Kuebix Predictive Analytics TMS

What is Predictive Analytics and How is it Used in Supply Chain Operations?

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You may be familiar with the term predictive analytics – but have you ever stopped to ask yourself what it really means for your supply chain? Analytics help companies streamline process efficiencies and make sure important trends aren’t overlooked. Regardless of the industry your company is operating in, predictive analytics can help your company interpret their current performance to help them better understand and predict their future. 

Breaking it Down – Defining Predictive Analytics

Predictive analytics is formally defined as “the use of data, statistical algorithms and machine learning techniques to identify the likelihood of future outcomes based on historical data.” It extends beyond analysis of current operations and provides the best possible projection of what a company’s performance will look like in the future. Businesses who utilize predictive analytics can uncover patterns and relationships in their structured and unstructured data. 

Predictive analytics is especially useful because it automates the process of forecasting. Companies who utilize predictive analytics can then place their focus on critical daily tasks instead of going through a manual forecasting process. The biggest challenge associated with predictive analytics is that it requires a substantial amount of historical data. If the software doesn’t have enough data, it will have a hard time finding and visually displaying patterns and trends.

The MHI Industry report revealed that the number of supply chain professionals using predictive analytics has grown 76% from 2017 to 2019. Earlier implementations of predictive analytics focused on inventory management to help reduce cycle times and improve customer service. Over the past couple of years, the concept of predictive analytics has evolved and can now be applied across industries including healthcare and transportation planning.

Companies utilizing the Internet of Things (IoT) are already taking steps towards collecting the data needed for predictive analytics. Whether they realize it or not, the data they’re collecting can fuel their efforts towards projecting and improving the future of their supply chains. For example, a company utilizing predictive analytics in their supply chain can view historical data about on time delivery (OTD) to make better decisions about who they book with in the future. 

Harnessing the Power of Predictive Analytics in Supply Chains

If you’re like many shippers, this type of advanced technology might seem outside of your grasp. With the help of a transportation management system with built-in predictive analytics functionality, however, any shipper can leverage this futuristic tech. TMSs can provide predictive analytics to give you the immediate intelligence you need to make better logistics decisions every day. 

Whether it’s holding your carriers accountable through carrier scorecards, managing your yards and docks more efficiently, or simply ensuring that you are paying the lowest rates for the best service, predictive analytics gives you the information you need to make decisions that will be real game-changers for your business.

 

2018 Predictions

2018 Supply Chain Predictions

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In the book, The Living Supply Chain, the authors argue that, “Speeding up the supply chain is at the root of everything that is good: improved revenue, reduced working capital, higher profitability, and less obsolete inventory. Conversely, slowing down the supply chain is at the root of everything that is bad: working capital write-offs, reduced profitability, and slowing revenues.”

To “speed” up the supply chain is to invest in change and change will come with the digital transformation of the supply chain, which is the major focus for executives in 2018. Much change in the supply chain industry will be due to innovative technologies for digital transformations, along with the recent tax reforms, and the still-current driver shortage/capacity crunch. Digital transformation of the supply chain will change everything – for the better.

These are the innovative technologies that I predict companies must use to undergo this transformation within their supply chains:

Cloud-based technology deployments lower cost of ownership due to not having a large capital expenditure on hardware and upgrades. Cloud-based solutions are ideal for any size business because they can be scaled up as your business grows and are easier to set-up and manage.

Advanced Analytics will support real-time decision making based on data captured across the supply chain. With analytics, businesses can more effectively predict and fill demand. You can also manage relationships with carriers, suppliers and customers while improving processes. Using advanced analytics in a transportation management network to look at historical traffic patterns, you can plan a truck’s route that takes into account time delays for more accurate arrival times.

Tracking and Tracing of raw materials through manufacturing to the end customer must take on Amazon-like capabilities, meaning customers will know where their orders are at any one time, just like when you order from Amazon. With track & trace, you will get deep visibility to SKU-level information from first-mile to last-mile, including the tracking of costs to better monitor transport spend. Communications with customers will be proactive instead of reactive, alerting customers if their order will be late or when it will arrive.

Supply Chain Visibility will make data collected from end-to-end across the supply chain available to all stakeholders, giving them greater control and visibility into what is happening across the enterprise. You can uncover roadblocks within your supply chain that could lead to delays in shipping.

Blockchain will provide interconnectivity between ledgers of supply chain trading partners, enhancing traceability of transaction history. Automating the flow of information among trading partners provides transparency and boosts efficiencies. Blockchain works with cryptocurrency to determine payment amounts, allowing drivers to be paid as they complete parts of their journey. This completely removes the transport broker from the equation, giving drivers access to quicker settlement. However, blockchain is still a technology that needs further development before it can be proved useful to some businesses.

Artificial Intelligence initiatives require specialists who are hard to find, potentially stalling any projects. AI utilizes algorithms to detect patterns in vast volumes of data and interpret their meaning such as predicting whether a carrier will be on-time based on weather conditions and past performance.

Predictive Analytics, often combined with Artificial Intelligence, helps shippers understand, automate and optimize their supply chain processes to gain better efficiencies. Predictive analytics provides shippers with actionable intelligence to guide the decision-making process, helping you to reduce costs and optimize operations. Scorecards on carrier performance can alert shippers on which carriers can better meet their service obligations.

The Internet of Things (IoT) – More devices, from pallets to trucks will have sensors embedded to transmit status and performance data. This real-time information will be used for monitoring everything from equipment health to asset locations to order tracking and more. Advanced analytical systems use the data to uncover trends that lead to performance improvements and cost reductions.

Kuebix TMS is a game-changer for your business in 2018, regardless of the company size because Kuebix offers advanced applications to meet the needs of even the most complex supply chain operations. Kuebix TMS finds the best freight rates for all modes, books and tracks shipments, audits and manages transport finances and utilizes advanced analytics to measure and monitor trends and performance activities. Kuebix TMS offers full tracking and visibility of your freight expense down to the SKU level across every mode and along every step of its journey.