Spend Friends podcast discusses importance of data quality with Robert Handfield

Procurement needs to focus on and improve its supply chain data — specifically data quality, according to Robert Handfield, a distinguished professor of supply chain at North Carolina State University.

Handfield was the latest guest on the Spend Friends video podcast series. Spend Friends is a monthly talk hosted by Bill Michels, the VP of Operations — Americas at the Chartered Institute of Procurement and Supply (CIPS) USA, and Pierre Mitchell, Spend Matters’ Chief Research Officer. Its goal is to focus on all procurement matters under the sun, like spend management, supply chain and other topics.

Handfield joined Michels and Mitchell for the third episode to discuss supply chain data — what’s gone right and what’s gone wrong in the industry.

Data is, for many people, a jumble of numbers that can be hard to comb through. And even some procurement professionals who have a data-driven approach to their work have a hard time understanding what to do with data.

There are truckloads of data out there for procurement professionals to use.

The problem is not access to data, Handfield said, but rather, data quality. Since there’s so much data, it’s hard for analysts to determine what to use. Only the best organizations have found ways to deploy all that data to find strategic value within an organization.

“Generally speaking, we are seeing some progress on how data is being used,” Handfield said. “But it isn’t being leveraged as much as it could be for strategic decision-making. It tends to be fairly tactical.

“The other interesting thing is what we call data access. We found that 30% of companies have individuals that spend one to two hours a day just looking for the data they need to do an analysis. There’s a data analyst or someone you pay a lot of money to that spends most of their time trying to cleanse data as opposed to actually running operations or analytics on that data.”

This can waste time and money. Handfield said some of the biggest organizations are losing upward of $7 million by not understanding the best practices in data. He warned that this could potentially become an even bigger problem as more companies follow the trend of digitizing their data analysis.

One answer to the problem lies in artificial intelligence (AI). Handfield said AI and machine learning allow for predictive analytics that can be robust, reliable, timely and help to make targeted applications of the data. It takes a little bit of creativity to uncover the best option for your business, but it will be worth it.

“There are a lot of really good start-up companies out there with really innovative solutions, so give them a shot and see what they come up with,” Handfield said. “The other point I make is that as you get better at this, I think you’re going to start to see different types of procurement automation which will also address the data quality problem. As you start to automate more procurement activities, machine-based learning can replace a human, and you won’t make any mistakes with data.”

Spend Friends will return March 9 for more intriguing procurement discussions! Register here to attend the next live Zoom session. And listen to the third episode below.