The way a company manages its supply chain and logistics is arguably one of the most important decisions they will make. Getting the right quantity of products, at the right time, to the right place at the right price impacts a business in multiple areas. Ultimately, an optimized supply chain can be the difference between a successful and thriving business and one that is barely afloat, or worse.
One way to create a supply chain that works best is by utilizing big data.
Big data can seem overwhelming. Its massive volume, great variety and speed at which it must be processed can make the thought of mining for insights seem almost out of reach. However, mining big data can turn up patterns and reveal great insights, including how to best manage a supply chain.
Read on and discover the four pieces of data that should be collected to create a top-notch supply chain, and what each can reveal if analyzed correctly.
1) Supplier FOB and freight into the last mile distributor
Some suppliers only provide the delivered cost. This minimal information limits the customer’s ability to manage inbound freight costs. Having the supplier FOB and freight into the last mile distributor information allows for a more complete understanding of true FOB and true freight costs.
With this wider scope, potential opportunities can be considered regarding moving product inbound into the distributor at a lower landed cost. Negotiations over price are more informed since businesses have a greater understanding of costs and likely have multiple options. Considerations such as speed of delivery (and its associated costs) can also be factored into the decision process.
2) Additional supplier FOB points
With more points of information, operators can make smarter decisions about their supply chains. Understanding if products are available at other supplier FOB points, or if products can be obtained from another supplier allows businesses to consider price, reliability, speed of delivery and more when deciding whom to work with. Ultimately, a restaurant’s supply chain may be able to move products inbound at a lower landed cost.
Should one supplier be out of, or have a limited supply of a product, restaurant operators can consider best second options. Consistently having product on hand translates to regular business from customers: Restaurants recognize when a supplier is dependable.
3) Real-time inventory
Everything moves quickly; the supply chain must be able to keep up. A kink or slowdown in the supply chain can have a devastating impact on a business.
While every business prefers predictable and steady situations, things sometimes happen that are beyond anyone’s control. KINEXO provides real-time inventory on all of the items within their control. By knowing the real-time inventory of supply chain partners, operators can be agile and adapt to situations and troubleshoot emergencies, and ultimately ensure less negative effect on their bottom line.
4) Activity-based costing
Knowing the cost for each step in the supply chain along with the data points noted above enables businesses to be evaluative.
Consideration can be given to whether additional distribution centers or forwarding warehouses are needed to meet supply requirements. Decisions regarding the best locations for distribution centers or forwarding warehouses based on freight, warehousing, and labor costs in those areas can also be reviewed.
The supply chain requires cooperation among multiple players. Recognizing each company’s role and the associated costs for each link in the chain helps operators control (and perhaps reduce) costs and improve reliability.
KINEXO strategically propels companies forward by providing highly customized supply chain solutions proven to reduce costs, improve transparency, maximize operating efficiency, and increase profitability. Part of the Berkshire Hathaway portfolio of companies, KINEXO is one of the most trusted partners in supply chain management. For more information, visit gokinexo.com.