Turning Information Into Insight

I recently participated in a roundtable discussion with an executive from Apple, Inc. Given the technology company’s perennial ranking as a world class supply chain, I was surprised when the executive admitted “we are choking on data but starving for information.”

Although Apple is a produce company in name only, its quest for actionable knowledge is shared by companies across the farm-to-fork supply chain. Technology has made it possible to capture and disseminate more data than managers across the supply chain can discern. The question becomes how to harvest the most important insights for effective analysis and decision making. That’s the perpetual information challenge faced by all companies—Apple included—to create fast, efficient, and safe supply chains.

This concluding installment of our back-to-basics series will highlight the essential contribution made by information to supply chain excellence. Insightful commentary from four experts emphasizes key information requirements and the role they play in supply chain planning and logistics execution.

INFORMATION ROLES AND REQUIREMENTS
Most people think about product and processes when considering the produce supply chain. Information also deserves attention as it drives supply chain activity. Retailers derive their inventory replenishment decisions from produce department point-of-sale data and supply availability information. Transportation schedules are based on order information and delivery service goals. And, field production is based on demand and weather forecast information.

Essentially, information connects the extended produce supply chain, helping managers to understand activities taking place at supplier and customer locations. With this cross-chain visibility and related insight, managers have a better ability to assess situations and develop appropriate responses. Three information requirements enhance supply chain knowledge and decision-making.

Information must meet quality standards to support fact-based analysis and action. Dr. C. John Langley, professor of supply chain management (SCM) at Penn State University notes: “Although supply chains generate significant volumes of data, the real value is created when data is transformed into information and insight.” When quality information is being derived from the data, managers can make more effective decisions. To promote success, the supply chain information must be accurate, relevant to the decision being made, readily available in a usable format, and accessible in a timely fashion.

Supply chain information must readily flow within and between organizations. A free flow of information will promote integrated decision making and process synchronization. For example, a steady stream of timely and accurate customer demand data is needed to drive effective upstream production and purchasing decisions by manufacturers and suppliers. Shared insights regarding supplier capacity, production schedules, and inventory availability will facilitate alignment and efficient execution of downstream processes.

Information must support multiple types of supply chain decisions. With SCM taking on a more important and visible role in most organizations, the need for information greatly expands. Managers at every level of the supply chain require different types of information to excel in their roles. This intelligence is needed for strategic and tactical planning, routine decision making, and execution processing.