Critical Supply Chain Data- What Data Should a Company Collect


Logistics Consulting Services

A major piece of supply chain management is the collection of sales data.  Sales data is extremely important to supply chain analytics and without linking this data to supply chain analytics a management team is missing out on significant insights

The collection of sales data should include as much useful information as possible.  I use the term “useful information” because some information might never be used.  Below an explanation of sales data points needed in supply chain analytics, the end goal being the creation of demand forecasting models. Collect total sales for each product or service and in a time series. (for supply chain purposes you don’t need much customer information but the location of each sale should be recorded for more advanced supply chain networks)
Information to Record

  • Average Demand
  • Demand Standard Deviation
  • Cost of over producing
  • Cost of under producing

A demand forecasting model will help management decide when to produce and how much to produce for tangible goods. For intangible goods forecasting models will help decide how much capacity is needed and when it is need to maintain an optimized service level

To Establish appropriate models a company should record also these operating metrics

  • Record and measure the average lead time in a appropriate units (hours/days/years)
  • Demand rate (items per year)
  • Setup costs / ordering costs
  • # of units to purchase at a time
  • Average Inventory levels
  • Purchasing Costs

These 6 pieces of information can be used to understand your supply chain system and how to optimize your procurement activities and production activities.

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