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GT Nexus

Big Data Still Poses Big Questions for Retail Supply Chain
Bryan Nella, GT Nexus

A piece in Practical Ecommerce popped up recently touting "5 Ways Big Data Can Help Retail Supply Chains":

  • Real-time delivery management
  • Improved order picking
  • Better vendor management
  • Automated product sourcing
  • Personalized or segmented supply chain

For example, one suggestion:
Big data analytics solutions enable real-time management by reviewing vendor performance against a set of key performance indicators. These KPIs include vendor profitability, on-time service, and customer feedback and complaints.

Considering that supply chains occur outside the four walls of the organization and much of that data resides externally as well, retailers need as much insight and information as they can get their hands on to make better decisions and improve performance. This makes a lot of sense.

An opinion piece in the July 2nd Wall Street Journal stated, "Big Data Hasn't Changed Everything: Technology has a long way to go in mapping the variables of human life." The opinion piece, written by Philip Delves Broughton, author of "The Art of the Sale: Learning from the Masters about the Business of Life," calls out the risks that come along with big data. According to Broughton:
It's one thing for the NSA's quants or scientists at the Large Hadron Collider or genome sequencers to talk about big data... But it's quite another thing when you start to hear how big data is going to upend everything... Ethics, morality, civil liberties, everything risks being thrown under the big-data bus, unless we are exceedingly careful.

Example? He points to the financial services industry in the 1980's moving to digital exchanges and automated, free-flowing processes that made information faster, easier to consume and more actionable. Boundaries eroded. New opportunities arose. With those trading opportunities, risk became an afterthought. Fast forward 25 years and we know the rest...

What does this mean for big data in retail? Retail is very much a people business – from selling to individual consumers in-store to the other end of the supply chain, where seamstresses toil in factories in Asia creating our garments. Do we want big data deciding what to sell, who to sell to, or what factory to source from, when there's so much more of a personal aspect to the business?

The point made by Broughton is that big data poses big risks if not used the right way. Practical Ecommerce, on the other hand, provides an optimistic outlook on the potential that exists for retailers in leveraging big data. Will there ever become a day when a retail supply chain runs on autopilot, fielding demand signals and auto-filling them with optimal production paths? Unlikely. But envision a day when retail organizations can make well informed data-driven decisions and directly measure the results of these decisions. Executives (real humans) can be empowered with answers to questions such as:

  • Is your supply chain performing to the optimal plan?
  • What is the financial impact of suboptimal performance?
  • Where are the bottlenecks in your supply chain?
  • Are your partners meeting their performance goals?
  • Is data quality good enough to derive meaningful conclusions?

A prerequisite to this means having a reliable data source to begin with. There's an argument being made in the industry today that unless retailers can ensure data accuracy, big data goes nowhere. However, at the same time, if questions exist regarding inventory then you can't begin to determine your accuracy levels. Visibility is the prerequisite to accuracy. With visibility we will then see major growth trends in big data. A lot of this will come from unstructured data, which requires an entirely new level of analytics, especially around predictive support.

The science is changing rapidly and, if done with caution and planning, there is a wide range of adoption opportunities in retail; however, few retailers today have the ability to capture accurate, rich data from their supply chains. This is one of the main reasons why the world of big data and business intelligence is still in its infancy stages for the retail space.

Bryan Nella is Director of Corporate Communications at GT Nexus, the world's largest cloud-based supply chain network. He has more than 12 years of experience distilling complex solutions into simplified concepts within the enterprise software and extra-enterprise software space. Prior to joining GT Nexus, Bryan held numerous positions in the technology practice at global public relations agency Burson-Marsteller, where he delivered media relations and communications services to clients such as SAP. In previous roles he has worked with clients such as IBM, MasterCard and U.S. Trust. Bryan holds a BA in Mass Communications from Iona College and a MS in Management Communications from Manhattanville College.