Turning your Company into a Data-Driven Enterprise

on March 05, 2018

Just Analytics engages with experts of various industries to share best practices with our customers. In this article, we tapped Joey M. Estrera, a Supply Chain Management expert with more than 40 years’ experience in operations, procurement and logistics in various industries including Manufacturing and Retail. Currently, Joey was the founding chairman and currently chief financial officer of BizSolv Asia and the Vice President for Research and Business Development of the Foundation of the Society of Fellows in Supply Chain Management. He is also a Guest Instructor at DLS-College of St Benilde School for Professional and Continuing Education and the Ateneo Graduate School Center for Continuing Education.

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Effective supply chain management is a precise science, requiring not just skill but business intelligence coming from a rich data set and reliable analytics.
Joey Estrera, Vice President for Research and Business Development of the Foundation of the Society of Fellows in Supply Chain Management, shared with us best practices in supply chain management and why he feels organizations should also focus on Spend Analytics.
What would you say are the key challenges in supply chain management here in the Philippines?
There are a lot. One is increasing globalization, which puts tremendous pressure on companies to provide higher quality products at the lowest possible cost. Consumers are much more demanding now and expect quicker response time from organizations. Innovation, which in a sense gives us more opportunities to improve, is also a cause of disruption for us as it is sometimes difficult to keep up with its fast pace.
What role does analytics play in supply chain management? How does analytics help resolve said challenges?
Supply Chain Management is basically the management of the flow of goods/services from the source to the final consumer and the counter-flow of information from the final consumer back to the source of materials/services. Our ultimate objective is to provide the best or highest customer service at the least possible cost, ensuring that a profit is made for the company.
Analytics is an important part of the management of the flow of information. Data is gathered and analyzed to determine the demand which becomes the basis for an organization’s targets, goals and plans. In an Integrated Business Planning environment, the use of these data drives the planning activities of the different functional areas of the organization: Finance – financial plans/budget, HR – manpower plans; Production – production schedules; Sales and Marketing – sales and marketing plans; Supply Chain Management – inventory plans, sourcing plans, etc.
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Let me zero in on the Procurement Function where I feel we don’t utilize analytics as much as we should. Analytics is used to transform a purchasing organization from the traditional reactive form to a more forward-looking anticipative function. The spend analysis shows the purchasing practitioner where the organization spend (in terms of purchases) goes; on which commodities, to which supplier, etc. Purchasing now plans out and creates sourcing strategies based on an analysis of spend (more commonly called spend analysis by practitioners). This analysis results in categorizing commodities as well as identifying priorities. The final product is a sourcing strategy for critical or key materials and services.
So, do most Philippine organizations analyze how they spend?
Unfortunately, not everyone is practicing it. The challenge in spend analytics is how to extract the data from the multiple possible sources of information. Most ERPs of companies are not configured to extract or to provide this kind of data. A lot of companies also do not classify and describe properly their purchases thus extracting information from the company information systems becomes a challenge.
What are the best practices in supply chain management that Philippine organizations should adopt?
Spend analysis is the first step in transforming the procurement organization into a strategic mode. The analytics help in the development of a “roadmap” of which commodities to prioritize in order to give the organization that edge over their competition. It’s one best practices that more organizations should adopt.
What are the key things that Philippine organizations should invest in to be able to manage their supply chain more efficiently?
Technology is one area where companies really need to invest, particularly the computerization of the processes in supply management thus ensuring that data is accurate and available. The availability of the data would be the basis of optimized decisions.
The most important lesson that we have learnt from our expert is that supply chain management is a dynamic and evolving subject. It cannot be taught, but rather needs to be constantly developed.
We have developed this solution for one of our customers, where we have brought together data across their ERP modules such that just by glancing, the senior executives can get an overall view of their organization performance. This results in operational effectiveness leading to better management of resources.

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