Importance of analytics in addressing HK supply chain challenges

November 29, 2022 11:34
Photo: Reuters

With the sheer amount of data being generated today, businesses need highly scalable technologies to meet demand in an extremely complex business and trade environment. With supply chain issues continuing to disrupt operations, there’s a concerning amount of essential data holed up in silos or being lost altogether.

Overcoming these obstacles hinges on fostering collaboration across the supply chain ecosystem. Covid-related restrictions in Hong Kong and the Mainland have affected Hong Kong in terms of being an attractive destination as a logistics and transhipment hub as well as created unprecedented blockages in terms of shipments. This is exacerbated by a rise in e-commerce purchases as well. According to research by FedEx, eCommerce’s share of Hong Kong consumer purchases has increased over the last three years with the biggest benefit being the ability to access products cross-borders with a click of a button.

To overcome these challenges, Hong Kong organisations don't just require more talent to plug the gaps but also business intelligence coming from a rich data set and reliable analytics.

Leveraging interconnectivity

As trade networks develop and interconnectivity flourishes, supply chain management is under greater scrutiny as businesses strive to provide higher quality products at the lowest possible cost.

While innovation is the key to unlocking the business potential to take advantage of these opportunities, it intrinsically relies on being data-driven.

When done right, analytics plays a crucial role in this equation, as it essentially enables businesses to delight customers or end-users at the least possible cost. For supply chain managers, this could look like getting more from their value chain faster by allocating resources more efficiently and cost-effectively. Enhanced real-time data, through machine monitoring and decision-making, will mean less downtime and enhanced effectiveness to deliver better customer experiences.

In an integrated business planning environment, data insights can be harnessed quickly and with minimal fuss, regardless of volume, variety or source. This empowers planning over activities of different functional areas of the organisation which includes finance, production and supply chain management.

By improving teams' ability to analyse data sets and present analytical findings in summaries, reports, and visualisations, organisations arm themselves with the ability to analyse customer behaviour, market trends, and business activity. This, in turn, transforms a purchasing organisation from the traditional reactive form to a more forward-looking anticipative function.

However, deeper, more substantial spend analysis relies on integrating data across multiple enterprise resource planning (ERP) and other operational systems. This ensures disciplined category management, delivering a holistic view of spend management. Doing this requires a systematic understanding of where data is produced, how it is classified and how it is used.

Unfortunately, most ERPs used by companies are not configured to provide this kind of data, clouding visibility over business operations and diverting focus from mission-critical functions.

Be strategic to differentiate

Analytics is like a shot in the arm for spend analysis; helping with the development of a "roadmap" that organises commodities based on priority. This is a key competitive differentiator for Hong Kong business, enabling category managers to reduce the risk of supplier dependency, remove supply chain bottlenecks and select a good mix of suppliers to ensure quality and timely delivery.

Investing in best-fit technology is one area where companies in Hong Kong can drive their businesses forward, particularly the computerisation of processes in supply management thus ensuring that data is accurate and available. The availability of the data would be the basis of optimised decisions.

The most important lesson that we have learned is that supply chain management is a dynamic and evolving subject. It cannot be taught, but rather needs to be constantly developed.

This being the case, bringing together data across ERP and supply chain systems is critical to positioning the business for continual improvement and innovation. When businesses are fundamentally data driven, they are primed to make incremental process changes by measuring the impact of the business as it grows and changes.

The financial impact of an improved supply chain will not only make rapid innovation infinitely more realistic and achievable, but it also makes the business more efficient. For instance, a business can expand the ecosystem to increase the accuracy of cost estimation, budgeting, and financial management. Leveraging the right technology to transform supply chain management is, indeed, a powerful strategic enabler; and it is up to Hong Kong businesses to raise their agility and transform or get left behind in the dust.

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Senior Director, Data Services, Asia Pacific and Japan, Rackspace Technology