Businesses realize the importance of supply-chain analytics to meet business goals and expand the ROI.
With big data getting even more prominent, organizations small as well as large are struggling to distill it into meaningful insights to help leaders drive strategic business decisions. Best-in-class organizations are creating centralized, formal, and hybrid supply-chain analytics programs. While they provide oversight and governance, hybrid programs help firms to combine the holistic perspective with flexibility and insights into the business needs supported by the decentralized implementation.
APQC’s 2019 Analytics conducted a study to understand the Supply Chain of over 200 organizations. The study revealed that 79% had seen an increase in their investments in supply-chain analytics in the time of three years. With the budget increasing, organizations are also conducting more formal analytics programs for employees. About 95% of the respondents confirmed having a structured analytics program, versus just 77% in 2016. This is a clear indication that firms see analytics capabilities deep-rooted in their supply chain as a must-have.
Considering the structure of supply-chain analytics programs, 40% of firms in 2019 reported that they had a hybrid structure, as compared with only 29% in 2016. Another 40% stood by having centralized supply-chain analytics in 2019, as compared with 32% in 2016. This giant difference over the past three years is the result of a greater operational and execution-focus in supply chains, although the decentralized structures have remained steady at 15% over these years.
Organizations with centralized analytics structures have benefits like:
- Holistic perspective — the analytics projects get tied together into a portfolio, looking for overlapping synergies,
- One source of the truth — integrated methodologies, data sources, policies templates, and training relate back to the common source;
- Top-down, bottom-up monitoring – Centralization provides the ability to look at analytics across the organization and departments, measure project impact against organizational goals, and to drill into specific projects for root-cause analysis.
The maximum benefit is enjoyed by the organizations that have hybrid analytics structures because they achieve centralized as well as embedded structure benefits in the business. This allows the analysts to build trust with decision-makers, develop business domain knowledge, and look for solutions specific to the business’s needs.
Many businesses have specific analytics needs that spur their shift to data-driven decision makings. These could be about improving their understanding of customer needs, or even supporting staff, and policy decisions. The need to balance centralized governance with decentralized implementation becomes more crucial than ever before. In 2020, organizations can expect to witness an increase in the formation of hybrid supply-chain analytics programs aligned with business needs. For analytics programs to keep moving in the correct direction, it will require organizations to have a well-defined process with governance that includes knowledge sharing and collaboration between centralized and decentralized groups.