FEATURE When asked about their confidence in the decision, executives told her if they made the assessment with spreadsheets their confidence level would have been 50 percent, but with the software tool and predictive analysis, their confidence hit 90 percent. Karrenbauer suggests predictive analyses can help companies avoid costly outsourcing mistakes. “Outsourcing mistakes occur because people looked at them in isolation,” he says. When a company looks at manufacturing alone and outsources to take advantage of $1 an hour labor, Karrenbauer says it is not looking at the big picture. The labor might cost $1 an hour, but what are the costs of moving goods from an Asian country to the United States?
PUSH PAST THE HOLDUPS In “Deconstructing Supply Chain Analytics,” Gartner reports companies that do a better job of predicting future demand can trim 20 to 30 percent out of their inventory, while increasing fill rate by 3 to 7 percent. These kinds of results can deliver margin improvements of 1 to 2 percent.
Unfortunately, Karrenbauer says there is a battle of wills between humans and algorithms that prevents companies from getting the biggest bang for their Big Data buck. “The prize keeps going up if you can convince people to look at the whole thing,” he says. “But because of internal politics, it never goes anywhere.” He explains the siloed structure of business units within a company makes it difficult to optimize supply chains. He adds companies must thoroughly examine whether their objectives align with the incentives given to individual units and individual employees. Big Data can deliver big results for those companies where all business units are united for the greater good. “You’re not supply chain people if you don’t look at the whole thing—you’re just borrowing the term,” he stresses. “When you have vice presidents for every function with separate financial objectives and bonuses tied to those objectives, then you have fiefdoms and people jealously guarding their fiefdoms.”
Control the chaos. Today’s manufacturing companies often struggle to get visibility into their complex logistics operations. iManage™ is a high value asset tracking solution that monitors and tracks the flow of parts, assemblies, and containers throughout the supply chain. Receive instant alerts when the tracked assets deviate from pre-established routes, or when problems occur. Identify waypoints, dwell times, and use dynamic geo-zone capabilities with directional tracking to improve profits by controlling a dynamic and often hard to manage supply chain. Control the chaos in your supply chain with iManage. To learn more about iManage call 1-877-980-6208 today or visit numerex.com/imanage © 2016 Numerex Corp. All rights reserved. Numerex is a registered mark of Numerex Corp.
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SDCExec.com | March 2016 | SUPPLY & DEMAND CHAIN EXECUTIVE
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