SupplyChainTalk: Decision making in the supply chain with data-driven analytics

On 26 June 2024, Supply Chain Talk host Alastair Charatan was joined by Fraser Hill, General Manager Digital & Process Transformation, Shell; Nanda Kishore, VP of Sourcing, Evoy; and Ronald Groen, Operations Director, Advantech Europe.

Views on news
Fast-fashion brand PrettyLittleThing (PLT) is facing criticism from customers who have had their accounts with the company deactivated because of the number of times they have returned their purchases. The online retailer, which is part of the Boohoo Group, had come under fire earlier this month after scrapping its free returns policy. Fashion returns may account for 50% of all costs.

Chargin for returns, however, is an increasing trend in the clothes retail sector leveraged to nudge customers to adopt a more responsible and sustainable behaviour. Marketing tools when they incur too high costs should be scrapped, but this may come at the cost of reputational damage and high numbers of disgruntle customers. 

Making decisions about technological investments 
Augmenting decision making through the use of intelligence in order to assist humans is, no doubt, the direction of travel in supply chains. Bad data, however, generates bad insights. If you have gaps in data and customer delivery points aren’t entered into your system in a consistent manner, you won’t operate optimally. Highly regulated sectors such as EV batteries or pharmaceuticals must rely on AI-driven technology to make their supply chains visible.

However, a lot of providers market their solutions as a tool offering multi-supply chain visibility but what in fact they are selling is web scraping services. To achieve full visibility in highly regulated sectors, collaboration within the industry is key. A collaborative approach to supply chain partners can lead to sharing investments, as well as their benefits, which will also speed up the adoption of advanced data technologies. Highly sophisticated companies such as ASML already have tier5 visibility but for less strategic companies in other sectors it’s a rather tall order. 

Before implementing new technology, you need to prove the positive ways in which it’ll affect your P&L and the balance sheet. 

Measuring is easy, but deciding what you’ll measure (KPIs) and how is trickier. Identifying bottlenecks and implementing technology there can bring impressive, measurable results. 

The panel’s advice

• Without good data governance, excellent data models and stewardship of your core business data you won’t be able to leverage data analytics and AI technologies.  
• Before investing in technology, understand your risks. One of the main human rights risk areas for shell, for example, rather surprisingly, comes from coffee.
• If we already had complete multi-tier visibility, there would be no counterfeit items on the global market.
• Avoid justifying your investment AFTER you’ve made it.
• Get your processes and data clean and optimised before making any technological investments.