The Ever-Growing Importance of Data in Supply Chains

One of the most important inventory goals any business can set for itself is to plan for inventory and demand. The point is to get the right amount of stock into customers’ hands at the lowest cost possible. And a big part of that cost can be the expense of holding stock when it doesn’t sell. But how do you know what the right amount of stock is without placing knowing the importance of data?

Leaders Emphasize Importance of Data

Every business generates data. But the question is how do you store and organize that information to make it work in a function like inventory and demand planning? Generally speaking, people refer to the technology around the storing and making sense of accumulated information as big data analytics.

And eCommerce and manufacturing show us how all kind of businesses are beginning to see the importance of data. According to the technology research firm IDC, manufacturers will take the lead in big data analytics investment.

IDC expects global spending on storing and analyzing huge amounts of data to reach $150.8 billion worldwide, up 12% from 2016. And only four industries–manufacturing, banking, government, and professional services, will account for $72.4 billion or nearly half of that spend.

To IDC, this is a sign that big data analytics will move from limited applications into wider use.

“Big data and business analytics solutions have finally hit the mainstream,” an IDC vice president told B2B E-Commerce World.  “BDA as an enabler of decision support and decision automation is now firmly on the radar of top executives. This category of solutions is also one of the key pillars of enabling digital transformation efforts across industries and business processes globally.”

Make Better Use of What You Have

It’s easy to understand why manufacturers lead the charge in big data analytics. To the extreme, complex manufacturing needs IT systems to maintain an efficient supply chain.

Now think about the importance of data to your business. You may not be a complex manufacturer. But as you know, you generate a lot of information, from customer contacts to purchase and sales orders to bills of material. The better you can organize and store that data, especially sales activity over time, they more easily you can use that data to do inventory and demand planning.

Many smaller businesses continue using spreadsheets or paper documents at the beginning. This certainly generates data. But, the more your data is kept in silos or in the analog world, the less use it is to you for planning in the future.

On the other hand, using technology the culminates important data over time and presents it in a variety of easy-to-access reports, makes that same data far more effective for inventory and demand planning.