Supply chain issues in e-commerce firms: Here is how data analytics can help

Supply chain backed with data analytics bring down input cost, increase product availability, and lower lead time significantly writes Yasir Wani, Data Analyst, Omni Channel.


As market experts have been saying for a decade now — Data is the new oil. Today, data is driving businesses and is even being purchased by companies for business strategies. Solutions derived from big data analytics can help in coming up with fruitful business processes, practices, insights, and ideas.

And leveraging big data becomes an absolute must when it is about supply chain management for e-commerce ventures because of the ever-changing customer preferences and logistical issues due to it. It has become no short of a jigsaw puzzle for e-commerce firms to even identify demand these days and thus, by collecting, documenting, and analyzing data in real time, firms can better prepare in catering to customer demand. Supply chain backed with data analytics bring down input cost, increase product availability, and lower lead time significantly. It helps a manager in understanding the situation of the business and boosts faster, better, and timely decision making.

The perks of data driven supply chain

The e-commerce business has grown by leaps and bounds and consequently, the volume of traffic generated is huge. Thus, the role of data analysis in supply chain management is crucial for businesses in accommodating sudden demand changes.

The best part of data analytics is — it provides valuable insight for business of every size. Here are the major areas where data analysis can play a pivotal role:

1. Out of stock product detection and its prevention

2. Detection of fraud

3. Helping in maintaining a demand-supply balance

4. In quantification of benefits

5. Compliance of contracts

6. Warehouse space allocation

7. Stock relocation

8. Allocation of picking zones for workers

9. Scheduling of customer delivery

10. Optimization of shelf space

11. Predictability of demand

12. Inventory management

The above advantages envelope every aspect — production, sourcing, warehouse management, transportation, point of sales, consumer service — of supply chain management for e-commerce firms.

Data analytics boosts productivity

— Use of data prevents an e-commerce firm from running out of in-demand stock. It sorts the issue of big inventories which are often expensive. Often perishable products turn bad due to over stocking. This can also be prevented by exploiting data.

— As businesses become more dynamic, it is pertinent to combat the possibility of glitch. Use of big data can help in prediction and prevention of future uncertainties.

— In supply chain management, data analysis can help in accurately predicting the arrival time of every product shipment and to respond accordingly. Also, the technology can forecast bad weather conditions in an area enabling suppliers to avoid routes that could be affected. Not just this, data science can also help in figuring out what products are likely to be in demand as a result of the change in weather conditions.

The challenges in path of data transformation

Despite data analytics revolution sweeping businesses, some e-commerce firms have yet not been able to leverage data to transform their business processes. This is mostly because, some companies do not focus on ensuring a framework to explore, analyze, and capture big data in their supply chain management. Yet another reason for businesses not being able to reap benefits of big data is — the lack of vision in the use of data analytics. Supply chain managers, even those with technical skills, have little experience with data analysis. Also, firms yet don’t hire data scientists who can help them in drawing crucial business insights.

The world of e-commerce is fast and competitive. Consumer trends, weather, other outside factors can substantially impact the supply chain. But the good news is — e-commerce companies are never too late to leverage data analytics in their supply chain management. Besides turning every crisis into an opportunity, using smart data analysis can make e-commerce ventures more agile and responsive.

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