There is increased pressure on organisations and their executives to make faster, more accurate decisions. Alexandria Rumble looks at the technology enabling this

The days of functional decision making are over and companies are forced to take a more holistic view of supply chain management in order to be able to mitigate risks, improve efficiencies from the stores to the supplier and find new opportunities to release cash. It seems simple enough, so where is the hold-up?

Many organisations have data, but are missing the capabilities required to connect it to day-to-day events. Approaches to intelligence are largely tactical and focused on the analysis of past events. Processes are ad hoc, desktop tools are common, and there is minimal coordination between individuals or departments. The retail supply chain today is so complex that it is virtually impossible to get a holistic view in a meaningful format.

Many software solutions available today provide static data rather than real-time data. When information is available it often takes the form of unfriendly hard copy reports, or it is fed through other applications and ultimately exported to an Excel spreadsheet so that further data manipulation can be done, which will not be connected to next month’s analysis.

The need is simple: one set of data across the value chain, that can be translated into the right picture for each function is linked to a set of key performance indicators (KPIs) that lead all teams’ contributions to a business goal.

It is paramount to understand how each decision in supply chain, marketing, sales or sourcing can impact other parts of the organisation. As an example, many retailers that jumped at the chance to source cheaper products from the Far East have accumulated costs in other areas to manage this extension of the supply chain. With greater extension comes less visibility, less control and greater risk. Air freight bills and increased inventory needed to counteract supply delay or failure are oft-cited negative consequences.

Visibility of cause and effect and trade-off evaluation are becoming a standard way of working and thinking for leading companies. While in the past inventory-related decisions were often driven by the need to improve onshelf availability and service levels or because of operational constraints, today supply chain managers must broaden their discussions to include other parts of the organisation.

As complexities increase, companies are progressing beyond the traditional approach to obtain better visibility and coordination of decision-making. But data issues often hit as retailers look to do more sophisticated and possibly cross-departmental analysis.

The use of intelligence and metrics to manage performance needs to become part of the culture, and companies that have processes in place to adjust execution in response to signals anywhere in the business will be better equipped to succeed in today’s retail turmoil.

Leaders are developing clear operational and performance metrics and relate them back to organisational strategies to drive business activities. Scorecards and dashboards help to track and react to those performance metrics continually and as part of daily tasks, to correct issues that may affect the retailer’s success.

Acknowledging that KPIs drive behaviours and decision-making is instrumental in breaking down operational silos and aligning everyone behind the business objective.

This evolution from the traditional financial or operational picture to a holistic perspective allows the measurement and analysis of activities along the entire retail supply chain and brings visibility of their effect on other parts of the business and ultimately on the bottom line. More specifically KPIs can be connected to support companies in making decisions in full knowledge of the trade-offs they are making. This type of framework allows new levels of modelling to predict the future.