With the sheer amount of raw information available to businesses regarding their manufacturing and distribution, it can be tricky for companies to filter out meaningful data in order to improve their decision-making abilities. Therefore, companies are now turning to more sophisticated data analytics and business intelligence software to optimize their supply chains and see an increase in their ROI.
Today, analytics options are divided into three major types.
The first is the descriptive analytics that we have been aware of for ages. Manufacturers and distributors are all familiar with terms like data mining, data mart, data warehouse and business intelligence. Most of business analytics are considered descriptive as they help us see what happened in the past. These things can include number of items manufactured, shipment volumes, delay and losses and more but only information that has happened in the past.
For example, it can tell us that 50 shipments of toys have been lost between two ports every September to December for the past three years.
However, it gives us no insight into what will or should happen in the future, which is infinitely more important than what happened in the past.
This is where we come to predictive and prescriptive analytics.
With predictive analysis, you can understand what might happen in the future based on what happened in the past. This analytics help you predict a likely outcome in the future. However, it is important to understand that no algorithm can predict with 100% certainty; the foundation of predictive analysis is based on probability.
These analytics use the historical data in your CRM, ERP, POS, HR, and other business intelligence software to identify trends and then apply stats and algorithms to fill in the blanks about what would happen next in case of the same or different variables.
With predictive analytics, you can forecast how much items will need to be manufactured, trends in sales and distribution activities, customer purchasing patterns, and more.
Looking at our first example, predictive analysis can help us determine that since 50 shipments of toys have been damaged between two ports between September and December for the past three years, the company might suffer the same losses in the upcoming fall season.
Hence, it gives us valuable data on what might happen in the future. But how can we prevent this from happening?
Prescriptive analytics can give you the answer to this:
Prescriptive analytics is what helps companies determine what needs to be done to get the optimal outcomes for their processes. This type of analytics prescribes a company a number of different possible courses of actions that can help them get optimal solutions.
These analytics basically predict multiple futures and allow the company to determine which action or combination of actions can help them get the desired results.
Predictive analytics use a complex combination of tools, algorithms, business rules, computational modeling processes and business intelligence software to be applied to different data sets like historical data, real-time data, and big data.
As you can probably guess, prescriptive analytics is quite complex and most companies do not use them for their everyday processes. However, when prescriptive analytics are implemented in the right way, it can have a major impact on a business’s decision making and its ROI.
Big companies use this model of analytics to optimize their manufacturing processes, maintaining inventory, scheduling distribution and performing other steps of the supply chain process to ensure they are making and delivering the right products at the right time to optimize the customer experience.
At CloudCafe Technologies, we can offer you state-of-the-art IT and business intelligence solutions, including the Skorboard BI, which can have a measurable impact on your business. We have both local and offshore software development teams that can come up with the right ecommerce and supply chain package to enhance the effectiveness and efficiencies of your business.
About Cloudcafe Technologies
Cloudcafe Technologies is the eCommerce evolution of Aurora Digital which was established in 1998 by Sanjeev Srivastava. Bringing together talent, creativity, and foresight, Cloudcafe utilizes local and offshore development teams to deliver end-to-end solutions. By leveraging high-end technical consulting, custom software development and our own software, we provide more insight and achieve an all-around better customer experience for our clients.