Businesses around the world are seeking the next big boost to supply chain management, and many signs point to predictive analytics becoming an essential tool. This technology, which relies on data to determine patterns and predict future outcomes, has plenty of potential. Learn how and why predictive analytics is set to disrupt supply chain technology.
Predictive Analytics Is Bound for Widespread Adoption
MHI, the nation’s largest association for the material handling, logistics, and supply chain industry, highlighted predictive analytics in its 2017 report, “Next Generation Supply Chains.” The association’s annual survey ranked predictive analytics as one of the top three disruptive technologies for supply chains, second only to robotics and automation.
Unlike some of the most widely accepted digital technologies, such as sensors and cloud computing, only about 20 percent of respondents reported that they have already adopted predictive analytics. Though it’s still considered a new technology, an impressive 89 percent of respondents reported that they planned to implement predictive analytics into their companies’ supply chains in the next six years. In just two years, MHI anticipates that the technology will reach a 52 percent adoption rate.
Predictive Analytics Can Help Companies Get Ahead
The retail and marketing industries have used predictive analytics for years, relying on this digital technology to analyze sales patterns, improve customer engagement, and drive conversions. Now, businesses in every industry are increasingly finding that this predictive technology can help them improve supply chain efficiencies. By integrating predictive analytics into supply chain technology, businesses have the potential to streamline logistics and cut costs, both of which can produce desirable results.
While many high-performing companies already make use of this technology, many more companies with average or sub-par performance data are likely to adopt predictive analytics in the near future. Mastering this technology may help underperforming companies improve and become more competitive.
Predictive Analytics Enables Advanced Supply Chain Segmentation
For many companies, predictive analytics will form a key part of the puzzle known as advanced supply chain segmentation. When combined with other high-level digital technologies, such as big data and the internet of things, predictive analytics can drive a comprehensive approach to strategic segmentation. Doing this enables businesses to consider the past, present, and future data, which provides a more forward-thinking approach to advanced supply chain segmentation and enhanced profitability.
To maximize the value of predictive analytics, businesses must determine the most effective methods for implementation. Many experts recommend using a top-down approach, keeping in mind what drives business in the first place. Anticipating security issues will also be of utmost importance as businesses seek to streamline their supply chains without generating expensive errors or data breaches.
Though predictive analytics aims to be one of the most substantial supply chain disruptors of the next few years, many businesses also need a better understanding of the technology’s return on investment (ROI) before integrating it into the supply chain. Once executives can fully comprehend the value and the potential of this digital technology, they can make informed decisions about how and when to implement it.