How to execute your business intelligence study in supply chain operation?

Word Cloud "Business Intelligence"
Sourcing Trends

Business intelligence has been one of the very important strategic pillar for many OEMs, and has been adopted across various divisions to benchmark their performance of past & current. Further this analysis is also used to streamline future activities.

Question that often pops up is what is ideal way to carry out the business intelligence study in procurement industry?

One of the most common mistake that individuals tend to do during business intelligence study is commencing the data gathering activity without knowing the data relevance, followed by bigger mistake of not knowing where this data points will be put to use.

What we trying to lead you at is, before commencing the BI study one should know the purpose of the same. For example; supply chain intelligence team must clearly indicate the purpose of study. Just for reference sake let us assume a purpose-supplier performance evaluation.

Now when we are clear about the objective of BI study, we must zero down on KPIs that will help in measuring of defined purpose. An important thing to remember while fixating on KPIs is that they must be the real indicator of the desired output. In case of our earlier referred example, lead time of delivery is the right KPI, while the number of employees is not.

To surmise the above para, supply chain intelligence team must be very cautious in terms of clearly defining the output and associated KPIs.

Once the KPIs are frozen, close to 50% of task is done. Rest 50% comprises locating the data point centers across organization that can support you in completing the remaining quest. As BI study takes good amount of organization resources, that is, it takes certain cost from the company’s pocket, it makes sense to leverage the generated output across organization, and not limited to one department.

Now in order for this to happen, you will need to tap into various data point centers spread across enterprise, which then could tapped into to structure the desired output.

Relevant question to ask here would be; why do procurement specific BI study be of any relevance to various department of an organization?

A simple answer to that is – a case scenario where supplier performance evaluation can contain contribution to innovation as a KPI, an information greatly relevant for R&D and Sales team. While R&D breathes and lives on innovation information, sales team can use the same during their pitch to end customers.

Lets come back to our original content now, which is, how to execute BI study……..

Once you understand the relevant data point centers , you start gathering data. Please note that it would be a disaster to apply filter to information during this phase, and one should gather as much of content as possible during this part of BI study.

On completion of the aforementioned step, supply chain intelligence team must sit with varied team of professionals and skim this data. Once the skimming is completed, team is left with important pieces of information that now must be arranged in right buckets and categories.

This becomes your feedstock for KPIs, which can be pushed to the final execution window by tagging data points to various weight-ages. Assigning weight-ages makes sense as different feedstock might have different impact on KPI rating.

This is end of BI study which quiet certainly will help sourcing leads in shaping their strategic sourcing cycle.

Market has many automated portals to execute the same, however success-full BI study can be carried out only by using hybrid of manual & automated solutions. A cherry on cake would be in the form of BI + MI study output. This is primarily because, knowing what is happening internally is important but understanding external environment too, will prepare you well for supply chain dynamics.

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