Digital data has become integral to supply chain management. Logistics businesses have raced to implement technologies to gather more data, but now, many find themselves with more information than they know how to use. Organisations must understand how to leverage supply chain data for it to provide any value.

As much as 73% of all data within an enterprise goes unused. That’s a considerable business opportunity that many companies are missing out on. Here are five of the best ways to avoid that and make the most of supply chain data.

1. Predict Incoming Disruptions

Supply chains are prone to disruption, as the COVID-19 pandemic has highlighted. Consequently, one of the best data-driven supply chain strategies is to monitor incoming disruptions, enabling faster reactions.

Supply chain data can reveal macroeconomic developments, consumer behaviour trends, political instability and severe weather patterns. Highlighting these factors and how they affect supply chains can help organisations identify incoming disruptions and estimate how they’ll impact operations. They can then adapt as necessary to minimise losses.

For example, consumers tend to panic buy amid fears of shortages. Some petrol stations saw their fuel levels drop to just 20% capacity in 2021 because of this trend. Data-driven companies can prevent this by increasing their stock levels as worrying signs rise, accounting for panic-buying.

2. Optimise Inventories

Relatedly, supply chain data can help businesses optimise their inventories. That applies to both stock levels and their organisation.

Manual processes create inaccurate order and inventory counts, slowing operations when workers can’t find the goods they need. Similarly, this inventory distortion will exacerbate the bullwhip effect amid demand shifts, leading to considerable losses and delays. If supply chain organisations used digital data-driven approaches instead, they could avoid these scenarios.

Businesses should use internet of things (IoT) sensors, RFID tags and telematics to provide a comprehensive, real-time picture of inventory levels and locations. They can then organise this data in warehouse management systems (WMS) to create a single source of truth for inventory questions. To make the most of this information, businesses should monitor trends in stock levels and efficiency to adjust seasonal ordering and reorganise warehouses for streamlined picking.

3. Identify Ideal Routes and Transportation Modes

Another way to leverage supply chain data is to monitor shipments in transit. Telematics systems can provide a picture of shipment times and the different routes drivers take. Analysing this data can reveal any inefficiencies and potential improvements.

If shipments along one route frequently take longer than expected or contain multiple stops, businesses should look into it. There may be a faster alternative that drivers can start using instead. Conversely, trends among unusually fast shipments can reveal potential improvements in other areas.

Temperature tracking systems can automatically alert logistics staff when temperature-sensitive shipments are in danger of spoilage. Over time, trends from these alerts will reveal which vehicles and routes are ideal for these sensitive shipments. Adjusting according to this type of data will help improve shipment quality across the board.

4. Enhance Collaboration

As more companies embrace data technologies, supply chains should emphasise sharing the information they collect. Supply chain data is of limited use in a silo. Sharing it with relevant partners and third parties will enable greater transparency and collaboration.

This visibility is crucial to becoming more flexible. When a supplier encounters difficulties meeting demand, they can alert manufacturers, who, in turn, alert logistics partners and downstream partners. Every member of the supply chain can then adapt to ensure the shortage causes minimal disruption and confusion.

The key to this collaboration is real-time data sharing. Supply chain organisations should share IoT alerts with partners and encourage them to do the same. Using the same cloud platform across all parties will help consolidate this information in a single window and reduce confusion.

5. Enable Ongoing Improvements

Regardless of a company’s specific supply chain strategy, they should leverage their data to find and resolve inefficiencies. Even with abundant data, businesses can still make poor strategic decisions. Regular review will help reveal when this happens, informing further changes.

After adjusting supply chain operations, companies should monitor relevant data according to their goals. That could be profits, revenue, shipment speed, volume or any other key performance indicators. If the KPI improves after the change, businesses could try implementing similar changes elsewhere, and if it didn’t, they could try a new strategy.

These reviews can also help reveal if the data itself may be inaccurate or incomplete. Poor-quality data can cost up to 30% of a business’s revenue, so finding and fixing data issues early is critical. If data-driven strategies repeatedly fall short, it may be a data problem.

Optimise Your Supply Chain Strategy With Data

The best supply chain strategies are data-driven. When organisations know what to do with their data, they can turn these resources into a competitive advantage.

As supply chain data grows, these strategies’ potential impacts will also rise. Those that can capitalise on them early could see long-term success and those that don’t may lag behind the competition for long.