Supply chain management is a key element for the success and development of a company. However, it involves a multitude of time-consuming processes that mobilise many employees. Improving these processes and at the same time reducing costs is what supply chain optimization is all about.
The benefits of supply chain optimization
From stock and order management to risk management and delivery organisation, an optimised supply chain has many advantages for companies.
Lower inventory management costs
Controlling storage is one of the keys to optimising the supply chain. Indeed, the larger the stocks, the more human resources are required, but also a set of infrastructures and adapted tools.
This is why it is important to optimise the supply chain by ensuring that stock levels are as close as possible to the company’s actual needs. In this way, the organisation can increase its service rate while decreasing its stocked products, which translates into lower inventory management costs in the warehouse.
The introduction of cross-docking, which consists of shipping goods directly to the customer after receipt, also helps to reduce costs.
Better management of logistics flows
Good logistics management also makes it possible to reduce the budget devoted to transport. As a matter of fact, by better controlling its flows, the company is able to make substantial savings.
Delivery routes, for example, can be optimised to meet deadlines, but also to consistently deliver the right product, to the right person, to the right place. Furthermore, it is possible to compare different carriers in order to benefit from an attractive price-quality ratio on deliveries.
Optimising the transport of goods from the production sites to the warehouse, but also from the warehouse to the final customer (consumer or distributor) is an essential lever.
Reduced risk
As the number of players and flows has increased, supply chain management has undergone a profound transformation, becoming more and more complex over the years. In this context, risk prevention has become a key issue for companies in all sectors.
Optimising logistics flows is an excellent way of guarding against these risks at every stage of the supply chain. In this way, the company avoids any problems of stock shortages or saturation, as well as any incidents that could affect the smooth running of its supply chain.
Optimal tracking of deliveries
Optimising logistics management also allows the company to keep track of all its deliveries, using digital tools designed for this purpose.
As a result, the company gains better visibility of its supply chain, with reliable data available in real time. Customers benefit from accurate information about their orders and delivery times.
How can BI help you optimise your supply chain?
The benefits of a Business Intelligence solution for the supply chain are numerous. The use of a business intelligence tool is a must for optimising your supply chain management (SCM).
You benefit from reliable and centralised data
Throughout the various stages of the supply chain, a lot of data is collected by the company. It concerns both :
- The products: brand, life span, price, seasonality…
- Customers: preferences, loyalty…
- Suppliers: delivery times, discounts, purchasing conditions, etc.
- Movements: sales, stocks, orders…
- But also warehouses, shops or vehicle fleets.
Business Intelligence allows all this data to be centralised and constantly updated. Thanks to storage in the cloud or on site, they also benefit from a high level of security and confidentiality.
As a result, all employees have access to identical and up-to-date data. The company can therefore make the best decisions to improve the management of the supply chain, thanks to reliable information that is available at any time. In addition, it can rely on reliable and harmonised performance indicators.
You follow your KPIs in real time
To optimise the supply chain, it is essential to measure its efficiency using key indicators.
Perhaps the most important of these is the service rate, which is the ratio of orders delivered on time to the total number of orders in a given period. The higher this KPI is, the better the company’s supply chain is performing.
Nevertheless, there are other indicators that deserve to be monitored, for example
- The order picking rate
- The availability rate
- The breakage rate
- The occupancy rate
- Turnover rate
- The order completion rate
- Average cost per product
With a Business Intelligence solution for the supply chain, you can easily evaluate all your KPIs in real time. This insight allows you to take action to improve your company’s supply chain.
You anticipate problems before they arise
By exploiting Big Data, breakdowns, and anomalies in the supply chain can be identified much more quickly. Business Intelligence can even anticipate and correct problems before they occur, thanks to predictive maintenance.
Thus, the company is able to implement a more agile, flexible and responsive supply chain management. However, it must absolutely rely on a decision-making tool that combines business intelligence and activity reporting, in order to better manage its logistics flows and transmit data efficiently.
Data is a precious asset for the supply chain. Between data centralisation, KPI monitoring and predictive maintenance, it actively contributes to the optimization of the company’s supply chain. Therefore, the interest in integrating a BI solution dedicated to the supply chain.
