Big Data Trends To Keep an Eye on in 2016
- Big Data Trends in Inventory Data Management
- Inventory Optimization Will Be The Biggest Trend to Watch
- Big Data Will Fuel Inventory Optimization
The biggest challenges facing big data today are the methods in which to capture data sets and what to do with the data once it has been captured. Many companies today use a selection of disparate systems to manage their business, such as Enterprise Resource Planning (ERP) or Warehouse Management Systems (WMS). These systems can be very robust when tracking inventory turnover and accounting data, but they often fail to offer advanced or intelligent analysis to improve business operations.
For distributors and manufacturers, the challenge of big data is unifying the business around a core platform of technology that manages business critical data while also extending business analytics for continuous supply chain improvement without breaking the bank. There are 3 costly challenges that if not addressed can lead to unrealized revenue and in some cases leaves the door for competitors to sneak in to steal sales and market share.
- Working Capital Constraints – If your business is carrying too much inventory, it is highly likely that your cash flow is suffering. Without a healthy cash balance, it is hard to invest into growth areas of the business.
- Diminishing Return on Investments – High carrying costs and excess inventory eat away at profits and large volumes of obsolete inventory, that has to be written off balance sheets as a loss, can severely impact the profitability of a wholesaler or distributor, as well.
- Crippling Infrastructure Costs & Maintenance – Many companies still operate with legacy applications and technology that is decades old. These applications lack critical data processing power and functionality to help businesses more accurately optimize inventory levels to keep costs down and customer service high.
Changing processes can be difficult. With a major overhaul of processes such as the implementation of big data analytics, there will always be an element of inertia. In addition to the technological challenges, there will always be a need for systems on boarding and additional training to enable personnel to operate the new systems. People within the organization may be resistant to the use and implementation of the new technology, and driving cultural change is by far the biggest challenge here.
The supply chain industry and the business model’s of suppliers, wholesalers and distributors has continued to evolve and grow over the past decade, but the systems and technology used to manage operations has lagged behind. There is a growing need in the supply chain industry for affordable, flexible and intelligent inventory optimization software to extend advanced analytics to support out dated systems.
Big Data Trends in Inventory Data Management
In order to facilitate change, new talent needs to be recruited and retained. Whilst the supply chain industry boasts a wealth of career opportunities for those with the right skills, there needs to be more emphasis on communicating and defining these career paths to attract the right people.
Different hardware and operating systems such as scanners, data logging software, web-based applications and smart devices create a wealth of data. However; the challenge is managing that data, and being able to control and present it in a manner that is useful without the sheer weight the data becoming a burden to the business.
Even more forward looking is the concept of “The Internet of Things” that forecasts that most every device will be connected to enhance the end user’s experience and to ensure manufacturers can keep a pulse on the effectiveness and health of their products even after they have been sold to the customer. Everything from smart washers and dryers to bulldozers will be sending continuous streams of data out in real-time.
Which raises the questions, where is all this data going to be stored and how will we know what data matters? Interconnected devices will make access to data easier than ever, but there needs to be a method of being able to access ‘the data that truly matters’.
Inventory Optimization Will Be The Biggest Trend to Watch
The future of data management shows a growth of operating systems that aim to work alongside existing programs such as warehouse management systems and enterprise resource planning tools. Cloud based systems, such as EazyStock, are low cost optimization add on tools that have the ability to unify disparate management systems and complement other inventory management systems to give an overview of inventory performance alongside other company resources in real-time.
Optimization software works to improve planning and replenishment processes that results in creating an inventory system that is lean and balanced. Excess stock and obsolete stock levels are the biggest threats to the profitability of wholesale distribution operations, and eradicating these two things also helps to reduce the carrying costs of the business.
EazyStock for instance, can be set up to automate purchasing and reordering processes to deliver higher forecasting accuracy, helping to optimize stock purchase amounts and reducing the risk of inventory obsolescence. Bidirectional integration works with ERP systems to analyze supplier lead times, volume pricing discounts and target safety stock levels to ensure the right economic order quantity is reached for ever item level purchase order. This automation reduces working capital tied up in stock, it also ensures that customer orders are filled and that the correct safety stock levels are kept across every warehouse location.
Big Data Will Fuel Inventory Optimization
Optimization software is designed to capture massive amounts of data to analyze and report out intelligent business operational trends to enhance supply chain visibility and profitability. Optimization software centralizes system data for a 360 degree view of operations, customer service, sales and finance.
The software also centralizes operational planning, helping purchasing and forecasting decisions to be made from one location across any number of different stock locations. This increases the inventory control that operations managers have over each warehouse and reduces costs and downtime.
These systems also help Key Performance Indicator (KPI) alignment across operations. By integrating with ERPs, the performance of the supply chain can be analyzed alongside that of other aspects of the business to enable strategic goals to be met each day, month, quarter and year. These systems allow executive management, finance managers and operations to have access to analytic data that facilitates actionable and profitable change.
For distributors and manufacturers, the challenge of big data is unifying the business around a core platform of technology that manages business critical data while also extending business analytics for continuous supply chain improvement without breaking the bank.
In this regard, it will be also critical if the ERP system and the given resources that are used can handle the processing of big data related tasks. Sometimes it is even the better alternative to extend the existing ERP system with an ERP add-on that can work cloud-based and can offer these big data features that are needed. Of course, this is a decision that has to be performed company individually. For further information about this topic on how to extend your ERP system to the cloud, have a look at the following guide: