How Supply Chain Insights Shape Smarter Business Decisions

How Supply Chain Insights Shape Smarter Business Decisions

Poor supply chain management can literally cost businesses millions of dollars per year. Products become delayed, sales revenue falls, and this doesn’t even take into consideration the often more significant cost of lost consumer confidence.

Supply chain management has always been important, but in an increasingly complicated global marketplace, the value has never been clearer.

We live in an age of tariffs, closures, warehouse shutdowns, and distant political strife that can influence business outcomes thousands of miles away.

Supply chain insights are actionable intelligence. They can be developed through analytics. Businesses today have access to an incredible amount of information. Using it to optimise shipping routes, inventory control, and demand forecasts is a smart way to improve operations.

Often, it is in this logistical category that businesses experience the difference between surviving and thriving. In this article, we take a look at how supply chain insights shape smarter business decisions.

Real-Time Analysis Prevents Disruption

When businesses blindly trust their supply chain management process, the best they can hope for is inefficiency. The worst they can expect is total ruin. If that sounds dramatic, do not forget that supply chain disruptions can cause hundreds of millions of dollars in lost revenue every year.

It is a very real problem, and one that often happens abruptly. Real-time visibility is the by-product of tracking systems. Supply chain managers now have access to tools that enable them to see, at any given moment, the exact state of their components from sourcing through manufacturing.

The more visibility a brand has in its supply chain management, the better prepared they are to handle problems as they arise. And they will arise. Worker strikes, natural disasters, bankruptcy, and new trade taxes that shatter profit margins are all challenges that almost inevitably occur in the life cycle of an international business.

It is how you rise to the occasion that makes the difference.

The Role of Predictive Analytics

Predictive analytics, at the most basic level, is a matter of pattern recognition. Through analytics, a supply chain manager—or anyone handling the logistics of a business—can assign accurate expectations to events that have not yet occurred.

More than a gut feeling, these numbers may fall slightly short of predicting the future, but they provide businesses with a level of confidence otherwise unattainable.

In the context of supply chain management, predictive analytics helps managers understand how much resources to allocate to a specific material or product. It also guides decisions on how to better optimise delivery routes for efficiency.

It is all about removing as much guesswork from business as humanly possible.

Risk Management

Conceptually, when we discuss supply chain management, we are describing a process rooted in logistics and coordination.

At the most basic level, a person with an educational or professional background in supply chain management is greasing the wheels of business—looking at a process and refining it to simplify the steps, optimise execution, and remove as much friction as possible.

What we are really talking about, however, is risk management. Supply chain pitfalls exist everywhere, and most businesses experience them to at least a limited extent at certain points throughout the year. Sometimes, they experience them in a major way.

Often, this is the result of single-source vulnerability. In other words, there is only one provider able to supply something essential. If they fail, a business is left to pick up the pieces.

In 2022, for example, there was a significant baby formula shortage caused by supply chain management issues and a factory closure. Not only were consumers affected, but brands were left scrambling with no options.

These kinds of disruptions can ruin a brand’s credibility and cost millions of dollars.

Supply Chain Management as a Mandatory Element of Modern Commerce

We live in an era of consumers conditioned by what many analysts describe as the Amazon effect. Amazon has established a level of service that many modern consumers now view as mandatory. This includes fast, free shipping, easy returns, real-time package tracking, and more.

This baseline is rooted, at least mostly, in very strong supply chain management. The vast majority of businesses on the planet do not have even a fraction of Amazon’s resources, yet they are still held to these standards by a consumer base that expects nothing short of frictionless convenience.

Part of good supply chain management from an administrative perspective is looking not just at how components turn into products that wind up on shelves, but also at how consumers experience the process. What percentage of orders arrive perfect—nothing missing, on time, and undamaged? A best-in-class provider will strive for as close to one hundred percent as possible.

Supply chain excellence is iterative. Brands improve through analytic insights and process refinement. Modern supply chain managers do not necessarily need to turn a mid-sized e-commerce brand into a platform that rivals Amazon, but they must understand what their consumers expect and be able to satisfy those desires as closely as possible.

A Multifaceted Consideration

Supply chain management is multifaceted. It is important to understand that supply chain management does not come down to one person.

Rather, it is a cross-departmental effort, receiving contributions from sales, marketing, accounting, and, of course, the C-suite.

Adaptability is the ultimate key to long-term success. Over-reliance on a single route, a single region, or a single supplier is what gets brands into trouble. The more agile and adaptable a company is, the better prepared it will be to successfully navigate whatever challenges arise.