Many enterprises fail to achieve a positive Return on Investment (ROI) in the supply chain, which means that they lose their investments. There are 4 common problems that decrease your ROI in the supply chain. If you are dealing with negative ROI, find out why it happens.
Before introducing you to the problems that decrease your ROI in the supply chain, let’s start with what return of investment (ROI) is. The ROI is a measure that tells you if you get a loss or a gain from an investment. In other words, it evaluates the performance of your investments and the impact of your costs. In order to measure it properly, you need to be aware of what happened in the global market, in your company, and in your supply chain.
The 4 common problems that decrease your ROI in the supply chain are:
Problem #1 Uncertainty in the global market
Nowadays, there are different situations that create uncertainty in the global market in the supply chain. Some of them are rising prices, lack of high-tech, social conflicts, running out of raw materials, etc. These situations create disruptions in the flow of the supply chain, which directly decrease your ROI, and cost you also millions of dollars. In spite of the situations themselves, many companies are not ready to deal with them because of the lack of updated analytics that helps the supply chain managers to make fast and accurate decisions.
Problem #2 Demand Volatility in Logistics
Fluctuations in the demand happen because of changing trends, the seasons, and the customers’ behavior. Most companies are not prepared to face this challenge and have problems with their productivity and their stock. It also impacts the ROI because if you are not able to predict these changes you cannot have the right amount at the right time. It ends up in losses for your supply chain ROI.
Problem #3 Poor Forecasting in Supply Chain
If you manage poor forecasting in your supply chain, you cannot estimate properly how the performance of your enterprise is. In addition, you are either able to react to any uncertainty in the global market, changes in your demand, or understand the integration of the different areas of the supply chain. It affects your ROI because not having accurate information makes you take bad decisions, and as a direct consequence, your enterprise works wrongly. An inefficient performance drives you into losses for your supply chain.
Problem #4 Disconnected Supply Chain
Different areas of the supply chain are in disconnection. It also affects your ROI because lack of connectivity produces gaps in the logistics processes. These gaps end up in lack of visibility and poor forecasting, and at the same time in an inefficient performance which costs you a lot of dollars.Managing Business Intelligence in your logistics industry provides you with accurate and integrated forecasting that drives you to get a better performance in your logistics and obtain gains in your Return on Investment. Click To Tweet
To address these issues and reverse your negative supply chain ROI, you need to upgrade your technology and apply business intelligence (BI) to your logistics. It allows you to manage integrated analytics by connecting all the areas, processes, people, and data that are involved in the logistics industry. Running this type of analytics makes you connect your entire supply chain, and end-to-end processes, gain complete visibility, close gaps, understand and predict customer’s behavior and requirements, and be prepared to face the world market uncertainty
Keep this in mind, supply chain business intelligence analysis allows you to obtain more knowledge about each aspect related to your performance. And if knowledge is power, you can perform better and increase your ROI. Guarantee your positive ROI by applying Business Intelligence. Obtain this here.