BY THOMAS H. DAVENPORT, THE INTERNATIONAL INSTITUTE FOR ANALYTICS,
AND JERRY O’DWYER, DELOITTE CONSULTING LLP
Tap into the
POWER of
ANALYTICS
New ways of
applying supply
chain analytics can
lead to dramatically
higher levels of
performance. Here’s
where to find the
best opportunities.
Many companies today are aggressively employing analytics—the systematic use of quantitative and statistical decision methods—in their businesses. There are many different application domains for
analytics, ranging from marketing to human resources to finance. It is only
natural, then, that the next generation of supply chains should incorporate a
higher and more sophisticated level of analytics.
Applying analytics in supply chain management is not a new idea. The U.S.
military adopted a variety of logistical models in World War II, and companies
adopted related approaches in the postwar period. UPS, for example, established a logistical analytics group in 1954. Since then, many companies have
successfully employed analytical approaches to distribution networks, inventory optimization, forecasting, demand planning, risk management, and other
applications. Large retailers, such as Wal-Mart Stores and Target, have had considerable success with supply chain analytics, often working in collaboration
with suppliers. And carriers like UPS, FedEx, and Schneider National wouldn’t
