October 29, 2015

Moneyball Business: Eight Requirements for Supply Chain Analytics if You Want to Win

by Gary Meyers on Oct 29, 2015

The World Series is in full swing (pun intended). A few years back, the film Moneyball showed us how the Oakland As built a super-competitive sports franchise by essentially competing on analytics within the relevant business parameters of a major league baseball franchise.

The noted German doctor, pathologist, biologist and politician, Rudolph Ludwig Karl Virchow called the task of science “to stake out the limits of the knowable.” We can paraphrase Virchow and say that the task of analytics is to enable you to know everything that you can possibly know from your data.

That’s what competing on analytics really means. In Moneyball, Peter Brand (played by Jonah Hill) says:

“It’s about getting things down to one number. Using the stats the way we read them, we’ll find value in players that no one else can see. People are overlooked for a variety of biased reasons and perceived flaws. Age, appearance, personality. Bill James and mathematics cut straight through that. Billy, of the 20,000 notable players for us to consider, I believe that there is a championship team of 25 people that we can afford, because everyone else in baseball undervalues them.”

In an effort to acquire even more knowledge about their products, many companies are building or adopting business analytic tools to help them gain better information about their supply chain. Yet, in many cases, they still only have a fraction of what they should from their enterprise resource planning (ERP) and other systems because they are not able to get an aggregated view across systems.

Can you see if poor order performance is a result of a forecast error or on time in full (OTIF) issues? Can you instantly see what’s inhibiting your revenue, margin and working capital goals across the entire business as a consequence of your supply chain’s performance?

If you answered no or I don’t know to either of these questions, perhaps you need to consider if you are tapping into all the data and getting the visibility you need. With today’s Big Data, cloud and analytics solutions, a Moneyball approach is quicker and easier than in the past, and can be the critical difference between winning and losing. If operational excellence and supply chain visibility are high on your list of priorities, your must-have list for analytics should include the following:

  • Pre-built connectors to your ERP system and other relevant supply chain data sources from a secure, scalable and fast cloud platform for immediate plugin and startup.
  • Fast harmonization across multiple ERP instances and data sources, along with support for external data—including unstructured data.
  • Comprehensive, supply chain-specific metrics that provide the levers for revenue, margin and working capital.
  • Simple, but powerful, self-service configuration beyond out-of-the-box metrics.
  • Root cause analysis that goes beyond the what is happening to the why it is happening.
  • Enterprise-class features such as role-based views, role-based security, single sign on, currency conversion, alerts, data access through standard application program interfaces (APIs) and collaboration.
  • A (nearly) zero learning curve.
  • A continuous stream of new capabilities—such as new supply chain content, features and applications, e.g. what-if scenario analysis, predictive analytics, etc.

With supply chain analytics that meets these criteria, you can expect to see your business on the path to a winning streak. (Go Mets!)

Gary Meyers is the CEO of FusionOps.