Predictive analytics in supply chain is used to make a forecast by reading algorithms based on current and historical. It enables business managers to connect dots between trends, patterns, and associations to proactively respond to future developments. Predictive analytics is improving the efficiency of supply chain processes by collecting and analyzing data for better decision-making. It enables businesses to address issues like stock errors, damaged inventory, and demand miscalculations. In addition, predictive capabilities enable organizations to accurately address customer service, labor unrest, and traffic patterns that can affect shipping and port behavior. Let’s explore the benefits of using predictive analytics in the supply chain.
At Oodles, we provide supply chain software development services to optimize supply chains and automate logistics processes. Our custom supply chain solutions enable businesses to increase profits, optimize procurement management and enhance process transparency.
Benefits of Using Predictive Analytics in Supply Chain
Accurate demand forecasting is a key component of an efficient supply chain. With an accurate picture of demand, manufacturing can improve their service levels after the initial sale of a product without raising the cost. Predictive technologies like machine learning and cloud-based inventory management solutions eliminate overstocking and enable warehouses to operate together to meet customer requirements. The results are high-levels of product uptime, minimal risks, and increased customer service levels.
Businesses are using predictive maintenance to improve supply chain efficiency and maximize equipment uptime. Using IoT sensors and predictive analytics will enable manufacturers to determine when and where machine parts are required. It will enable manufacturers to proactively route the machine parts to a dealer or repair center. It will further reduce excess inventory and costs, avoid costs and disruption of unscheduled downtime and maximize customer loyalty.
The last-mile delivery option is a key area in supply chain where predictive analytics can have a huge impact. According to the International Transport Forum (2016), carbon dioxide emissions from freight transportation account for 30% of carbon emissions from fuel combustion. Using predictive analytics in supply chain areas like route optimization, anticipatory shipping, robotics, and quantifiable improvements can be made in last-mile delivery.
Supply Chain Visibility
3PL service providers can use predictive analytics in the supply chain process to avoid late shipments by monitoring devices. It will improve the visibility of shipment status and location and eliminates costs related to late or off-schedule shipments.
Manufacturers can use advanced analytics in adjusting the pricing as per the market demand. Machine learning algorithms go through a myriad of data points ranging from location to product attributes to make accurate price predictions.
Reduce Downtime and Prevent Defects
Predictive analytics in the supply chain enables manufacturers to identify defects. By identifying the issues and defects ahead of time will enable manufacturers to reduce downtime on the machine loss and save on costs. In addition, predictive analytics and IoT will enable manufacturers to increase the efficiency of their machines by giving information on which pieces of equipment require replacement.
Use Cases: Predictive Analytics in Supply Chain
Large, medium and small enterprises are availing the benefits of predictive analytics to improve the supply chain and logistics processes.
Amazon is using predictive analytics to optimize the supply chain in anticipatory shipping and stocking using real-time data.
Apple is using forecasting capabilities to establish real-time visibility into demand patterns and anticipate online orders of products iPhone and Apple watches to prevent delayed shipments.
Streamlining Supply Chain Processes with Oodles
We are an ERP development company that provides logistics and supply chain software development services that enable enterprises to track inventory updates in real-time, simplify freight options, enhance customer service, reduce workforce costs and plan and manage their transportation costs.
Connect with our ERP team to avail the benefits of our custom supply chain solutions!