by: Douglas Ingram

Whether you are 3rd party logistics provider or managing your own in-house fleet of transportation assets, the need for comprehensive analytics has never been more crucial.  Today’s world of transportation, distribution and overall supply chain networks is a complex one  where the traditional lines between customer, partner, supplier, and competitor is sometimes hard to differentiate.  As these vital networks continue to elongate from a geographical standpoint and shrink from a time perspective, the need for comprehensive and more real-time analytics becomes even more important for companies wishing to realize cost savings, improve performance, and increase overall customer satisfaction.

There is an adage which states simply “anything that is measured will improve”.  It is a powerful concept and one that I have seen work in both personal and professional lives.  For example, imagine that you are wishing to shave some pounds and get in better overall fitness.  You decide that you need to take in 1600 calories per day.  You currently don’t keep track of your calorie count but decide that you will track every morsel of food and liquid that touches your mouth.  In your trusty notebook you begin to take detailed notes on everything and magically you realize you have a tendency to snack heavily in the evening and blow through your 1600 calorie goal.  Long example, point is this.  If you set a goal and don’t track your activities towards the goal, the goal itself is always elusive.

This old adage can be a powerful force in your supply chain practice and help your division, group or company achieve even better results than you do today.  In today’s world, most companies have some form of metrics tracking in place.  In the various positions I have held with numerous companies my general experience is that the tracking and measurement falls into 2 general categories:

1. Abundance of Data – Dearth of Analysis > In this world, the company or group of companies have massive amounts of data through connected databases, enterprise systems, etc.   The challenge is the proper assimilation of the data and drawing meaningful relationships between the various points of information.  This environment is analogous to having a Ferrari with only 2 gears. (i.e. – all the right machinery is present to take you to 200 mph, but its not connected properly)
2. Stove Pipe City > This environment features data, reporting and insights.  The typical problem in this environment is that the reporting is somewhat one dimensional and doesn’t properly join in the other reporting environments.  The real challenge here is that different constituencies start to draw their own conclusions so that the organization ends up with several “opinions” on the state of the business versus one de-facto, cooperative data-store.

Within each of these general environments the opportunity exists to take your corporate reporting around the supply chain function to loftier heights.  The keys for a successful and comprehensive analytics program in the supply chain starts with these key ingredients:

Supply Chain Dashboard

• Support – from the executive office to the line manager, the company must have support for the initiative.  A key part of building support is specifically identifying the benefits of a analytics initiative.
• Vision – a compelling view of analysis and reporting and how it will help accomplish the stated goals.
• Inputs – ensuring that each part of data that the business needs access to is made available.
• Accountability - key stakeholders must be accountable for results but also be empowered with varied resources and the proper mandate to achieve the stated results.

With these ingredients and the properly placed momentum any organization can start to leverage data in their businesses into meaningful and actionable insights.

Update: 9/7/2009 > Thanks to Kinaxis (www.kinaxis.com) and their discussion of this article on their Blog titled: “How do you track metrics against your supply chain?” published on September 4, 2009

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