Based on an article titled: "The Case for Business Intelligence" by James A. Cooke
Are you looking for a different way to control your organization's supply chain costs in this challenging economic period? The solution might be business intelligence software.
Business intelligence tools that reflect a summary of data from various databases and then perform data analysis can help organizations manage the supply chain by showing the organization where to take action that will provide the best opportunity for improvement.
Business intelligence solutions have been introduced previously. They have been around for about two decades. However, in the past, they focused primarily on marketing, sales, and finance, and only in the last two years has there been a tendency to address supply chain and logistics domains.
Business intelligence can provide tools for performance monitoring, pointing out product expenses and revenues from products and customers. Such performance analysis can enable the management of various scenarios in the supply chain.
In the distribution field, for example, business intelligence software can enable the management of couriers and subcontractors. It's easy to see which courier is meeting its goals and providing good service. Moreover, such software can also identify opportunities to reduce costs and encourage service improvement by directing the company's shipments to those transport providers who received the best service rating on the one hand and the lowest costs on the other.
Thus, companies can use business intelligence software to analyze the factors contributing to a subcontractor's performance, such as the percentage of orders arriving on time, the percentage of damaged items, invoice detail accuracy, and adherence to delivery schedules.
For companies using more than one logistics provider, business intelligence software can "rate" and prioritize suppliers against several fixed metrics, allowing for the identification of good performances and less good ones.
Historically, companies had to purchase licenses for BI solutions and install them on company servers. Today, more and more software providers offer SaaS (Software as a Service), so the software "sits" on the technology provider's servers instead of the company’s.
Since BI software relies on information generated in other systems, integration is required, which is no small challenge. However, new techniques promise to address this challenge and deal with various factors that interfere with integration. In the past, a preliminary step of data warehousing was required. Today, integration can be addressed through a process called "data federation," that is, by extracting data from other systems only when needed, without warehouse mediation.
In conclusion, although organizations must save on expenses, postponing investment in BI may be wrong in the long run. If proper measurement is performed, and costs can be seen - many expenses can be saved in the long run using BI tools.
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