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Data analytics vital for boosting supply chains
Firms in the supply chain for the consumer products industry will have to turn to emerging technologies such as big data analytics in the near future if they are to tackle declines in revenue seen in recent years.
This is according to research by Gartner, which noted that today's climate presents a great deal of uncertainty to these organizations, with an unstable global economy and expectations that demand volatility will continue to increase weighing on firms' profitability.
Steve Steutermann, research vice-president at the firm, said: "In this scenario, increasing revenue growth means finding new markets, increasing market share and improving on-shelf availability (OSA) of products sold.
"Supply chain leaders that can measure OSA and collaborate with retailers to improve shelf availability and manage inventories have an advantage versus those CP manufacturers that cannot use customer data to improve OSA."
To make this successful, companies will have to deploy effective data analytics solutions that can improve forecasting for demand, reduce inventories, cut costs and boost service levels, Gartner continued. The use of real-time and predictive analytics will play a key role in identifying future trends and spotting patterns that firms can adjust to quickly, to ensure they are always in a position to take advantage of the latest developments and changes in the market.
Gartner stated that the next generation of big data analytics solutions will need to integrate both structured and unstructured data for real-time decision making. This will enable firms to become more prescriptive rather than today's pattern-based approaches that address what is currently happening or has already happened.
Being able to accurately forecast demand could be one of the biggest benefits of this, as Gartner's 2014 Trends in Manufacturing study found 87 percent of respondents cited demand volatility as a significant barrier to supply chain planning. This outranked all other impediments, including demand and supply visibility, systems to convert data into insights and lack of talent.
The sharing of this key information between retailers and supply chain partners will also be important, as Gartner stated greater collaboration can help these firms achieve joint goals, such as improving OSA, cutting waste and boosting inventory management.