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December 21, 2021

How can business intelligence optimize supply chains?


Artur Haponik

CEO & Co-Founder

Reading time:

6 minutes

The Aberdeen Group conducted a research study on the importance of visibility in supply chain operations. In the survey[1] involving 149 companies, 63% of the respondents indicated supply chain visibility as a key factor in business success. Supply chain visibility is the ability to track and monitor products in transit from the suppliers to end customers. The key feature of a high visibility supply chain is the capacity to determine the overall status of the logistics constituents and the ability to collect further data insights.

This is where business intelligence in the supply chain comes in. A business intelligence tool is required to streamline the collection, aggregation, and evaluation of information spanning an entire supply chain management. Read on as we keep you in the loop on how business intelligence can be used to optimize the supply chain.

supply chain data

What is a supply chain?

A supply chain refers to all aspects of a business’s internal processes such as procurement, transportation, human resource, and inventory management. All these aspects require seamless coordination. Thus, it is akin to the wheels of a car. If one of them fails, the car cannot move.

Inefficiencies in supply chain management often lead to unending challenges, such as:

  • Incapacity to satisfy demand
  • Reduced inventory
  • Less adaptability to market fluctuations
  • Poor fiscal performance

Apart from structured workflows, supply chain management needs the uninterrupted sharing of data insights among all stakeholders.

What is business intelligence, and how does it relate to supply chain data?

Business intelligence is the transformation of vast amounts of data into meaningful information that can be used to facilitate informed decision-making in the business sphere. There is a sea of data to gather and track across a supply network, including logistics expenses, repair expenses, maintenance trends, and key performance indicators (KPIs) on suppliers and carriers.

When a company is able to shed light on the meaning behind its data, it can operate more efficiently, improve revenues, and achieve customer satisfaction via timely delivery of high-quality products.

supply chain data

Supply Chain data can be collected from internal applications, outside applications controlled by external partners, or benchmark data available across the internet. Irrespective of the data source, business intelligence can help gather and convert it into relevant, useful, and readily accessible information by all supply chain partners.

Read more about What is Business Intelligence? 

Applications of business intelligence in supply chain management

Supplier/vendor coordination

In order to satisfy customer demand and improve the order cycle, there must be better communication between suppliers and vendors. Business Intelligence in supply chain management makes use of Enterprise Resource Planning (ERP)[2].

This type of software ties together multiple internal processes in logistics operations and allows sharing of information amongst them. For example, all the business data and workflow is integrated into a single channel that automates communication between different supply chain partners.

Other advantages of ERP in Business Intelligence include:

  • Reduction in mismatches in product quantities
  • Time delivery of goods or services
  • Gets rid of the challenge of excess stock
  • Sheds light across all logistics operations


It might be interesting for you: How Business Intelligence Software Can Help Managers?

Demand and predictive forecasting

Failure to incorporate predictive analysis into your supply chain may see you struggle to adapt to the constantly changing consumer demand. If you’re unable to grasp changing trends in the market, then you won’t be in a position to control production and delivery. This, in turn, will lower your profit margins.

Business intelligence forecasts consumer demand via predictive analysis. You can easily manage your inventory when you have better knowledge of market demand trends. You’re also able to achieve high levels of customer satisfaction and cement your position in the marketplace.

Packaging evaluation

You might have a good product. However, you still need to optimize your packaging. For one, customers don’t like bulky packaging. Secondly, dimensional weight affects shipping costs. Therefore, you’ll need to reduce a few inches here and there by using the right box sizes.

Business intelligence can provide correct weight measurements and dimensions for your supply chain. Ultimately, this may help you cut packaging and shipping costs.

packaging system

Distribution and communication

Business intelligence can narrow down shipping distributions up to the city level. So if you’re wondering where to set up your next distribution facility, you can always use business intelligence tools to analyze data and pinpoint the most strategic spot. This will help you increase service levels to where the demand is.

Distribution is not only limited to moving goods from point A to B. It involves a lot of things, including inventory management, proper packaging, warehousing, and logistics. Logistics is an integral aspect of distribution and affects how efficiently a supply chain fulfills product orders. Overseeing the product journey from the warehouse to its final destination is crucial in logistics.

With business intelligence, you can track and monitor shipment orders. This means that customers can get real-time updates on the statuses of their product orders which helps improve customer satisfaction.

Unlike past years, supply chain transparency today attracts the attention of senior-level managers in different companies. The reasons for this growing interest are clear: Corporations are facing increasing pressure from consumers, governments, and NGOs to reveal further information regarding their supply chains. Failing to abide by these demands may lead to high reputation costs.

A research study[3] conducted by MIT Sloan School of Management reveals that consumers are prepared to pay between 2% to 10% more for goods from companies that exhibit greater logistic network transparency. The discerning customers are looking for details on product materials and ingredients, the source or origin of the products, as well as the conditions in which they were manufactured.

Business intelligence helps map the entire supply chain management, allowing companies to visualize products’ flow across the system. Armed with actionable data, companies can decide how to engage their clients and the level of disclosure they wish to establish.

Final Thoughts

The adoption of business intelligence in the supply chain can only mean one thing: providing actionable data insights to senior decision-makers. Ultimately, this leads to informed decision-making and improvement in the company’s bottom line. If you want to find out how business intelligence services can improve your company’s operations–feel free to drop us a line! BI is one of our areas of expertise. We will gladly help you make the most of your data.


[1] Supply Chain Visibility Aberdeen Report. URL: Accessed 15 December, 2021
[2] What is ERP. URL:  Accessed 15 December, 2021
[3] URL: Accessed 15 December, 2021


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