Supply Chain Analytics and Data-Driven Supply Chain Management

global supply chain management and operations officers course

Data-driven supply chain management and supply chain analytics are two related concepts used to optimise and boost the effectiveness of supply chain operations. Data analytics and sophisticated analytical methods are used in supply chain analytics to examine vast amounts of data pertaining to supply chain operations. On the other hand, data-driven supply chain management uses analytics and data to facilitate tactical and supply chain management strategies

Supply chain analytics and data-driven supply chain management work together to empower organisations to use data and analytics to obtain important insights into their supply chain operations, discover areas for improvement, and make data-driven decisions. All in all, both are involved in enhancing the efficiency of their supply chains by utilising the power of data.

What is Supply Chain Analytics and Why is it Important?

The application of data analytics and advanced analytical tools to analyse and optimise supply chain operations is referred to as supply chain analytics. It entails gathering, analysing, and interpreting data pertaining to different parts of the supply chain. The main goal of supply chain analytics is to obtain insights, discover patterns and trends, and make data-driven supply chain management strategies to improve overall performance in the field. 

It is significant because it gives firms expanded visibility, better decision-making capabilities, higher operational efficiency, proactive risk management, better customer service, and a competitive edge in the highly complex and ever-evolving sector of supply chain management.

What is Data-Driven Supply Chain Management? 

The process of leveraging data and advanced analytics to make educated decisions and optimise supply chain operations is referred to as data-driven supply chain management. It entails gathering, analysing, and using data from numerous sources across the supply chain in order to obtain insights, detect patterns, and drive data-driven activities for enhanced performance, efficiency, and effectiveness.

The main constituents of data-driven supply chain management include:-

  • Data collection
  • Data integration
  • Data analysis
  • Data-driven decision-making 

Machine learning, predictive analytics, and prescriptive analytics are common approaches used to analyse massive and complex data sets, find patterns, trends, and abnormalities, and provide suggestions or improve choices.

Importance of Data Analytics in Supply Chain Management

Data analytics is critical in contemporary supply chain management, providing considerable advantages in terms of efficiency, cost savings, and strategic decision-making. These are some of the most essential reasons why data analytics is vital in supply chain management:-

  • Improved Visibility: Data analytics enables real-time visibility into many parts of the supply chain, such as inventory levels, transit routes, and demand trends. This enables supply chain executives to monitor operations, resolve issues or disruptions, and quickly respond to changing events, resulting in increased overall visibility over the supply chain.
  • Better Forecasting: Data analytics helps supply chain managers to develop accurate demand projections by analysing historical data, consumer preferences, market trends, and other pertinent aspects that result in better demand planning and customer service levels.
  • Improved Operational Efficiency: Data analytics aids in the identification of inefficiencies and opportunities for improvement in supply chain processes that leads to greater operational effectiveness and reduced expenses.
  • Streamlined Inventory Management: Data analytics allows supply chain managers to improve inventory levels by examining data on demand patterns, lead times, and other factors that contribute to the enhancement of working capital management and lower inventory expenses.
  • Optimised Supplier Management: Data analytics aids in the evaluation and selection of suppliers based on performance data and also in the identification of possible supply chain hazards. This aids in the overall maintenance of a stable and efficient supply base.
  • Development of better supply chain management strategies: Data analytics delivers insights and knowledge to supply chain managers, allowing them to make more informed and strategic decisions and data-driven choices for the supply chain's long-term performance.

How is Supply Chain Analytics Related to Data-Driven Supply Chain Management?

Data-driven supply chain management is a key constituent of supply chain analytics. It refers to the use of analytics techniques and tools for data analysis in order to acquire insights into supply chain operations, performance, and effectiveness. One of the important components of data-driven supply chain management is supply chain analytics, which comprises the gathering, integration, analysis, and interpretation of data to facilitate decision-making and improve supply chain operations.

Supply chain analytics Data-driven supply chain management
Supply chain analytics involves the evaluation of data from multiple sources, supply chain analytics use data-driven techniques such as descriptive, predictive, and prescriptive analytics. In contrast, data-driven supply chain management involves the application of data and analytics to streamline decision-making and optimise supply chain operations holistically in the supply chain.
It relies on insights garnered from historical sales data, transportation data, production data, inventory data, and other data points.  It relies on data-driven aspects like data collection, data governance, data integration, and decision-making based on the insights extracted from data. 
These approaches aid in the identification of trends, connections, and irregularities in data, as well as the generation of insights that may be utilised for decision-making and process improvement. Data-driven supply chain management employs supply chain analytics as a tool to garner data-driven insights and facilitate decision-making. It also includes the integration of larger strategies and techniques of leveraging data to optimise supply chains.


In the dynamic and complex field of supply chain management, supply chain analytics, and data-driven supply chain management enable organisations to use data and analytics to make informed decisions, streamline operations, lower costs, enhance customer satisfaction, and gain a competitive edge. Hence, there is a growing need for experts in supply chain analytics. Firms are increasingly understanding the value of data-driven decision-making in supply chain management. 

Companies in a variety of industries are looking for supply chain analytics experts to help streamline their supply chains and enhance performance. To get started in this career field, you can take up an Operations and Supply Chain Management course offered by Imarticus Learning. 

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