Predictive Analytics And The Future

The economic recession has changed how many supply chains operate. In an effort to save money, businesses around the world are globalizing, forging partners with new manufacturers and suppliers to facilitate this goal. As a result, global supply chains are growing more complex and difficult to manage. The quickening pace of business and fluctuating consumer demand for commodities only makes supply chain management and procurement more challenging.

So how does a supply chain manage these new found obstacles without jeopardizing profitability?

One such strategy is leveraging predictive analytics, which gives managers access to data and information that is both up-to-date and accurate. This turns even the biggest and most complex procurement networks into something a bit more manageable.

This information, often referred to as "big data," has seen more use as companies look to accomplish various business goals with fewer resources. Major companies, ranging from Google to Facebook, are making use of dynamic and predictive information to improve their businesses, and now supply chain professionals are similarly turning to big data as well.

"Digital data is now everywhere - in every sector, in every economy, in every organization and user of digital technology," a 2011 report from the McKinsey Global Institute notes, before predicting that it will facilitate "a tremendous wave of innovation, productivity and growth, as well as new modes of competition and value capture - all driven by big data as consumers, companies and economic sectors exploit its potential."

The importance of dynamic information to suppliers

For supply chains, big data is all about improved visibility throughout the network of various partners. Simply having access to data and information isn't enough - global supply chain professionals need actionable insight from this information as well. This enables them to make split-second decisions based on the performance of their various vendors.

In that regard, predictive analytics can be a big help, and for many supply chains, this will be the future of how they do business. Predictive analytics help professionals convert simple data into actionable insight that can help them bolster the productivity and end results of their supply chains. It can also be used to monitor and track outliers, quickly identify key issues and recognize potential opportunities.

Predictive analytics should be used in conjunction with present and historical data to prevent regression and losses and instead foster gains and benefits.

-By Syamala Srinivasan, Associate Partner