Ten Ways Big Data Is Revolutionizing Supply Chain Management

Bottom line: Big data is providing supplier networks with greater data accuracy, clarity, and insights, leading to more contextual intelligence shared across supply chains.

Forward-thinking manufacturers are orchestrating 80% or more of their supplier network activity outside their four walls, using big data and cloud-based technologies to get beyond the constraints of legacy Enterprise Resource Planning (ERP) and Supply Chain Management (SCM) systems. For manufacturers whose business models are based on rapid product lifecycles and speed, legacy ERP systems are a bottleneck.  Designed for delivering order, shipment and transactional data, these systems aren’t capable of scaling to meet the challenges supply chains face today.

Choosing to compete on accuracy, speed and quality forces supplier networks to get to a level of contextual intelligence not possible with legacy ERP and SCM systems. While many companies today haven’t yet adopted big data into their supply chain operations, these ten factors taken together will be the catalyst that get many moving on their journey.

The ten ways big data is revolutionizing supply chain management include:

  • The scale, scope and depth of data supply chains are generating today is accelerating, providing ample data sets to drive contextual intelligence. Source: Big Data Analytics in Supply Chain Management: Trends and Related Research. Presented at 6th International Conference on Operations and Supply Chain Management, Bali, 2014
  • Enabling more complex supplier networks that focus on knowledge sharing and collaboration as the value-add over just completing transactions.  Big data is revolutionizing how supplier networks form, grow, proliferate into new markets and mature over time.
  • Big data and advanced analytics are being integrated into optimization tools, demand forecasting, integrated business planning and supplier collaboration & risk analytics at a quickening pace. These are the top four supply chain capabilities that Delotte found are currently in use form their recent study, Supply Chain Talent of the Future Findings from the 3rd Annual Supply Chain Survey (free, no opt-in). Control tower analytics and visualization are also on the roadmaps of supply chain teams currently running big data pilots.
  • 64% of supply chain executives consider big data analytics a disruptive and important technology, setting the foundation for long-term change management in their organizations.
  • Using geoanalytics based on big data to merge and optimize delivery networks.
  • Big data is having an impact on organizations’ reaction time to supply chain issues (41%), increased supply chain efficiency of 10% or greater (36%), and greater integration across the supply chain (36%). The Big Data Analytics in Supply Chain: Hype or Here to Stay? Accenture Global Operations Megatrends Study found that companies are achieving significant results using big data analytics to improve supply chain performance and gain greater contextual intelligence.
  • Embedding big data analytics in operations leads to a 4.25x improvement in order-to-cycle delivery times, and a 2.6x improvement in supply chain efficiency of 10% or greater.
  • Greater contextual intelligence of how supply chain tactics, strategies and operations are influencing financial objectives.
    • Traceability and recalls are by nature data-intensive, making big data’s contribution potentially significant. Big data has the potential to provide improved traceability performance and reduce the thousands of hours lost just trying to access, integrate and manage product databases that provide data on where products are in the field needing to be recalled or retrofitted.
    • Increasing supplier quality from supplier audit to inbound inspection and final assembly with big data. IBM has developed a quality early-warning system that detects and then defines a prioritization framework that isolates quality problem faster than more traditional methods, including Statistical Process Control (SPC). The early-warning system is deployed upstream of suppliers and extends out to products in the field.

When and When Not To Deviate From Standards

Yes, we wrote an article before on deviating from EDI Standards. Our conclusion was that in-place EDI Standards, coupled with adequate “Trading Partner Conventions” are a very strong and robust set of tools. The Standards are “bigger than a bread box” and hold the possibility of solving any trading partner issues that arise. But this article is DIFFERENT. For simplicity, let’s call it more TECHNICAL.

When two trading partners agree to send each other electronic documents. They begin by describing what EDI documents they will exchange and how the documents will flow. They should also exchange EDI specification documents.  EDI usage or specification documents describe what fields and what segments a trading partner will send or expect to convey the information necessary to complete a transaction.  It doesn’t matter if we are ordering widgets, or invoicing, or transmitting catalog data, or checking insurance claims eligibility, the EDI needs to contain the data that the two parties need to communicate.  To explain this, and document it to that both trading partners know what is expected, we must create an EDI usage specification. Let’s use the most popular term: Trading Partner Convention. There is no “law” that says what this like. It could a typed document or a “file” (which we will explain later).

So what is required? What is optional? Best description comes from EDI guru Harold DeWayne: “It’s been my experience that (M)andatory is used to mean the X12 standards demand it (and therefore also commercial translators)… (R)equired has been used more by the trading partner to mean that WE REQUIRE it for our own use”

EDI Specifications
In the larger sense, the EDI specification is the set of rules that define each document type, the segments they contain, and the size and type of data in the elements.  When we talk about the EDI Standard Specification, we are talking about the whole set of valid EDI document types.  If something is valid EDI, then it complies with the EDI Standard Specification.  However, this large, all encompassing specification is not useful in coordinating the exchange of documents between two trading partners.

Fascinating Montreal Transit Projects

Known as CDPQ Infra, the new operational unit will evaluate a transit system on the new Champlain Bridge as well as one that would link downtown Montreal to the Montreal-Trudeau International Airport and the West Island, officials from the Caisse said in a press release.

Following an agreement between the Caisse and the Quebec government, an executive committee will be established to ensure coordination between the new subsidiary and the provincial government for the planning and construction phases of these projects, should they go forward after the evaluation process.

Once preliminary analyses and project definitions are completed, CDPQ Infra will conduct ongoing consultations with stakeholders.

Michael Sabia, the Caisse’s current president and chief executive officer, will chair the new subsidiary’s board. The agency’s Executive Vice President Christian Dube and Senior Vice President of Infrastructure Macky Tall also will serve on the board.

Tall will also serve as president and managing director of CDQP Infra. Two international experts will complete the five-member board.

Why young professionals plan to keep working on the railroad

Elizabeth Hutchison was living in Chicago employed in corporate communications in heavy manufacturing when she learned about an opportunity doing similar work for Union Pacific Railroad. It was a no-brainer for this Millennial to make the move to Omaha as a UP senior communications manager nearly six years ago, but not because she was a native Nebraskan.

“The appeal to me was the opportunity to work for Union Pacific,” she says. “Rail is such a critical industry.”

Elizabeth Hutchison
Elizabeth Hutchison

Hutchison also appreciates the security of working in a 150-year-old industry, as well as the diverse experience it offers.

“You can’t be siloed here,” she explains. “You work with people across the railroad. We’re in 23 states. The big machine that is the rail industry is fascinating.”

Career stability matters. Hutchison’s reasons for not only choosing but staying with a career in rail are echoed by many of her generation working for Class Is in non-agreement positions. Scott St. Clair, manager of strategic planning at Norfolk Southern Corp., came to the railroad five years ago right after graduating from college. He wasn’t recruited — he sought out NS.

“I was familiar with the company growing up. Rail is a strong industry, and it’s really safe,” he says. “The railroads felt the effects of the economic downturn, but it’s an industry people rely on.”

In other words, railroads aren’t going anywhere, and neither are Hutchison and St. Clair.

While Generation Xers grew up during a time when company hopping was the norm, Millennials watched their parents struggle through a recession, losing jobs, houses, savings. The result? Even among those working in information technology, the drive to find a solid employer with lots of opportunities for growth within a single company is strong.

of planning and strategy in CN’s IT department, signed on with the railroad in 2003 after serving the road for several years as a consultant.

“I was absolutely amazed by the amount of projects going on and the company’s drive to improve,” he says. “And every two years, I’ve had an opportunity for a new job.”

One reason: For the past several years, railroad hiring managers have been on the prowl for new talent. A decade ago, looming retirements, normal attrition and traffic growth at North American railroads prompted H.R. execs to convince management to put talent recruitment and retention at a premium.

“In 2005, 75 percent of our employees were baby boomers,” says Diana Sorfleet, vice president and chief human relations officer at CSX Transportation. “Now, we’re about a third Millennials, a third Gen Xers, and a third baby boomers.”

At the end of 2014, Class Is had 8,000 more employees than a year earlier, and railroads plan to hire another 15,000 this year, according to the Association of American Railroads (AAR). And contrary to popular belief, rail is competing well with other Fortune 500 industries when it comes to compensation and benefits, according to AAR. The average railroad employee’s annual salary is $109,000.

“Railroads have historically hired every 20 to 30 years, but we’re now focused on constantly refreshing our workforce to maintain a balance of age and tenure,” says Sorfleet, adding that CSX’s attrition rate the last 10 years has been around 10 percent.

Meanwhile, retention rates are strong. At NS, retention stands at about 90 percent for non-agreement employees who go through the company’s management trainee program, a comprehensive 12-month training that exposes new non-agreement employees to the whole of the railroad while also giving them an opportunity to grow a professional network, says NS Manager of College Recruiting Patrick Rickard.

“We set them up to succeed early in their careers,” he adds. “Colleges are aware of this. And we provide salary and promotions based on performance.”