SEMINAR REPORT BIG DATA IN SUPPLY CHAIN MANAGEMENT.

EDWARD MNANGAT

CM16/57661/22

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Contents
Big data in supply chain....................................................................................................................1
Introduction.........................................................................................................................................1
KEY CONCEPTS OF BIG DATA........................................................................................................3
Types of Big Data..............................................................................................................................3
Characteristics of Big Data................................................................................................................3
Approaches of Big Data Analytics....................................................................................................4
Potential Benefits of Big Data Analytics in Supply Chain Management...........................................6
Challenges Facing Big Data..............................................................................................................7
Contemporary Issues...........................................................................................................................7
Conclusion..........................................................................................................................................13
References..........................................................................................................................................14

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 Big data in supply chain

Introduction

This paper examines the notions regarding the Big data in supply chain in the field of

procurement practices. Big data is larger more complex set of data especially from new data

sources, these data are voluminous in nature that traditional data processing software just

can’t manage them (Tseng et al., 2017). The three types of big data include; structured data,

unstructured data and semi-structured data. Bulk of this data is captured from various

company’s sources such as point of sale, enterprise resource planning, global positioning

system and social media. Big data and its applications have increasingly received interest by

both scholars and practitioners. However, there is still missing evidence regarding how big

data is appreciated as well as its applications in supply chain management (SCM). This topic

is of interest due to the emerging aspects in various fields from global to local supply chain

departments.

Currently, Big Data is certainly the key aspect of competitiveness for enterprises in their

Supply Chains. This is because the data is converted into valuable information to an

organization. The outburst of data captured, accumulated and analyzed is impacting the

value-chain at all levels from manufacturers to customers. This digital transformation is

underway and will certainly follow exponential growth in future

It is a broadly acknowledged fact that almost every research or business revolves around

Data. Data from various business sectors has been increasing each day and the management

of this large amount of data is the biggest professional crunch these days. The concept of Big

Data Analytics is a well-known facet that conveys a feasible solution to decision-makers for

proficiently handling the problems related to massive data. The important role of Big Data

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analytics in the area of Supply Chain Management, Logistics Management, and Inventory

Management is of utmost importance as it optimizes the business operations by analyzing

customer behavior so as to produce products and services to meet the customer’s future

demand.

In Kenya, the logistics industry has greatly adopted the application of data and information

flows which is seen to have dominated in other supply chain management practices for

several decades now, apparently traditional business analytic methods have been applied to

support decision-making. The increasing technologies have adversely enabled supply chains

to capture, manage, and analyze data. The mobile internet, Internet of Things, block chain,

advanced robotics, 3D printing, and Radio Frequency Identification chips are just some of the

technologies that are potentially disrupting the status quo and make supply chain practices

remarkably different.

Having illustrated above how big data in supply chain is an emerging issue, Andy (2020)

defined big data as the embedded technologies with ability to handle high volumes of

diversified data that traditional information technologies are unable to process. 5Vs: volume,

variety, velocity, veracity, and value are the characteristics of big data. (Wamba et al:2015)

This great positive shift in data management has enabled new knowledge discoveries in

business environments. From a SCM perspective, big data can be utilized by various analytic

procedures for descriptive, diagonistic, predictive, and prescriptive purposes that will help

companies make more effective decisions for strategic and operational applications.

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KEY CONCEPTS OF BIG DATA
This chapter introduces the review on the concepts of big data in supply chain management.

It focuses on what has been suggested by various authors and scholars regarding big data

analytics of network facilities providers. It analyzes the types of big data, characteristics of

big data, approaches of big data, potential benefits of big data and challenges facing big data.

Types of Big Data

Structured data; It has a well-defined structure, a consistent order, and is created in such a

manner that a person or a machine can simply access and utilize it. It is typically kept in well-

defined columns as well as databases. Database management systems are an example.

Semi-structured data; It lacks a defined structure and does not adhere to the formal structure

of data models.

Unstructured data; Is a completely new sort of data that does not have a structure and does

not adhere to the formal structural principles of data models. It does not even have a regular

format and is constantly changing. It may however contain data and time-related information

on rare occasions. Audio files and images are two examples.

Characteristics of Big Data

Volume; It characterizes the vast amounts of data stored within the IT infrastructure. (Chen

and Zhang, 2014) This includes unfathomable amounts of data created every second by social

media, mobile phones, vehicles, credit cards, and M2M sensors. Big data deployment often

include data captured in huge volumes of terabytes (TB), petabytes (PB), and Exabyte (EB).

Velocity; Relates to the pace at which data may be generated and sent in load, in real time,

almost in real time, or in streamline formats (Assuncao et al., 2015). When compared to

others velocity is crucial; there is no use in investing so much just to wind up waiting for the

data. As a result, the primary goal of big data is to offer data on demand at a quicker rate.

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Variety; Refers to the fact that data may be created in structured, semi-structured and

unstructured formats from heterogeneous sources, for instance sensors, internet of things

(IOT), mobile devices, social networks (Tan et al., 2015).

Veracity; It emphasizes the necessity of data quality and confidence because many data

sources have an inherent degree of ambiguity and unreliability (e.g. social networking sites)

(Gandomi and Haider, 2015).

Value; Finally, value refers to the process of disclosure of underexploited big data values to

enable decisions (Oracle, 2012). It is not only the amount of data that an organization keeps

or process that it is important, it is the quantity of important, dependable, and trustworthy

data that must be kept, processed, and evaluated in order to get insights.

Approaches of Big Data Analytics

Organizations that adopt big data analytics must be appreciative of the various methods with

which insights are achieved for better decision-making (Erl et al., 2016). Classification of

data is one such criteria that aids understanding of the data. Davenport (2009) argues that all

data needs to be aggregated and ask the following queries: “what has happened? Why it has

happened? What will happen? And how to make the best of it?” These queries are

representative of the four main analytics methods: descriptive, diagnostic, predictive and

prescriptive respectively.

Descriptive analytics is a Big Data Analytic method that gives insights to past or presently

happening data. It summarizes and describes collected data in a manner that gives useful

information to guide future actions (Marcelo, Vicente, Ladeira, & de Oliveira, 2018).

According to Davenport (2009) it asks, “what has happened?” An illustration of descriptive

analytics is to make categorization of customers by their tastes and preferences.

After descriptive analytics, comes diagnostic analytics that attempts to unravel the cause of

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an occurrence. It utilizes past data gauged against any other relevant data to explore

avenues for establishing any identifiable patterns or relationships. It is valuable to firms as

it provides extensive comprehension into a particular problem. Davenport (2009) points

that organizations should gather comprehensive data; failure of which diagnostic analytics

may be pain staking slow as every individual problem would need separate analysis and

detection.

Predictive analytics refer to the determination of the possibility of an event occurring. It

concerns itself with the manipulation of data into substantial and actionable information. It

answers the query, “what will happen?” (Davenport, 2009). Suppose an organization sells

diverse commodities, predictive analytics assist to explore consumers expenditure patterns,

product consumption habits among other behavior to predict accurately what other

product(s) they would buy/consume hence enabling cross selling and in turn improving

profit per customer as well as better customer relationship. Predictive analytics utilizes

sophisticated statistical tools and other empirical techniques to analyze historical and new

data for the prediction of the future (Bonnes, 2014).

Prescriptive analytics, analyses data by way of machine learning, business rules,

mathematical science, simulation algorithm and optimization to not only predict probable

future outcomes but recommends various decision options that best suits the prediction

thereby answering the query “how to make the best of it?” It can be helpful in

determination/ setting of product pricing or even selection of an advertising strategy to

improve income. Davenport (2019) went further to add a sought of „what if‟ analysis that

is referred to as automated analytics. It answers the query, “what if we took the action?”

A taxonomy by NASEM (2017) grouped BDA as per the following stages: descriptive and

exploratory, predictive and prescriptive. Other valid categorizations of BDA include one

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 advanced by Jing, Yan and Pedrycz, (2019) who grouped BDA according to security data

that incorporates machine learning, knowledge-based methods and statistical methods. On

the other hand, Cardinale, Guehis and Rukoz, (2017) described an all-purpose design for

BDA approaches that allows categorization according to the type of database used,

distributed parallel model and data storage layer.

The aforementioned approaches, the well-liked and favored categorization of BDA is the

Davenport‟s BDA classification (Davenport, 2009) because of the assimilation,

systematization and harmony between the methods; therefore, it has been incorporated in the

seminar report. BDA should begin with descriptive analytics to establish what has happened

then to diagnostics analytics to ascertain why it has happened. Predictive analytics should

follow to indicate probable future occurrence and finally prescriptive analytics to aid in the

decision making support as described above.

Potential Benefits of Big Data Analytics in Supply Chain Management

Greater collaboration with the supply chain network; Supply chain managers have access to

a vast amount of data, which can be analyzed through the latest supply chain predictive

analytics tools to streamline the management of complicated supplier networks and enhance

collaboration.

Enhanced inventory management; Big data analysis gives operational mangers an overview

of operations minutes by minutes and identifies bottle necks that slow down supply chain

activities. In addition, consumer trends allow a companies trends to advertise and optimize

their inventory by best-selling items

Better supply chain traceability; Big data analytics tools allow businesses to collect more

accurate product information, helping them keep track of their distribution cycles. For

instance, supply chain managers in the food and beverage industry can use their insights

gathered to determine the occurrence of food spoilage. They can develop strategies to

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distribute their products more efficiently to prevent this outcome.

Enhanced customer experience; Using big data analytics allows you to study varied data

types. A firm can acquire data from various sources, including social media and text from

surveys. This, in turn, helps you evaluate customer feedback more thoroughly and use the

insights gathered to develop a strategy that caters to your audience. Analyzing the supply

chain related data collected and processed through big data analytics tools help businesses

improve their customer experience.

Challenges Facing Big Data

Privacy and security concerns; It might make companies a weaker goal for cyber assailants.

Even huge companies endure significant infringements of data.

Need for technical expertise; Big data requires a great deal of technical expertise and this is

one of the fundamental reasons why big data experts and data scientists belong to the highly

paid and popular information technology. Training current employees or employing large

data expertise can easily significantly increase the costs of a corporation.

Contemporary Issues
The first debated issue highlighted in this paper is that of Amazon and the application of Big

data in its operations from August 29, 2022 by Elma Mrkonjic in her article. Amazon collects

a variety of data from its users, this includes information like names, addresses and purchase

history. Information is also collected on user activity such as browsing habits. Big data

analytics then enables Amazon to provide targeted content and recommendations. Through

the use of predictive analytics, Amazon can anticipate demand and ensure that its shelves are

stocked with the items shoppers are looking for. This gives Amazon a competitive advantage

over brick and mortar retailers who often have to rely on guesswork to make decisions about

inventory. Amazon also uses data to optimize its pricing strategy. It constantly monitors

competitor prices and customer shopping habits so that it can adjust its prices and offer

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shoppers the best possible value. Amazon also uses big data in warehouses and fulfillment

centers. First, a shipment is transported to a destination area without knowing the complete

delivery address.

Report shows that during the shipment to the specific geographical location, this address will

be completed depending on placed orders in the meantime. This optimized distribution

improves the lead time as well as the customer satisfaction and can help to increase sales.

Secondly, Amazon is now trying to match some of the goods while they are already in transit

to a specific geographical location with current customer orders. During the transport, the

goods are added to orders, which have been placed – as expected - by a specific customer in

this area. The motivation is to use the disadvantage of lower-cost transportation for buffering

the speculatively selected items. If one of the items in transit fits to a customer’s demand, the

item will be delivered within a short delivery time. This results in reduced transportation

costs for both, Amazon and the customer. While big data has enabled Amazon to reap

massive benefits it has also faced huge critics due to its role in racial profiling as documented

at December 15, 2022 by Hillier in his article. The Amazon facial recognition software

incorrectly identified 28 members of the US Congress as convicted criminals. While this

highlighted an overall problem with the software, a disproportionate number of those

misidentified were people of color.

The second debated issue highlighted in this paper is that of Safaricom Public Limited

Company in Kenya and its use of big data analytics (Ongoro, 2022). Safaricom Public

Limited Company utilizes big data analytics in product development, customer segmentation,

and precision marketing. Product development entails converting market opportunities into a

product available for sale. While most firms are facing challenges regarding in the new

product development process due to dynamic customer needs and intense competition,

Safaricom utilizes big data analytics in acquisition of voluminous data from various sources

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such as social media which will facilitate the new product development process and hence the

competitive advantage of the firm through identification of new potential customers and

development of customer tailored products. Also through big data the firm is able to set up

cross-functional teams which can work both independently and concurrently thus making the

new product development faster. Additionally, through acquisition of big data from customer

interaction channels, the organization incorporates customer feedback early in the

development process and post launch of new products thereby lowering research costs as well

as development costs and fostering customer innovation.

Safaricom utilizes big data in segmentation of customers based on characteristics such as

high voice usage, low SMS and low data, or low voice, high SMS and low data or low voice,

low SMS and high data usage. Identifying these segments and their needs helps enables the

firm to offer personalized services to each segment. This also includes differential pricing.

Traditional advertising and marketing approaches no longer suffice in the accurate

identification of potential customers. This is the major reason why Safaricom PLC adopts big

data analytics in precision marketing. Precision marketing entails setting goals, collecting

data from all the customers, customer segmentation and execution of plans through direct

messages, promotions and campaigns which are focused on reaching the most profitable

customers. Application of big data analytics to precision marketing enables Safaricom to

remodel its marketing activities to meet the needs of a narrow customer segment thus

resulting in positive business outcomes.

While there are proponents who advocate for the adoption of big data as covered in the

Safaricom case study above there are also critics of big data. One of the main issues raised is

the lack of transparency. Big data analytics collects tons of information about customers

raising privacy concerns about who can be able to see the information. Unauthorized access

to the personal details of customers on social media sites could be used by firms as a weapon

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to maximize profits. Critics of big data argue that when companies gain insight on their

customers they are able to utilize that information to manipulate customers or spread

misinformation. With the advanced level of profiling that analysts can do with big data, it is

easy to see what customers want and use that information to the company’s advantage. Firms

can use big data as a booster for more manipulative marketing strategies to trick customers

for a long time as it allows companies to analyze customer data at higher speeds and with

more efficiency than before. An example is the case of insurance providers and credit card

companies. Big data allows these companies to make ever more refined predictions about the

future such that if you have ever had an accident you will be charged higher premiums.

In the local context, it has emerged that the Kenya Trade Network Agency, Ken Trade, has

pumped KES 90 million in a business intelligence tool as it looks forward to collecting big

data on Kenya’s import and export trade as presented by Ken Abuya article of July 3, 2022.

The said tool is key to facilitating ease of trade in the country via the extraction and

evaluation of real-time data to help trade facilitators as well as government agencies, make

important and data driven decisions.

The current debate is also on Kenya Revenue Authority as documented at 12 th May, 2022 by

Richard Kamau in his article. The authority is planning to set up a forensic lab which will

allow the taxman to mine data including hidden accounts and records from Kenyan tax payers

computers and mobile phones to detect tax and financial fraud. This will require sophisticated

data acquisition, mining, analytics, and storage tools in order to reconstruct the transactions

and provide insights into complex crimes. While this move will enable the tax man to collect

more revenue there is a risk that this data may be misused by the state as it was in the case of

the Chinese government. In an article dated 15th December, 2022 by Hillier, the Chinese

government uses Big data to profile its citizens. In their social credit system, those that pay

bills on time or undertake charitable activities are given credit that can be exchanged for

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luxuries like first class tickets. Meanwhile those with unpaid debts could receive

disincentives such as slower internet connections or reduced access to private education.

Big data also plays a big part in the misinformation and spread of fake news that has

characterized public debate for the last half decade. Organizations with ill intent can use big

data to target ads or fake news that aims to influence our ideas, beliefs and even who we vote

for. The reason why fake news is really successful is because it is well targeted and preys on

people’s fears, all of which can be tracked from big data. Cambridge analytica firm has in the

past been accused of using information illegally gathered from facebook to inform

communication strategies for interested contestants in an election. This ultimately interferes

with elections in a country as it illegally gives one candidate an edge over the other.

Big data in supply chain management has been a contemporary issue influencing the

procurement practices on organizational performance in public tea factories in Kenya

especially in Kenya Tea Development Agency and Nyayo Tea Zones Development

Corporation where the big data systems have been employed. The big data technology in this

corporation have been argued to aid the firm in sorting the huge volume of information for

further processes, this culture of data in Nyayo Tea Zones Development Corporation has been

understood as the development of skills and knowledge related to the use of data as it is

increasingly linked to the way in which this tea company identify their partners for the supply

of raw materials and the distribution of products.

According to international trade administration, Kenya’s ICT sector accounts for 7 percent of

the country’s gross domestic product through it enabled services. In April 2022, the

government launched its ten-year digital master plan 2022-2032 to align with the global

technological advancements and enhance the rise of Kenya’s digital economy. The digital

masterplan entails digital infrastructure, digital services and data management, digital skills

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and driving digital innovation for entrepreneurship. The Government of Kenya (GOK) has

invested heavily in the broadband sector. There are currently four undersea fiber optic cables

that land off the coast of Kenya: SEACOM, TEAMS, EASSY, and LION2, which are the

core drivers of the heavy fixed internet penetration in the country making it one of the

highest, fastest, and most reliable in the region in the procurement and other dominant sector.

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Conclusion
This seminar report has highlighted that in today’s competitive environment, supply chain

professionals are struggling in handling the huge data in order to reach integrated, efficient,

effective, and agile supply chain. Hence, strongly recommend this technology to supply chain

management and other inclusive firms because as dully illustrated in this seminar report,

explosive growth in volume and different types of data throughout the supply chain has

created the need to develop technologies that can intelligently and rapidly analyze large

volume of data. Big data analytics capability (BDA) is evident as one of the best techniques,

which can help organizations to overcome their problem. Big data analytics provides a tool

for extracting valuable patterns and information in large volume of data.

The report also established that the adoption of BDA brings about streamlined operations

in the supply chain performance has it has been fully adopted and implemented, this will in

turn enable supply chain organization to make robust decisions that will foresee an

improvement in their product service delivery. Getting accurate information right from the

buyers purchasing behavior will make supply chain organization to know what exactly they

are required to produce to the market and what particular time is needed.

The adoption of big data analytics in supply chain organizations in Kenya has not been

taken into proper consideration. Its high time that supply chain organization to make a step

and embrace the new wave in the market so as to be able to maintain their competiveness

not only locally but also globally. Supply chain organization should move from a mere data

management function to a data mining aspect where they are able to analyze all

information in the value chain which will in turn enhances effective decision making.

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 While there exists critisms about big data its benefits far much outweigh its disadvantages.

Care has to be taken to ensure privacy of data.

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