How Business Intelligence play important role in Supply Chain Collaboration?

Supply chain managers are now utilizing BI capabilities such as analytics, reporting and dashboards to monitor supply chain performance, as well as to gain new insights into all aspects of their businesses. BI is allowing them to drive performance improvement in individual functions, in business processes that span multiple functions, and in the “extended supply chain” through collaboration with customers, vendors and other trading partners. And these BI tools are delivering significant benefits in terms of cost reduction, customer service improvements and lower inventory levels.

BI e.g.

The Perfect Order, and have provided customers, vendors and third party logistics service providers with visibility into the status of orders, inventory, returns, delivery performance and other key operational parameters. 

The Vendor Scorecard is a very effective tool to both monitor and manage suppliers. Typically a company will define five to nine metrics that it considers to be key requirements to measure its suppliers as well as its own financial performance. These can include metrics such as:  

• Percentage of orders received on time.
• Item fill rate (the percentage of items received versus ordered).
• A quality metric such as the percentage of items damaged or out of compliance with specifications.
• Order fulfillment lead time versus standard lead time.
• The days of supply of inventory for a supplier.
• Carrier compliance or a measure of transportation charges versus standard costs.
• Invoice accuracy versus target.
• Sales of supplier products versus sales plan. 

 

 

I think it helps in many ways like customer service metrics such as the perfect order. The perfect order received wide acclaim when it was created over two decades ago as a single metric for measuring multiple dimensions of customer service performance. I am proud to have been one of the initiators of this tool. There are many versions of it, but it generally measures the percentage of orders that meet multiple criteria such as orders shipped complete and delivered on time, with no damages and with fully accurate delivery and invoicing documents. When this was first applied by food retailers, less than 10 percent of orders met the above criteria for a perfect order. Moreover, it was very difficult for any company to use this metric because the data was so difficult to collect.

Even it used in extended supply chain applications such as the sharing of operational metrics across the supply chain. This has included a view of the full channel inventory; the status of orders and/or deliveries, a view of cycle times for cross-company processes such as order to receipt; capturing the reasons for a stock out; preempting a stock out by monitoring inventory and order status, and suggesting actions in exception reports; the analysis of the total cost to serve; and analyses of product, customer or channel profitability. Business Intelligence solutions are often most insightful and valuable when data needs to be assembled from multiple source information systems—either from distinct transaction systems within a company (such as orders, sales and selected cost items from an ERP system), combined with budgets or plans kept in an Excel spreadsheet, along with customer information from a CRM system, and/or other information from the source information systems for customers and partners across the channel. And therefore, BI solutions particularly add value for cross channel applications.