Supply chain organizations today are inundated with data, but two key points supply management practitioners need to examine are how critical is valid, accurate, complete and reliable data to their organization and exactly what can solid data analytics provide.

Kay Bello, a procurement and supply process transformation professional, delved into those questions during a workshop Monday at ISM2015, telling attendees: “Data collection will continue to grow in companies, but how will supply management manage all that information?”

Data analytics is important for supply chain management because it enables organizations to make informed decisions in areas such as strategic sourcing and spend analysis as well as help them with risk management, and regulatory and corporate compliance, Bello says.

It also can “harmonize all components of the supply chain,” including demand planning, procurement, operations, finance, logistics and warehouse. He recalls working with a company that had a challenge with what it called “bad data.” After looking into the problem, he found the problem really was the company was not analyzing the data it had.

“It was a matter of operations asking for more pipes for their projects and procurement just kept buying them. They didn’t know the million of dollars of pipes they had in stock,” he says. After getting the right technology to classify and organize inventory, they were able to improve demand planning.

“And now operations works with procurement in advance of a project. Good data analytics around demand planning has allowed for better alignment between operations and supply management,” he explains.

To implement a data analytics transformation, Bello suggests defining the corporate data strategy by asking key stakeholders to address the three Ws:

What data is critical to business and corporate objectives

Why is the data critical to the business

When is the data required and with what frequency.

To make a supply chain analytics transformation work, he says supply management practitioners should allocate sufficient time to planning and strategy development, ensure adequate support from executive management and business units, and allocate adequate funding and resources.