Manufacturers have awakened to the reality that they need to know a lot more about their suppliers: a 2013 report from Supply Chain Insights found that 41 percent of surveyed supply chain professionals cite the ability to get to data on suppliers as the #1 problem they face in 2012.
It makes sense. Economic uncertainty, natural disasters, political and social unrest are all factors with real potential for supply chain disruption. Knowing how a supplier is performing and where they are operating at any given time gives manufacturers an informed perspective that enables them to proactively respond to even the slightest tremor on the backbone of today’s brittle supply chains.
Getting the insight needed, though, isn’t really getting any easier. Fewer and fewer companies are publicly traded, making it more difficult to get real insight into leadership, locations, and financial performance. When it comes to doing business with suppliers in emerging economies, sources such as World Bank or the World Factbook don’t provide much beyond statistics and figures such as taxation, immigration, and legal aspects of doing business in a particular region or country.
Can big data help close the gap on information needed to reduce supplier risk? Supply chain executives think so, according to a 2013 report from Eye for Transport. Two-thirds of survey respondents are evaluating big data initiatives, citing lowering costs and the need for real-time decision making as two of the biggest drivers.
What’s valuable about the unstructured data is the velocity, volume and variety of the information. In many ways, harnessing big data can be like having feet-on-the-street where your suppliers operate. You can learn with lightning speed how a natural disaster may impact operations; whether there’s been a change in leadership or a court action against the company. Having this information arrive on your desktop, in a timely fashion, gives you critical lead time to evaluate options, formulate a strategy and execute with confidence.
You can start small – with the suppliers you already know that may be having problems, or those who are your most critical. Start by asking yourself
- Where am I most vulnerable to disruption?
- Which suppliers are most likely to negatively impact my business if they fail?
- Where should I look for alternatives?
Identify the unstructured – or big – data that can help you sort through those questions and integrate it with the structured, traditional information you already track. Consolidate it in a single source and you will create the deep, complete picture you need to proactively manage suppliers and risk.
Check out this white paper on Supplier Management to learn more.
Photo credit Gorilla Girl (c) 2007