Predictive Supply Chain

 

Predictive analytics is making a big splash in the logistics and supply chain industry. It provides information today on what we should be expecting tomorrow. One can imagine the benefit it applies to companies in retail or simply any company that faces challenges in logistics or supply chain. There are several predictions that can be done and how the supply chain is going to benefit from that.

Predict the demand of your products

Knowing the popularity of each of the products allows you to optimize your warehouse and the cost of your storage. High demand products, which are usually ordered frequently, should be put in the front of the warehouse, so that the time taken to pick and load reduces. On the other hand, products with lower demand which will not be ordered that often and therefore it can be put in the back of your warehouse. Also knowing the approximate demand of each of your products allows you to manage your inventory well. This will prevent over or under stocking.

Predict the demand of your customers.

Predicting the demand of your customers is slightly different from predicting the demand of your products, but it will give you a lot of new opportunities like knowing which customer will order which products on which day. This will give you more time to optimize your transport and one can make better decisions about outsourcing the orders to other parties. It also helps to optimize your human resource schedules. If you know peaks in your work load beforehand, you can choose to keep less people on standby. This reduces the costs and gives people a more predictable working environment.

Predict machine failure

Machine failure can cause part of the supply chain to slow down or stop completely until the problem is fixed. This can lead to severe costs. These days most machines are equipped with various sensors for various measurements such as temperature and voltage. These measurements can be combined with other information about the machine to predict whether the machine will fail. This allows you to schedule maintenance before the machine breaks. It also allows you to stall the maintenance on machines that are unlikely to fail in the near future. This reduces the cost of your operations. This is called predictive maintenance.

Investing in a predictive analytics solution is no longer an option, it has become a necessity to maintain competitiveness with all of the players who already benefit from emerging predictive technologies. Both consumers and organizations continue raising expectations to receive their shipments faster and cheaper. Therefore, those logistics and supply chain businesses that don’t invest in predictive technologies within their operations, might simply not survive in today’s demanding market.

Reference

https://transmetrics.eu/blog/how-predictive-analytics-is-transforming-logistics-and-supply-chain/

https://www.riverlogic.com/blog/supply-chain-predictive-analytics-what-is-it-and-whos-doing-it