Adopt Advanced Analytics to resurrect supply chains for JIT manufacturers
by Dr. Bikramjit Chaudhari, on Jul 17, 2020 7:37:43 PM
Estimated reading time: 3 mins
Standing tall in face of calamities comes naturally to some people, businesses, and institutions. Supposedly, having a high 3Q – Intelligence Quotient, Emotional Quotient, and Adversity Quotient – these entities are actually a by-product and a direct function of data analytics that empower them to take the right actions at the right time. These few adversity leaders have an anti-fragile mind set; they show results even while others have literally stopped thinking under pressure. They create headways even amidst trials and tribulations by using downstream data and Advanced Analytics tools atop a digital platform.
Downstream data – The lifeline for Advanced Analytics based decision making
To give a quick analogy, the complete blood count gives a highly accurate analysis of the health status of a person. Similarly, the downstream data can be holistically analysed to derive the demand of different products and brands, across geographies, and different demographics OR rather the health of the product in the market. Yes, it is useful during maritime and extremely useful during unprecedented times, such as the recent disruptions due to global pandemics.
However, there are two scenarios at the two ends of the supply chain:
- Scenario 1: With sudden insurmountable changes and unfavourable market conditions, the finished goods supply chains go kaput with high inventories in some localized areas and near complete depletion in others. A return-back policy within stipulated time enables the manufacturer to normalize this situation.
- Scenario 2: The fulfilment of the raw material stocks and inventory has to be equally robust. The products and brands that get quickly depleted and have a high demand need to replenished in a JIT environment – both to reduce finished goods inventory pile-up and quick fulfilment of demand.
The two above mentioned scenarios definitely have workable solutions by harnessing a robust supply chain. But WHAT IF the supply chains have been disrupted. You have no other option than booking losses in either situations. Another option, and the wiser one, is having a complete tab on the market pulse with Advanced Analytics solutions to gauge the demand and supply and rope in a different supply chain or to BUY OUT one – either Forward or Backward or Both – specifically to fulfil JIT.
So what it should be - Forward Integration or Backward Integration - to fulfil JIT? Advanced Analytics gives the answer
The key is in anticipating demand at the right time. JIT no doubt reduces inventory at both ends. However, the fulfilment on one side and the distribution on the other side has to be seamless for JIT culture to survive, thrive, and prosper. Advanced Analytics solutions and Machine Learning algorithms can make highly accurate forecasts, or rather NOWCASTS.
Dr. Bikramjit Chaudhari, SVP & Global Head – Advanced Analytics & Data Sciences offers a framework for predicting product demand in the market through forecasts and nowcasts. Watch now>
Advanced Analytics solutions can generate a 360-degree view of the market situation of a product or a brand based on downstream data that too with high levels of granularity. It offers an all-encompassing view that cuts through almost all touch points of the end-to-end supply chain. A backward integration to fulfil raw material supplies and a forward integration to ensure seamless distribution or rather both would be an impromptu answer. But Advanced Analytics solutions offer a highly accurate decision making power.
The trials and tribulations of sudden market disruptions may last for a year or two. The data analysis to surmount the inevitable may become outliers later as the situations attain normalcy. But the steps taken by the manufacturers to alleviate the situation in a TIMELY MANNER to BUILD or BUY OUT their own supply chains, enable them to develop a robust infrastructure or rather a robust ecosystem that lasts a lifetime.
Advanced Analytics augments the decision making power of businesses. It is that dependable skill set that invariably gives rise to adversity leadership, previously thought to be an inborn trait of the chosen few. Advanced Analytics atop downstream data enables JIT manufacturers to anticipate demand and supply in the normal as well as not so normal market conditions and stay ahead.