A Simple Explanation of Supply Chain Business Intelligence

June 26, 2014
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ImageOkay, so you’re ready to start using Business Intelligence optimize your supply chain because everyone else is, and it only makes sense that you do too. Well, first of all let’s understand what Business Intelligence means.

ImageOkay, so you’re ready to start using Business Intelligence optimize your supply chain because everyone else is, and it only makes sense that you do too. Well, first of all let’s understand what Business Intelligence means.

You’ve heard that BI improves decision making, helps your company optimize the transportation and logistics space, allowing companies to be more profitable and increase efficiencies. Good news: it does all that and more. So where do you start? Well, first of all let’s understand what Business Intelligence means.

Part of the difficulty in defining BI is that it’s become a catch-all phrase describing a system rather than an end result. A BI “system” isn’t a single application or analysis, or even a type of data. When most people refer to a BI system, they’re usually talking about a bunch of methodologies, software applications and tools used to organize and analyze data.

Let’s ignore mechanics of the system and consider the effects of the system, the end result of which, gives us the useful information we need.

Basically, your company has spent — and continues to spend — a ton of money collecting tons of data related to your supply chain. Some of it relevant, some of it not. It seems logical that this data should be leveraged as an asset, and some sense made of it. Intuitively, this would help your business be more successful. If you think about it, the data itself is really of little value. Being able to convert the data into something that can be interpreted and acted upon is what makes it valuable. As an example, let’s consider the following scenario:

“212″ is a piece of data. In and of itself it is not very useful. But if we can interpret that data as the boiling point of water, then, we can use that knowledge to our benefit. For example, if the water is 212° Fahrenheit (knowledge), do not put you hand in it (action). Awesome. Data has just been converted into useful, actionable information. So “actionable information” is what we want to create from data.

Now within your company there are lots of people, and they all need this actionable information. To make matters more complicated, each of the people, or groups of people, are probably interested in different data. If you consider how much data your company has collected, you’ll realize there’s so much of it — mostly diverse and fragmented — that it’s highly unlikely everybody needs (or even wants) access to all of it. So at the end of the day, getting the right information to the right person in timely manner and in the right format is critical.

Thanks to business intelligence tools, companies are no longer inundated in piles of data that they don’t know what to do with. Instead, logistics managers are using BI technologies to find real meaning in their sea of numbers—and take actions that boost supply chain efficiency and effectiveness.

And that’s what Business Intelligence is.

Not just converting data into actionable information; but getting the right information into the hands of the right people at the right time in the right format.