Supply Chain Analytics – Definition & Importance for Organization

Supply Chain Analytics

Supply chain analytics is the process of analyzing data to improve the efficiency and effectiveness of supply chain operations. By looking at data such as inventory levels, supplier performance, customer orders, and shipping routes, businesses can identify areas where they can improve their operations.

Also, supply chain analytics can provide many benefits to businesses, such as cost savings, improved customer service, and increased efficiency. In today’s data-driven world, having a strong analytics program in place is essential for success. If you’re interested in learning more about supply chain analytics and how it can benefit your business, read on.

The importance of supply chain analytics

As noted before, supply chain analytics is the application of big data and analytics processes to evaluate the demand planning and operations of an organization’s supply chain. By doing this, organizations can gain insight into the factors that contribute to the success or failure of their supply chains and make changes accordingly.

Leveraging analytics can help organizations increase efficiency, reduce waste, and mitigate risks as it relates to demand forecasting. Organizations often use a multi-layered approach leveraging multiple sources of information to accurately predict demand trends.
This data is then analyzed with tools like regression analyses, machine learning algorithms, and artificial intelligence to further clarify the relationship between demand planning, customer demand, and market demand.

Supply chain analytics is a critical tool for businesses as it provides valuable insights that can be used to improve logistics operations and make better-informed decisions about inventory management, pricing models, supplier relationships, product lifecycle management, and other aspects of demand planning.

Ultimately, supply chain analytics is essential for organizations looking to optimize their operations and remain competitive in today’s market.

What types of data that can be analyzed?

When it comes to the use of analytics in supply chain management, there are several different types of data that need to be taken into consideration.

For instance, demand forecasting is a key part of supply chain analytics, as it allows for better demand planning and aids in managing costs. Additionally, demand signals can also be used to measure sales performance, identify disruptions in demand patterns, and generate insight into consumer behavior on a more granular level.

Businesses can also leverage customer profiles to create targeted promotions and increase sales efficiency. Collecting inventory data and creating metrics such as economic order quantity (EOQ) and safety stock level help organizations keep their inventory levels balanced with demand.

Finally, demand-supply analysis can help businesses optimize inventory and production decisions by providing visibility of supply chains’ upstream and downstream partners across multiple tiers. In sum, analytics in supply chain management encompasses many different aspects of data evaluation to ensure maximum efficiency.

How supply chain analytics can be used to improve efficiency?

Supply chain analytics is an invaluable tool for businesses that are looking to improve their efficiency levels. Through demand planning, businesses can use data-driven insights to accurately forecast demand and plan for production and inventory levels in line with customer demand.

Additionally, demand analytics can be used to identify areas of waste within the supply chain, including overproduction or out-of-stocks, so that processes and procedures can be improved. By leveraging analytics tools to make improvements to their supply chain management approaches, businesses can optimize the flow of goods from production through to delivery to reduce costs and generate positive returns on investment.
Ultimately, when it comes to streamlining a company’s operations, proper demand planning and analysis utilizing supply chain analytics can be vital for helping any business become more efficient and profitable.

Examples of supply chain analytics usage in companies

Supply chain analytics can be a powerful tool for businesses, allowing them to optimize their operations and maximize efficiency. Companies in many industries have experienced numerous benefits from using supply chain analytics, ranging from demand planning to inventory tracking.

For example, Walmart has used analytics to increase demand prediction accuracy by up to 80%. This allowed them to significantly reduce the number of goods they kept in stock— but still maintain high customer satisfaction by fielding orders quickly and accurately.
Nike has also leveraged supply chain analytics to enable accurate demand forecasting, so they could forecast short-term demand and purchase what was necessary while spending less on additional prototypes and samples.

Additionally, L’Oreal’s cosmetology analysis shows how it uses demand-sensing technology on its website combined with trackable demand indices from major online retailers like Amazon. This helps them match demand appropriately in their production cycles so that they avoid overproduction or stock outs altogether.

Supply chain analytics can make a big difference for businesses big or small; these examples demonstrate the enormous success companies have seen when leveraging this technology for better demand planning and inventory management.

Using supply chain analytics: Tips for starters

For businesses looking to get started with supply chain analytics, demand planning is a great place to begin. By understanding demand patterns and forecasting demand based on past data, companies can optimize their inventory levels to ensure that they have the right amount of product at the right time.

It’s important to note that demand planning involves more than just predicting demand – it also accounts for seasonality and other external factors, such as sales promotions or unexpected supply disruptions. Furthermore, demand planning can help reduce costs by providing insights into areas such as warehouse operations or labor costs associated with packing and shipping. By utilizing these methods, businesses can improve efficiency and accuracy in their operations and reach higher levels of success.

Once demand planning has been established and adjusted over time according to changing needs, organizations can move on to deeper analytics such as predictive modeling or optimization techniques for reaching, even more, cost savings. With a little foresight and careful consideration of processes, anyone can get started with supply chain analytics.


As you can see, supply chain analytics is a powerful tool that can be used to improve efficiency and optimize performance. When used correctly, it can provide valuable insights into your operation and help you make informed decisions that can have a positive impact on your bottom line.

If you’re not already using this type of data analysis in your business, we encourage you to give it a try. Our team at Cloud9 specializes in helping businesses harness the power of data to improve their operations. Contact us today to learn more about how we can help you get started with supply chain analytics.

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