Some of the most cost-effective software and methods supply chain professionals and the best freight brokers can adopt are supply chain predictive analytics programs. While still relatively new to the supply chain, analytics implementations have skyrocketed in popularity since its birth a little over 10 years ago. According to Supply Chain Dive, “The number of supply chain professionals who say they’re currently using predictive analytics at their company has grown 76% from 2017 to 2019, according to a Supply Chain Dive analysis of the annual MHI Industry Report.” Supply chain predictive analytics is reimagining the supply chain’s future and saving leaders in the industry a lot of money along the way.
What is supply chain predictive analytics
Companies become apprehensive when it comes to newer technology and stepping into new software. It helps to understand the concept of supply chain predictive analytics. Predictive analytics is the process of taking the data gathered from everyday operations and converting it ‘into valuable nuggets of insight.’ Essentially, these “valuable nuggets of insight” create a window into everyday operations. Knowing exactly what’s going on and when it’s going on is the most valuable tool in a supply chain operations arsenal. Supply chain predictive analytics informs users of different issues that likely will occur, where they occur, and when they occur. This allows supply chain professionals to understand errors, and ultimately their application will prevent future errors from happening.
When issues are resolved before they occur, supply chains save money. Some issues include missed shipments, shipment delays, and when dealing with international shipping, withheld shipments. The information supply chain predictive analytics offers creates peace of mind for supply chain professionals and assists in eliminating ongoing supply chain or transportation issues that can become costly over time.
The value of supply chain predictive analytics
Part of successfully implementing supply chain predictive analytics is knowing how to wield these tools properly. And that involves understanding them and knowing how they work. These platforms may become confusing at times, but all team members throughout the supply chain must become fluent in the software available. The information available realizes its true potential through the ability to accurately interpret the information provided. Some of the challenges with the supply chain will and already do accurately predict freight’s future. Supply chain predictive analytics plays an essential role in freight forecasting. Forecasting has become especially crucial and challenging, given the state of the COVID-19 pandemic this year. And leveraging predictive analytics helps companies see the writing on the wall and intervene to repaint it when necessary. Ultimately, using supply chain predictive analytics is essential to driving down excessive spending and supply chain professionals’ costs.
Best practices for using predictive analytics
Logistics companies depend almost entirely on their efficiency and accuracy. Utilizing predictive analytics is the perfect way to draw near to error-free goals. There are many ways that supply chain professionals can adapt and use predictive analytics to their advantage, such as:
- Connect your systems via EDI and API. Doing so creates a more effective flow between software and allows for a more user-friendly experience.
- Leverage IoT-enabled sensors to collect more data. Data collection is imperative to provide an invaluable working relationship between predictive analytics and logistics companies.
- Use autonomous processes to comb through and apply data. Using automatic features, analytics and automated data management eliminate human error and oversight, leading to fewer costly mistakes.
- Use tools that offer predictive freight rates to forecast & conduct RFPs or mini-bids. Predictive freight rates allow freight professionals to see which lanes, markets, and carriers might charge in the future. For example, SONAR’s predictive freight rate tool uses market data and artificial intelligence to forecast spot rates for today, next week, next month, next quarter, six months and a year from now. The predictive trucking rates widget calculates mileage and shows a total with or without a fuel surcharge.
- Automate high-priority items’ notifications to avoid mistakes. This gives users less room for error, especially if it is made known to them.
- Train all team members on how to apply those insights. The ability to properly use automated systems is only as useful as its user-friendliness. Ensure everyone is aware of procedures to provide seamless use and transitions.
- Pay attention to software updates. Technology is ever-changing, so it is vital to make sure software is up to date to keep the most accurate readings.
- Plan, replan and plan again. One rule in the supply chain is absolute; managers must plan according to what data indicates has, is, or may happen. This is key to eliminating any mistakes. Technology is also not accurate 100% of the time, so double-check to make sure nothing slips through the cracks.
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Become a confident, informed freight professional with analytics-driven insights and the right technology. Request a FreightWaves SONAR demo online to get started today with predictive analytics tools.