insights in the logistics and international trade scenario. One of these top-ranked institutes is REVA Academy for Corporate Excellence which offers PGDM/MBA in Business Analytics. While the PGDM course is one -year long, the MBA course is of two years. The programs enable participants to understand the role of Business Analysts in strategic decision making as well as allow them to develop hands-on skills on Descriptive, Predictive, Prescriptive and Cognitive Analytics