How to Leverage Insights with Data Analytics in Supplier Management

What is Data Analytics?

Data analytics on a surface level is really as simple as the name suggests; it is the act of analysing data. Taking a data set of any kind of information, anything you can think of, and analysing it according to one or more key metrics.

This can be anything from looking at an excel spreadsheet to trace any patterns, to utilising the built-in analytical capabilities in the software tools you already have.

We live in a golden age of technology and knowledge. Anything we want to know, we can find out with a click of a button. It can be overwhelming - the pressure to know everything about everything is immense. It can be useful before diving into the depths of data to understand what exactly you want to know from it. This helps you to stay on track.

In a general sense, data analytics is the key to deeper understanding. Knowing the context of the data you are analysing is absolutely key to understanding the significance of the numbers in front of you. For example, if you know that 50% of your suppliers hold a Red Tractor accreditation, looking at the data through an ESG lens, you gain a deeper understanding of where your business sits in that landscape.

The Role of Data Analytics in Supplier Management

If data analytics is the key to deeper understanding, then within supplier management, it is the key to absolute understanding. There is power in being able to look at a data set and pull from it an accurate appraisal of your business: where it is now, where it might go. To be able to make decisions confidently, with the backing of data. To save money by optimising procurement, and mitigate risk with increased overall visibility.

“Data is the key to achieving breakthroughs in supply chain management that the industry once considered impossible.” - Forbes, Transforming the Supply Chain with Data Analytics and Intelligence

Blindness or confusion regarding the state of your affairs when it comes to supplier management is the death of growth. In order to continuously move forward and modernise your strategy, you must embrace the disruption. Burying your head in the sand and hoping for improvement using methods which have not shown success in the past is the strategy of madmen. It will be uncomfortable. That's how you know you are growing.

Facing the issues an increase in data visibility might bring to the surface should be viewed as the opportunity for improvement that it is. Nobody has perfect processes, after all.

ESG Reporting

A major example of data analytics having a relevant application is in its potential to improve your ability to report your ESG scoring. The kinds of data analytics which provide an overview of your business are also the kind of data analytics which can be applied in this area. In supplier management, this naturally falls in the supply chain, generally speaking. If you collect a huge amount of supplier information, or have a large number of suppliers, then having a succinct and intuitive oversight of their ESG scoring will help you understand exactly how it is impacting your own.

This is another example of how data analytics can help drive business decisions in a positive way.

By offering a tool to unlock a deeper understanding of your business landscape - through a myriad of different lenses, not just ESG - then you have the right context to make confident decisions regarding strategy moving forward. If you know your supply base's current carbon output, then you can factor this into decisions regarding how best to meet your own business's carbon reduction targets, as has become the norm.

This is just one example of data analytics benefitting the output of a team. There are as many applications as there are kinds of data to collect, analyse, and report on - potentially infinite.

The Best Method for Analysing Data

“data in procurement helps to identify trends and patterns within procurement activities, that will help you spot opportunities, risks and help to drive value throughout the whole organisation.” - RTInsights,?5 Ways Analytics Are Disrupting Supply Chain Management

It will be no surprise to hear that I fall on the side of software as being the best method for analysing any amount of data in order to produce a useful report. With my background in software development, and as the current MD of a company whose offering is based around providing a streamlined solution for those working in supplier management, it is my sincere belief that the future is digital.

I've watched my team develop a software application which actively improves the working lives of professionals in procurement and around the supply chain. I know it's capabilities, and I'm proud of its benefits.

It's worth the investment in a solution which will improve efficiency and increase visibility. It is valuable to empower your teams with greater insight. You will be better off for having capitalised on the technological boom we are experiencing now, rather than hesitating and risking falling behind as the sector surges on without you.

I am biased, of course. But I come from a place of experience and knowledge.

My honest recommendation?

Adopt, invest, develop - now.