We were catching-up on reading this week and reviewed an article published in CSCMP’s Supply Chain Quarterly printed magazine. (paid subscription or CSCMP professional membership required).  The article was titled, Tap into the power of analytics, and was jointly authored by Thomas H. Davenport, distinguished professor of IT and management at Babson College, and Jerry O’Dwyer, a principle and leader of analytics strategy for the strategy and operations practice at Deloitte Consulting LLP.

I remain a strong fan of professor Davenport’s research in the area of supply chain and business analytics.

The article itself explored new ways of applying supply chain analytics to business performance needs and where to find the best opportunities.  One of the most important insights brought out in this article reflected on the need for improving analytical “literacy” across supply chain teams.  We have heard and read of this same need coming-up more frequently among senior supply chain management teams and wanted to enhance this challenge through this commentary.

In their article, the authors make the observation that several companies have had to considerably upgrade their analytical capabilities of both their IT applications and in the skills of business planning teams.  A quote from one supply chain manager observes that people have to be twice as smart in order to make best leverage of today’s more sophisticated technologies in analytics. Further noted is that individuals need to be either retrained or perhaps moved to other opportunities.  Some companies are providing for in-house sponsored training while outside universities or training organizations are offering new opportunities for deeper analytical skills.

One other concept brought out by the authors to facilitate the understanding of supply chain analytical skills was simpler software applications with narrow functionality. The analogy brought forward is that of a “smartphone-like app” that would support a single decision, and further noted is that some software providers are now beginning to introduce such narrow applications. Examples mentioned are supplier evaluation, inventory performance analysis or transportation analytics.  The authors point out that the way to guarantee the use of analytics in supply chain management is to embed them into supply chain-oriented processes and systems.

Supply Chain Matters would not necessarily agree with the first approach, namely because it places analytics and business intelligence data back into functional stovepipes, rather than into a supply-chain wide information and intelligence repository.  These narrow scope analytics applications may also be the means of some software providers to hang on to customers while not necessarily supporting the broader and more extensive need.  The latter, in our view, reflects the emerging concepts of supply chain control tower like applications or platforms, which we addressed in prediction five of our Supply Chain Matters 2012 Predictions for Global Supply Chains.

Regardless of the systems and technology approach, the reality remains that both supply chain management and planning teams need to consider realistic methods for  deepening individual skills and literacy into leveraging advanced analytics within supply chain business decisions.

We encourage readers to share their own views regarding the growing need for supply chain analytical skills by either adding a Comment to this posting, or responding to our interactive poll question appearing in the right-hand panel. Depending on the volume of responses, we will share the results in an updated commentary.

Bob Ferrari