Predicting the Unpredictable
If there’s one thing the last two years has made abundantly clear, it’s that the supply chain is anything but predictable. Delays, price increases, and stock shortages plague even the simplest of jobs. And yet . . . there’s a lesson here; we need to do a better job of leveraging what’s currently happening in our supply chain to predict what could happen to it in the future.
Now . . . no one could have predicted the pandemic. But after it got started – mid-to-late 2020 – we were already seeing the effects on the supply chain: delayed shipments, increased costs, and stock outages. Those early indicators warranted a new approach to reporting – a predictive one.
Let me explain; standard reports fall into one of three categories:
- Historic
- Current
- Scheduled
The problem is with the ‘scheduled’ category; although it tells you what should happen (& when), it fails to tell you what could happen. And that’s where Analytics Software is essential to any business that relies on the supply chain. Analytics predicts possible or probable future behavior and thus enables you to anticipate changes that affect how you do business.
Analytics does this by using KPIs from historic activities to predict future performance. For example, if your material costs have steadily risen over the past few months, Analytics shows this trend and predicts your increased costs over the coming months. This gives you the advanced warning you need to raise your prices and cover those unanticipated expenses.
Importantly, analytics solutions do not impose a “one size fits all” mentality when it comes to making predictions. Predictive formulas can be quickly and easily customized based on business-specific variables.
Analytics software also lets you add your own “what-if” factors to its predictions. This allows you to see the impact on your business if (for example) your cost were to double or your lead-time increase from 14 to 30 days.
So – the pandemic has given us at least one business lesson. You might not be able to prevent disruptions in your supply chain, but – with the help of analytics software, you can better anticipate such changes, prepare your business, and ride out the storm better than your competition.
To learn how predictive analytics could benefit your organization, please visit the DataSelf website at www.dataself.com (click on the “Video” option), or contact us today.