Specialization: Operations

Topic: The Importance of Big Data Analytics in Supply

Chain Management

By: Jahnavi Pachisia

(+91 98740-94801)
LinkedIn Address
Shri Ram College of Commerce, Delhi University
B.Com Honors, IIIrd Year
 OPERATIONS:
The Importance of Big Data Analytics in Supply Chain Management

The attributes or characteristics of ‘Big Data’, one of the most frequently used words by companies
worldwide, can be understood by the 5V’s- Volume, Variety, Velocity, Veracity and Value.
Big data analytics is playing an instrumental role in improving supply chain management at strategic,
operational, and managerial levels amongst its various other uses. It resolves several pain points ranging
from identifying ways to reduce the communication gap between manufacturers and suppliers to improving
delivery time. Analytics insights enable decision-makers to achieve operational effectiveness and monitor
performance to improve productivity. It facilitates businesses to decrease costs, make prompt decisions and
develop new products to meet customer’s changing requirements. Big data analytics is providing supplier
networks noteworthy information, great clarity, precision, valuable insights and knowledge, prompting more
context oriented insight shared across supply chains.

The integration of Big Data in the supply chain domain is an important and revolutionary leap. It helps
organizations to analyze the usage patterns and habits of their customers to retain their subscribers and
increase revenue. Big data analytics enables identification of bottlenecks that slow down supply chain
processes. Careful observation of consumer behavior and patterns help businesses to push more of their
best selling products and optimize inventory. Companies make use of algorithms to accurately predict
delivery dates, increase warehouse automation, and optimize routes through advanced mobile technology.
Supply chain managers can trace a product using tag/barcode scanners and attaching a radio frequency
identification device to certain products.

Prominent tools are commonly used in supply chain management using big data/data analysis such as
supply chain control tower technology i.e. central hubs that capture a variety of processes in the supply
chain driven by AI-driven recommendations, and digital twin modeling which duplicates all the processes in
the supply chain down to the minutest one, to increase productivity, reduce costs and get better insight into
the bottlenecks in today’s erratic supply, demand and logistics. Digital twins has been a ground-breaking
tool which facilitates us in managing even unusual risks such as power cuts, weather conditions, and, more
recently, pandemics like COVID-19.

Supply chains began to suffer from product shortages, shipping delays and a significant reduction in the
workforces on factory floors because of social distancing requirements, lockdowns etc in the wake of
COVID-19. Supply chain managers resorted to holding additional inventory or building new regional facilities
to adapt to the situation and improve the efficiency of the process without being able to add much of a
burden on costs given the times.
“With COVID, fewer people were available be it to stand on the inventory floor to see what products were
there, to be part of the warehouse management process, to staff these supply chain processes and so on”.
2020 has been disruptive across industries all over the world. This has meant that businesses have had to
be agile and quick on their feet to adapt to the demands of the modern world. The needs of the global
pandemic caused chaos throughout supply chains. Lockdowns, various restrictions and outbreaks made it
quite tough to rely on a single source be it for raw materials, finished goods and even services Companies
have had to build strategic approaches to supply chain management instantaneously, and big data helped..

1
Nestlé: A Case Study

Nestlé the conglomerate has been leading the F&B industry for more than 150 years. It is one of the few
successful businesses to have a prominent hold of the digital space. The giant has fully capitalized on
disruptive technologies like artificial intelligence, machine learning, advanced data analytics, block chain,
augmented reality, and so on to be able to provide an enhanced and personalized customer experience
along with improving on more business verticals. It is said to have realized the importance of data and
digitalization and began its digital transformation process in 2018, way ahead of its many competitors which
has proved to its advantage.

Nestlé is capitalizing on SAS analytics to enhance accurate demand planning and forecasting, and
minimizing inventory overstocks and supply chain errors. The company has expanded its scope to
predictive analytics and robotics for factory automation and supply chain efficiency. Nestlé increased the
scope of Transport Hub technologies to cover 50% of its Global Logistics Network in 2020. To evaluate
product sourcing and delivery process, the company has also started to utilize AI based tools.

The brand lays great emphasis on one-on-one relationship with its consumers and thus has worked on the
same via tools such as conversational AI, voice assistants, and machine learning and features like
intelligent chat bots, digital nutrition advice, apps, etc which has ensured personalized customer
engagement. The F&B giant uses AI for providing personalized health and wellness solutions, custom
recipes, answer queries, and more.

Nestlé with the expertise of Microsoft Power BI and Azure developed a centralized data warehouse to
develop a reliable data analytics and business intelligence platform with good quality, scalable data. Nestlé
USA partnered with Enterra Solutions as a step towards its AI driven initiatives to make use of these digital
tools and thus enhance business decisions. This collaboration is to gain advanced sales and marketing
insights by automating the decision-making process. Nestlé is gradually integrating AI, data analytics,
machine learning, and so on to optimize the process and flow between suppliers and consumers.

“Whether it is front-end research and development, production or sales, everything must start with data, and
we need to constantly enhance brand innovation around the needs of consumers.” says Lynne Xing,
director of Nestlé China’s ecommerce supply chain operation

Just recently it came up with its very own virtual bot to answer queries regarding their famous Toll House
chocolate chip cookie recipe. The new digital toy named Ruth and commonly known as ‘Cookie Coach’ is a
virtual assistant Of Nestlé USA which makes use of autonomous animation. Hence, over the years, Nestlé
has been successfully steering its digital journey through different methods.