Data Management in Supply Chain: What it is and Why it Matters

What will happen to your supply chain business if it has no proper data management? Well, a lot can happen, where it won’t even supply enough. Supply chain data management processes hold the power to make or break the entire system and its operations. So its importance is far beyond explanation, proving to be an integral factor in determining the overall operational efficiency of businesses.

This article will help you understand data management in supply chain, its importance, benefits, and everything that you need to know in between.

Experts are predicting that global supply chain management will reach over $30 billion by 2026. Today, almost 52% of supply chain leaders are investing more in advanced IT solutions to stay compliant with stringent data protection laws. The high reliance on AI makes it crucial for effortlessly processing and analysing data, where 91% of manufacturers plan to combine AI technology with supply chain data analytics.

This implies that a well-managed data infrastructure creates a well-operating supply chain business, balancing every facet that is interlinked.

What is Data Management in Supply Chain?

Supply chain data management is the approach of collecting, organising, analysing, and utilising data throughout the supply chain process. From the initial stage of planning to the final phase of returns, data is continuously collected and interpreted. This includes data on raw materials, suppliers, production, logistics, customers, and other related information. Every piece of data needs to be analysed carefully, stored separately, and evaluated as per the business needs to avoid risks and bottlenecks.

Managing such big data in supply chain management needs the right data management practices, which can scale your business to heights you never thought possible.

Importance of Supply Chain Data Management

Since the supply chain involves stages of planning, sourcing, production, distribution, and returns, collecting and analysing data becomes crucial. With each stage having different functionalities, maintaining and interpreting this data separately is essential to avoid getting muddled up. Proper data management not only makes the supply chain processes easier but also leaves a positive impact on the overall business.

How to Manage Data in Supply Chain?

Supply chain data management brings a lot of advantages for the smooth and seamless transition of business functionalities.

Here are the ways in which you can manage data effectively:

·       Data Collection

Collecting data is one thing, and effectively managing it is another. Businesses need to establish a clear data strategy and identify the key data sources. In supply chain, both internal and external sources are used to collect data, such as enterprise resource planning, warehouse management systems, supplier portals, and other related streams. This brings in a more holistic understanding of the business with improved demand forecasting and inventory management.

·       Data Integration

Identifying the right integration tools based on your business’s needs is necessary. Extract, Transform, Load (ETL) tools help to integrate data from various sources. With the help of AI and ML, integration is made more streamlined, automating complex tasks. Interpreting complicated big data in supply chain management is made easier with the help of data virtualisation, making it more user-friendly.

·       Data Governance

Data governance is a great principle for managing data at all stages of its lifecycle. Ensuring the usage of safe, clean, and quality data can improve decision-making capabilities. To guarantee accuracy and verified data usage, regular audits, validation procedures, and data cleansing methods are required. Additionally, empowering employees on data literacy helps to make data-driven decisions.

·       Real-Time Data Analytics

The data analytics in supply chain market is projected to reach $12.5 billion by 2026. By monitoring and managing data, supply chain management data analytics brings in more agility, customer satisfaction, and cost optimisation. IoT sensors, GPS tracking, and cloud-based dashboards help to track logistics, providing instant access to supply chain metrics. By giving real-time insights into the entire functionality, data analytics in supply chain brings greater transparency.

·       Data Privacy and Security

Today, about 60% of supply chain professionals prioritise investing in cybersecurity to prevent data breaches. With the advent of innovative technologies, data privacy and security concerns have gained traction across every industry, where supply chain is no exception. Adhering to compliance with data privacy regulations is important, with robust data protection measures in place. Security measures like encryption, access controls, and multi-factor authentication are integral to protecting sensitive information from unauthorised breaches.

Benefits of Data Management 

Relying on credible data to guide decisions is the need of the hour for supply chain business agility.

• Data-driven decision making in the supply chain enhances operations, reduces costs, and provides a competitive advantage for businesses.
• Data-driven demand planning helps reduce stockouts and overstock, enhancing production planning and supplier coordination.
• Forecasting brings in supply chain resilience and helps businesses to anticipate future demand, enabling efficient resource allocation.
• Regular data audits can help keep data updated and verified, bringing enhanced end-to-end visibility.
• Data warehousing in supply chain management brings greater collaborationby consolidating data from different sources.

Well, what more is needed when you have quality data that is properly managed to meet your business needs?

Final Thoughts

It is seen that only 53% of supply chain leaders possess adequate master data quality, which is the identifiers that provide context about business data. This highlights the significant gap in data access and quality across organisations. The relevance of using clean data is undeniable, but not everyone has access to it. So, what needs to be done?

Future-proofing data by implementing better supply chain data management measures can be the saviour.

So, is the future green?

The adoption of state-of-the-art innovations into the supply chain brings greater responsibility to conduct sustainable data management practices. Incorporating that in supply chain data management is environmentally friendly and a greater means to attract and retain customers globally. A healthy business can always attract more customers and keep moving forward and onward.

Author Bio

Shirley Stark is a passionate writer currently working at InfoCleanse as a Marketing Team Lead. She has hands-on experience in B2B marketing and loves to write blogs and tips, read B2B articles, create business strategies, and travel.

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