Contemplating ‘Big Data’ in supply chain risk management
by Kelly Barner
Last month I had the opportunity to interview Kasia Katrycz, riskmethods’ Director of Risk Intelligence. We talked about how humans and machines are working together to isolate relevant risk indicators from all the ‘noise’ in the supply chain. With the added capabilities afforded to us by Big Data in supply chain risk management and Analytics, the problem is no longer finding information – it is discerning meaning and taking informed action.
Big Data in Supply chain risk management: An ‘ocean’ of information
Kasia has a great way of describing the sheer expanse of data available today – she refers to it as an ‘ocean’ of information.
I’m fortunate enough to live close to the Atlantic Ocean. In a little over an hour I can be standing at the ocean’s edge, looking out at the sea and sky with no end in sight. If you’ve ever done the same, you know the feeling of smallness that comes from standing before something so large and untamed. I imagine it is the same feeling many supply chain professionals have in response to being faced with a global supply chain, multiple tiers deep, and far too extended to be seen clearly all at once.
We throw the phrase ‘big data’ around like we know what it means. Unfortunately, in many cases we’re just talking about following the same approach we always have, but with more information. More is not big any more than a swimming pool is the ocean. To truly harness the power of big data we need to understand its full potential and apply it to our business challenges.
For instance… Anyone with some time and an Internet browser can do a search for news stories on a specific city or industry
You’ll find interesting information – possibly even something valuable to the business. Automating that single search does not count as taking a big data approach.
Now try running that same search, targeted to a specific supplier organization, address, region of the world, etc. every second of every day, forever. But we’re not done. At the same time you also need to run similar searches for all of the other relevant risk indicators you’ve identified – oh, and while you’re at it, make sure you predetermine what the actual impact of a risk event or disruption will be to the business. And if something does happen, you need to instantly notify a list of predetermined people so that they can get down to business and respond.
That is BIG.
But it isn’t a purely human task. Even if you could run all of the searches at once on an ongoing basis, you’d need to stop for lunch eventually. Perhaps more importantly, there is no value in assigning a human to that task. Supply chain professionals should focus on determining risk indicators, forecasting business impact, and making decisions in response to verified intelligence.
Every process and technology applied by procurement and supply chain professionals can be improved with access to big data driven applications: sourcing, SRM, contract management, logistics… The important thing is to make sure you’re thinking big and understanding big. Don’t just look for more, demand the most.
We also can’t allow ourselves to become overwhelmed by the scale of the challenge. Humans have been sailing the oceans for well over a hundred thousand years. With the right preparation, team, and tools modern supply chain professionals can master the ocean of information and find both the meaning they seek as well as the basis for strategic decision making.
Get an overview about Risk Intelligence at riskmethods and how it works here.
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Learn more about Big Data and Artificial Intelligence here.