Supply chain and procurement organizations are aware of the benefits data analytics can provide, but recent research has shown most companies lack a clear strategy on applying the data to make better business decisions. Often, organizations are bogged down in deciding exactly how and where to use supply chain data and how exactly it will provide value for the organization.
One tip comes from Josh Green, co-founder and CEO of Panjiva, a subscription-based service that provides freight and trade data on shipments moving across the globe. According to Green, organizations need to first identify the problem or business decision they want to focus on when tackling data analytics.
“Work backward with the data,” Green said.
Think about what decisions the supply chain or procurement organization already makes on a daily basis — things like determining what suppliers to source from or which ones to conduct a site visit with. Then, think about how, with more information, the organization could make that decision better or faster, Green said. With that in mind, the organization can focus its data collection on gathering specific information to guide that business decision.
Green pointed to a divide in the organizations that are conceptually buying into the notion that data can be beneficial and the organizations that have identified specifically how the data is going to create value.
“There are a ton of companies that check that first box,” he said. These organizations are onboard with the idea that data analytics can provide value, but haven’t quite decided on the specifics of applying it. Again, it’s about starting with a specific challenge and gathering data to solve that challenge in a smarter way, Green said.
Having a Hard Time with Stakeholder Buy-in? Revisit You Pitch
Getting all stakeholders to see exactly how data analytics can be applied to a supply chain or procurement organization is another challenge. It’s easy for a member of the supply chain or procurement organization to become discouraged if a senior person or stakeholder in the company doesn’t see why data analytics is necessary or how exactly it will provide value, Green said. It’s also easy to assume that that senior person just “doesn’t get it,” and walk away from all efforts to implement data analytics into the organization.
However, a better assumption, according to Green, would be for that supply chain or procurement professional to “revisit your pitch.” It’s likely you haven't yet articulated how exactly the data will solve a problem that senior person is tackling today. You have to be able to demonstrate how exactly the data provides value, and that means understanding what that stakeholder finds valuable.
In Green’s opinion, the number of companies truly maximizing the value of both internal and external data is small at the moment. But he expects that to change in the future. There are technology solutions available today that help companies make sense of the information inside their organizations as well as those that pull outside data — like the information Panjiva provides — to help businesses gain insight and make better decisions.
“The magic is, if you can make the most of both of them, internal and external, that’s the value,” Green said. “That’s what will happen in the future. That’s where I see it going over the long-term.”
For now, though, it’s just good to see organizations working with data in some way, becoming more “data oriented,” he said. Panjiva plans to continue invest in tools that make data analytics more intuitive for organizations, helping them work backward with data and apply the analysis to make better decisions.