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Data + Collaborative Strategy = Supply Chain Success

by Dave Hannon

September 26, 2012

By Dave Hannon

@Daveatwispubs

While most business processes leverage data today, some are simply more data-driven while others will always require more human-driven strategy and competence to meet their goals. No other area of business represents the cross-over between data and operations than supply chain. Gaining visibility into supply chain data helps companies plan and execute the various steps in the supply chain process.

A recent survey by Data-driven supply chain imaginedIT market researcher Gartner highlighted the value of demand data in planning supply chain processes. And the first point that Gartner highlights is that organizations must define the balance between statistical modeling and collaborative forecasting. In other words, you have to understand how much emphasis to put on the data and how much to put on organizational collaboration in your forecasting.

That balance is different for each process and each company. Getting that balance right will increase the accountability of that forecast while also enabling continuous improvement across the organization, says Gartner.

"The company should be able to address what items should be statistically modeled, what items are reliant on a collaborative process, or both," says Gartner's Steven Steutermann, research vice president.

A recent insiderPROFILES story tells the story of a company that was relying too much on collaboration and not enough on data in creating its demand forecasts.

“Previously, forecasting inventory involved business units doing a high-level estimate of what they expected to sell, and then they met with finance to discuss it,” says Carole Edwards, Director of Production Control at NVIDIA. "We were using a very simple model to compare our build plans with actual demand."

NVIDIA leveraged SAP Advanced Planning and Optimization and SAP BusinessObjects solutions to provide company executives with demand and inventory planning data dashboards. The result has changed the supply chain process at NVIDIA as well as the company's perception of data.

“The executives trust the outcome and focus on the decisions needed, rather than questioning data," says Edwards. And that change can drive many business processes.

By the way, if you're particularly interested in SAP APO, you can read about Hallmark's implementation of that solution here.

And if you're interested in reading more about the role of data and collaboration in marketing and customer stratification, be sure to read the issue of insiderPROFILES that's coming out very soon (hint hint).

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