If I Get It, Can I Use It?
Perhaps the major issue for professionals seeking to use real-time data in their supply chain decision processes is how to convert real-time data into real-time information. As we noted earlier, current supply chain software applications, other than visibility, are not well equipped to manage much real-time data. Further, management processes and the people that operate them are not prepared to handle more frequent data feeds.
Given this background, what can we say about how real-time data can become real-time information to help you better manage your company?
Start by understanding where real-time data can most help your supply chain. If it is in customer satisfaction tracking, why not begin with a pilot program monitoring shipments to key customers. Assuming you have access to real-time delivery performance data, begin by monitoring arrivals at distribution centers so you understand where issues may be arising and why.
You may be able to use visibility software from your current enterprise software package and assign a team member to analyze the data on a part time basis. Have them report to a broader team, including sales & marketing people, weekly on what they found and whether the results are useful information.
When you have enough information that you can trust and believe that you want to continue the process, you can also preview the analysis with your customer and see if they find the new data valuable and if it saves your company money. If so, only then should you consider making the process part of your ongoing supply chain management structure.
How Can I Solve the Bad Data Problem?
Real-time data can yield real-time problems, but not always real ones. Huh? A recent study of IT professionals by Netuitive, a real time analysis software company, found that 41 percent of respondents in large companies receive more than 100 alerts per day, of which half or more are false positives. Many companies have responded by increasing alert thresholds above optimum levels to avoid excessive alerting or have turned off their alerting functionality completely.
We can probably expect the same results from use of real-time data, as opposed to real-time information, in supply chain settings. Processes for ensuring that real time data is correct and requires action are difficult to develop without employing business process rules engines.
Will Real-Time Data Improve Forecasting and Planning?
Enterprise software providers, plus some smaller vendors, are just beginning to introduce supply chain applications that can take advantage of real-time data. It is still too early to project the longer term implications of real-time data on supply chain management. Some early experiments, like the Cisco case study below, have produced less than stellar, even troublesome, results. Significant research remains to be done into how optimization algorithms should incorporate real-time data. Overall, the future looks cautiously bright, but there is a lot of work left to do before real-time data becomes a standard tool in supply chain management processes.
Can More Data Lead to Poorer Decisions?
A recent study (cited in CIO Magazine) by researchers at Georgia Tech and the University of North Carolina evaluated whether increasing the frequency of real-time data updates would "enhance performance" in companies. Specifically, they wondered whether people would be able to respond more quickly to changes in their environment and result in better decisions and actions. The conclusion was that "managers who received more frequent data points were making poorer decisions". The issue was being able to distinguish random from systemic problems and not react to every issue as if it were a real problem that needed instant resolution.
Next week, we will examine some innovative uses for real time data in marketing and supply chain operations.
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