done just that, opting to use cloud-based versions of at least
some of their applications (TMS and business intelligence
programs being the most popular cloud-based choices).
When asked whether this had shortened the payback period, more than half the cloud-based software users— 53
percent, to be exact—replied that it had.
ANALYTICS USE HINDERED BY RESOURCES
In the past year, there’s been considerable buzz about the
potential of business analytics, or business intelligence,
software tools, which help users gain insights into their
operations and parlay those insights into process improvements. To find out how far readers had progressed in
adopting these tools, our survey asked about their use of
four specific types of analytics: descriptive (which detail
what happened in the past and why), predictive (which
foretell what might happen in a supply chain), prescriptive
(which recommend courses of action), and big data analysis (which entails sifting through reams of information for
Despite the hype, only 41 percent of survey respondents
said they were using business intelligence tools right now.
Of the respondents in that subgroup, just over half ( 51 percent) are using descriptive analytics, 43 percent predictive
analytics, and 17 percent prescriptive analytics. Thirty-three percent said they were engaging in big data analysis.
As for where they’re applying these tools, the majority of
analytics users—65 percent—pointed to inventory management. Clearly, companies are struggling with the classic
inventory challenge—determining how low they can go
with respect to stock levels without sacrificing service. The
second most common area was warehousing, cited by 56
percent. With more demands being placed on retailers and
manufacturers, especially in the area of omnichannel commerce, analytics can provide insights into how businesses
can rev up throughput in their DCs. (See Exhibit 2 for the
The flip side, of course, is that the majority of respondents— 59 percent—are not using analytics at all. When
asked why they weren’t, 39 percent of the non-users cited
a lack of staff resources. Another 19 percent said they saw
no value in it. (See Exhibit 3.) That stands in sharp contrast
to the findings of last year’s survey, when “No perceived
value” was the top reason given for not making use of analytics. If the lack of resources has indeed become the biggest
obstacle to the use of analytics, software vendors clearly
have to do more to convince potential clients that it’s a
worthwhile expenditure of time and money.
Given the perennial issue of resources, it’s not surprising
that the biggest companies were the most likely to be using
business analytics. And indeed the top-tier companies—
those with more than $5 billion in annual revenues—had
the highest adoption rate, at 65 percent. The next tier
down—companies with revenues between $1 billion and $5
billion—had the second highest adoption rate, at 54 percent.
Finally, the survey asked readers to name the biggest obstacle they faced to successful software deployment. First on
the list was systems integration, cited by 31 percent. Next
came company culture (defined as employee acceptance
and support), cited by 21 percent. Rounding out the list
were lack of information technology (IT) resources ( 19 percent), lack of good user training ( 10 percent), and absence
of upper management support for software deployments
( 9 percent).
All this suggests that when it comes to future supply
chain software implementations, logistics managers may
want to consider going to the cloud. Not only are cloud-based applications likely to provide a quicker return on
investment than traditional versions do, but they tend to
be user-friendlier as well. And more importantly, perhaps,
they offer users a way around such common hurdles as systems integration and lack of IT support.
Area of respondents using
business analytics tools
Inventory management 65%
Supplier performance 50%
Carrier performance 35%
What are the hot areas for
analytics in the supply chain?
Lack of staff resources 39%
No perceived value 19%
Lack of IT support 14%
No time for more work 12%
Too expensive 11%
Too complicated 5%
What stops companies from
taking advantage of analytics?
WHEN IT COMES TO ANALYTICS IN THE SUPPLY CHAIN, MOST USERS ARE
LOOKING FOR INSIGHTS INTO HOW TO MANAGE THEIR INVENTORY MORE
LACK OF RESOURCES POSES THE BIGGEST HURDLE TO READERS’ ADOPTION
OF ANALYTICS IN THEIR SUPPLY CHAIN OPERATIONS.
James Cooke is a principal analyst with Nucleus Research in Boston, covering
supply chain planning software. He was previously the editor of CSCMP’s Supply
Chain Quarterly and a staff writer for DC VELOCITY.