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Big Data Continues to Pose Big Questions for Retail Supply Chains

Guest Blog By Bryan Nella

A piece recently published by Practical Ecommerce discussed 5 Ways Big Data Can Help Retail Supply Chains. According to the article, those are:

  1. Real-time delivery management
  2. Improved order picking
  3. Better vendor management
  4. Automated product sourcing
  5. Personalized or segmented supply chain

For example, one suggestion states, “Big data analytics solutions enable real-time management by reviewing vendor performance against a set of key performance indicators. These KPIs include vendor profitability, on-time service, and customer feedback and complaints.”

Considering that supply chains occur outside the four walls of the organization and much of that data resides externally, as well, retailers need as much insight and information as possible in order to make better decisions and improve performance. This makes a lot of sense.

A second noteworthy read on the topic is the July 2 opinion piece in The Wall Street Journal, Big Data Hasn’t Changed Everything: Technology has a long way to go in mapping the variables of human life.” The piece, written by Philip Delves Broughton, author of “The Art of the Sale: Learning from the Masters about the Business of Life,” notes the risks that come along with big data. Broughton says, “It’s one thing for the NSA’s quants or scientists at the Large Hadron Collider or genome sequencers to talk about big data…. But it’s quite another thing when you start to hear how big data is going to upend everything…. Ethics, morality, civil liberties, everything risks being thrown under the big-data bus, unless we are exceedingly careful.”

As an example, Broughton points to the financial services industry in the 1980s moving to digital exchanges and automated, free-flowing processes that made information faster, easier to consume and more actionable. Boundaries eroded. New opportunities arose. With those trading opportunities, risk became an afterthought. Fast forward 25 years and we know the rest.

So what does this mean for big data in retail? Retail is very much a people business. From selling to individual consumers in-store to the other end of the supply chain, where seamstresses toil in factories in Asia creating our garments. Do we want big data deciding what to sell to who, or what factory to source from, when there’s so much more of a personal aspect to the business?

Broughton makes the point that big data poses big risk if not used the right ways. The article in Practical Ecommerce, on the other hand, provides an optimistic outlook on the potential that exists for retailers in leveraging big data. It’s perhaps unlikely there will ever become a day when a retail supply chain runs on autopilot, fielding demand signals and auto-filling them with optimal production paths. But envision a day when retail organizations can make well informed data-driven decisions and directly measure the results of these decisions. Executives (real humans) can be empowered with answers to questions such as:

  1. Is your supply chain performing to the optimal plan?
  2. What is the financial impact of sub-optimal performance?
  3. Where are the bottlenecks in your supply chain?
  4. Are your partners meeting their performance goals?
  5. Is data quality good enough to derive meaningful conclusions?

A prerequisite to this means have a reliable data source to begin with. There is an argument being made in the industry today that unless retailers can ensure data accuracy, big data goes nowhere. However, at the same time, if questions exist regarding inventory then you cannot begin to determine your accuracy levels. Visibility is the prerequisite to accuracy. With visibility we will then see major growth trends in ‘big data’. A lot of this will come from unstructured data – and this will require an entirely new level of analytics, especially around predictive support.

The science is changing rapidly and, if done with caution and planning, there exists a wide range of adoption opportunities in retail. But few retailers today have the ability to capture accurate, rich data from their supply chains. This is one of the main reasons why the world of big data and business intelligence is still in its infancy stages within the retail sector.

Bryan Nella is Director of Corporate Communications for GT Nexus, the world’s largest cloud-based supply chain network. Nella has more than 12 years of experience distilling complex solutions into simplified concepts within the enterprise software and extra-enterprise software space. To learn more, visit www.gtnexus.com.

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