2) Supply chain data
The supply chain is another wellspring of actionable data. Retailers receive a large volume of B2B transaction types from their suppliers on an annual basis. With big data analytics, retailers can analyse these transactions and pinpoint supplier performance trends in order to streamline processes.
Supply chain analytics is relatively new, however, the retail industry is beginning to take advantage of the insights and business intelligence it can provide to improve supply chain performance. For example, many retailers request suppliers exchange Advanced Ship Notices as these notify the retailer of an impending delivery of goods to their store. Retailers can use this to track trading partner performance across their supply chain.
Beyond tracking historical performance, smart technologies can take other factors into account. If a supplier in Brazil regularly ships content to Europe, but an Atlantic storm is brewing, it might be best to order that stock from a separate supplier on that occasion to ensure a smooth delivery. Big data analytics offer the ability to see beyond issues with the supplier itself, incorporating external factors which may previously have been overlooked.
Analysis of historical information plays a large role in improving logistics processes as it can also be utilised to make more accurate forecasting estimates. These insights can then be supplied to the operations and logistics department. As one example, retailers can consider retail spend over Christmas and then use this information the following year to predict the levels of new stock required to cover the holiday period.
While forecasting potential stock levels has previously been considered risky, big data analytics allows retailers to more accurately estimate both required stock levels and also potential consumer spend levels.
3) Internet of Things
Developments in connected devices and the Internet of Things (IoT) mean that big data will play an even larger role in transforming visibility across the supply chain. IoT extends beyond consumer wearables or connected white-goods; it enables online businesses to track activity and monitor the environment through the wider connected network.
As such, retailers will be able to fine-tune logistics by monitoring shipment delivery information, optimising delivery routes by factoring in environmental changes, and monitoring third-party providers via B2B transactions exchanged between the company and suppliers, as well as examining the timeliness of their deliveries.
Connected devices will enable retailers to monitor product consumption patterns within stores, so new inventory can be ordered as soon as the analytics platform detects that stock is running low. Retailers have traditionally implemented Vendor Managed Inventory processes with their suppliers. Moving forwards the combination of B2B analytics and IoT will enable the adoption of 'Device Managed Inventory' processes. While particularly useful for higher value goods, in theory, retailers can take advantage of this process for any item to improve overall customer satisfaction levels by ensuring stock is always available.
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