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Business intelligence in supply chain management

Business intelligence in supply chain management

Supply chains are beneath continuous pressure. They must meet more complex demands and adapt to and respond appropriately to the world’s many numerous disruptions and uncertainties. That presents many different challenges but also opportunities. Intelligent supply chain management can push growth via new client affairs and profitability in challenging economic periods. Therefore, building a fast and efficient customer-centric supply chain is essential. However, we cannot achieve this without using business intelligence solutions.

Business intelligence (BI) solutions have come a significantly long way. BI was a data warehouse managed by specialists who produced custom reports for business users in the early days. Today, BI represents almost entirely self-service and diverse systems that integrate and normalize information from multiple sources, processing it efficiently in real-time. As a result, BI solutions provide businesses with vital information at various levels of management. For example, since business intelligence found its way into logistics, it isn’t easy to imagine an effective supply chain management (SCM) without using BI systems.

Business intelligence – quick definition

Business intelligence guides the technologies, apps, and procedures for managing, combining, analyzing, and explaining information. The goal of BI is to sustain more profitable industries and critical decision-making. Therefore, BI systems are named data-driven decision support systems. Today, companies rely on business intelligence software to identify and extract valuable information from large amounts of stored data. These tools enable the extraction of information such as competitive intelligence and market trends and information such as finding reasons for missed opportunities.

How do business intelligence systems function?

The sources from which companies extract data about supply chain management can be many: customer relationship management (CRM) systems, supply chain information, dashboards, marketing analytics, call center data, etc. Business intelligence applications help companies combine all these sources into a unified view.

While business intelligence does not give users guidance on what decisions to make, what to do, or what will happen if they follow a particular course, business intelligence is also not limited to reporting. On the contrary, business intelligence provides employees with a way to explore business data, understand market trends, and gain insights to advance all business sectors of their company. Furthermore, BI systems can assist businesses in identifying market tendencies and detecting business issues that ought to be managed. Potential business intelligence use cases go far beyond typical business performance metrics, which perfectly represents the possible uses of BI systems in supply chain management.

Improve your supply chain management effectively with business intelligence

The most fundamental challenge in supply chain management for today’s technology companies is the demand for speed and the importance of process and systems integration. When the supply chain drives smoothly, clients’ needs are held in harmony with retailer supply. BI helps optimize the efficiency of various aspects of the chain and ensures that customers receive their orders in a timely and orderly manner. In what way? Time for some real-world examples.


Digitizing your warehouse is the first step to logistical efficiency. An essential tool is warehouse management software. This software becomes the brain of the installation, coordinating all processes and guiding operators in each of the tasks assigned to them. Implementing this software eliminates the risk of errors in the flow of goods, the extraction and storage of products, and the preparation of orders. Business intelligence systems also speed up operations by reducing distances traveled and automated decisions. BI also allows you to increase warehouse capacity through intelligent space management.


The primary data to track supply chain management are costs and transportation revenue. You must follow this data as accurately as possible, that is, at the level of the specific customer, the order, and ideally, the shipment number. The primary difficulty in calculations arises because billing is usually done on a monthly invoice basis, and the data come from among sources. Therefore, accurate transportation costs are hard to calculate, making supply chain optimization more difficult.

With BI tools, you can retrieve data about the product you ordered and then estimate costs based on actual values and historical data. This way, you always have up-to-date data on shipping costs for individual customers, orders, and packages. In addition, the data you gain from BI systems will help you find answers to many other questions. For example, when is it worth providing free shipping? How often do packages have non-standard dimensions? Which carrier most frequently delivers destroyed goods? And many more.


Transportation costs are not just about shipping goods to the customer. Sometimes it is necessary to calculate the cost of transportation from one branch of the company to another when, for example, one place begins to run out of goods. It would help calculate how much it would cost you to transport and compare the result to your expected sales revenue. However, you can’t expect all the goods you transport to be sold immediately. Therefore, as part of your BI implementation, you can build a model that predicts the number of units sold for the next period. Then, by combining this cost and expected revenue data, you can search for the optimal number of units worth transporting.

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Configuring business intelligence for supply chain management

The three BI applications in supply chain management presented above are just examples. More opportunities to apply business intelligence systems in logistics and SCM. However, there is no doubt that setting up this model is not easy. Either way, you can benefit from automated and most efficient SCM solutions once configured correctly. Remember, however, that statistics are involved and always require enough relevant data to work correctly. For this reason, when deciding to implement BI tools into your supply chain management process, it’s a good idea to enlist the support of a third-party company. BI-partner who can identify the specific solutions and technologies that will best fit your organization and then help you properly prepare your data so that the visualizations and reports generated from it both add value to your business.