Picture this: you’re running a supplier-dependent business, but stockouts and overstocks never arise. Or, you’re running a transportation company, but your fleet never experiences an unexpected repair. Fish story? No. This is exactly what happens with companies that use predictive supply chain analytics. This is a current issue for many businesses, as according to Entrepreneur, stockouts and overstocks are costing $1.75 trillion a year to retailers only.

In this article, we enlighten what is supply chain analytics, explain the benefits of supply chain analytics for diverse industries, and provide use cases and examples thereof. We’ll also define the common challenges that predictive analytics helps businesses to address and how you can implement the solution. 

Disclaimer: All the benefits described within this article imply that companies implemented predictive supply chain analytics via a comprehensive tech vendor.

Cutting to the chase, let’s start with predictive analytics in supply chain use cases.

Predictive Supply Chain Analytics Use Cases 

First things first, let’s just mention that predictive analytics is based on artificial intelligence and machine learning. 

In this section, we provide a very brief description of how predictive supply chain analytics can be helpful for businesses. But no worries, we’ll unfold the power of this solution throughout the article. 

Supply Chain Analytics Use Cases
Predictive Supply Chain Analytics Use Cases
  • Demand Forecasting and Inventory Management. Amazon uses predictive analytics to forecast demand by analyzing sales and browsing data, ensuring optimal stock levels and reducing waste. Retailers similarly predict seasonal demand spikes to avoid stockouts and excess inventory.
  • Supplier Performance and Risk Management. AI and ML in manufacturing allow managers to monitor supplier delivery and quality metrics with predictive models to spot risks early, minimizing disruptions by proactively addressing potential issues.
  • Production Scheduling and Capacity Planning. Data analysts in supply chain forecast machine maintenance and demand trends, helping companies optimize production schedules, reduce downtime, and improve resource allocation.
  • Fraud Detection and Security. Predictive analytics executes anomaly detection with machine learning by analyzing transaction and shipment data. If the system identifies unusual patterns, it alerts about potential fraud or security breaches, protecting supply chain integrity and preventing losses.

These supply chain predictive analytics use cases are only the tip of the iceberg. Supply chain and analytics possess way more powerful potential, so let’s take a look at some of the real-world solutions.

Supply Chain Analytics: Examples of Predictive Solutions 

As we can see, predictive analytics is a universal solution that can be applied in diverse businesses. Let’s dive deeper and see specific supply chain analytics examples. This will help us to better understand how different industries improve their operational activity with the solution.

Supply Chain and Data Analytics In Key Industries
Key Industries Transformed by Predictive Analytics in SCM

Predictive Analytics in Logistics 

Predictive analytics in the logistics industry provides data-based suggestions for the optimal ways to move goods, which translates into reduced transit times and costs. In this way, companies improve efficiency and service level by analyzing routes, warehouse locations, and shipping patterns. 

When it comes to cost prediction and budgeting, Artificial Intelligence improves logistics as well and allows businesses to forecast transportation, storage, and handling expenses. To that end, analytics process historical data, market trends, fuel prices, and other factors. These insights allow managers to allocate budgets efficiently.

Financial performance is a component of only one of the five types of data covered by data management strategies. Want to know what the rest are?

Check out a comprehensive guide on data management strategies.

Retail Supply Chain Analytics 

Predictive supply chain analytics provides retailers with actionable insights. Namely, customer behavior and preferences based on buying patterns, seasonal trends, and personalized demands. This enables retailers to stock the right products at the right time.

Predictive analytics in retail also enables new product launch success forecasting. The analytics forecast demand, estimates the ideal launch window, and assesses potential risks based on similar past launches. This information allows retailers to fine-tune marketing strategies, optimize inventory, and minimize overstock or stockouts.

Supply Chain Management Analytics in Manufacturing 

Overstocks and stockouts of items define the efficiency of manufacturers’ operational activity. The manufacturing companies lose their profit if they can’t provide clients with what they require. Artificial intelligence for the manufacturing industry, in turn, ensures comprehensive inventory management. Thus, businesses see real-time data about all the items and can satisfy their clients’ demands.

Dmytro Tymofiiev: Delivery Manager at SPD Technology

Dmytro Tymofiiev

Delivery Manager at SPD Technology

“Here, at SPD Technology, we recognize Big Data analytics as the main transformative force for manufacturers and know how to leverage this technology to achieve tangible business value for organizations of all sizes. The key here is to provide a holistic approach to implementation, using collected data to cover all possible areas that can benefit from it.”

Quality control and predictive maintenance are other important areas where predictive analytics brings tangible value. Supply chain management data analytics allows manufacturers to ensure high-quality control through real-time production data, sensor readings, and historical defect patterns. Predictive analytics in the supply chain is capable of identifying potential machinery and equipment failures. Such a proactive approach allows companies to schedule maintenance work, prepare all the necessary tools to execute the repair fast, and organize spare machines to avoid idling. 

Following up on the subject, SDP Technology has a solid background in machine learning development to streamline manufacturers’ production capacities and support scaling. 

For instance, our ML solution for a liquid packaging board and a market pulp manufacturing company helped the business automate invoice processing сompletely, save time, and reduce human error. 

Predictive Analytics for Supply Chain in Construction 

Supply chain visibility, predictive analytics, and real-time monitoring work together to optimize resource allocation and reduce costly delays on construction sites. Real-time monitoring provides site managers with live data from IoT devices, GPS trackers, supplier systems, and construction management software. This data can be transformed into predictive models. By using data analytics in the construction industry, site managers can instantly see where materials are, how much stock is left, or if equipment might fail soon.

Supply chain and data analytics also provide procurement managers with real-time data about all materials usage. Predictive analytics forecasts the required amount of materials for each phase, considering past usage rates, project size, seasonal demand, and other factors. 

At the same time, real-time data from suppliers allows predictive models to optimize stock, ensuring the availability of required materials without unnecessary surplus.

Data analytics in supply chain management (sometimes shortened to SCM analytics) can provide data-driven suggestions about the best time for material purchase. By analyzing market trends, it forecasts price fluctuation. Additionally, predictive analytics in supply chain management evaluate suppliers’ reliability and define risks early so the procurement team can proactively negotiate contracts with other suppliers. 

Another example of SCM analytics in action: SPD Technology developed a business intelligence app for the HaulHub platform, tailored for heavy construction companies. We created modern UI/UX with custom charts and widgets, enabled enhanced data processing and analytics, and achieved significant infrastructure cost savings through optimization. 

The list of benefits of predictive analytics in construction can go on.

Eager to learn about artificial intelligence for supply chain optimization?

Read the article about the main use cases, challenges, and applications of AI/ML in the supply chain.

Predictive Analytics in Transportation 

Supply chain analytics software collects real-time data about weather conditions,  traffic jams, and patterns. Based on the data, the software provides optimal routes. Companies save millions of kilometers annually,  which means cuts in expenditures for tons of fuel and fleet maintenance, and faster movement across commercial routes.

Besides city, intercity, and international routes, predictive analytics helps building companies optimize routes within construction sites. Also, it allows businesses to predict the impact of such sites on the future road traffic in the area and region.  Our company has experience in developing proper solutions.

We developed an AI-powered solution for the HaulHub platform. In this case, our team provided the traffic analysis solution. With the help of AI, it analyzes traffic patterns across construction areas, providing insights into how construction activities impact road traffic before, during, and after construction.

When it comes to fleet management and maintenance scheduling, Artificial intelligence and the Internet-of-Things have brought telematic solutions to the table. Telematic systems make it possible to carry out remote predictive analytics of vehicles. Processing sensor data, analytics software monitors vehicle depreciation and forecasts maintenance schedules. It allows fleet managers to see what kind of details or components will require repair in the future. Thus, transportation companies can perform maintenance efficiently.

Predictive Supply Chain Analytics Implementation: Getting-Started Practices 

Despite its growing adoption, implementing business analytics in supply chain management can be challenging. This section provides key steps to make the process smooth and efficient. 

Implementing Predictive Analytics in Supply Chain
How to Get Started with Predictive Analytics for Supply Chain

Assessing Current Supply Chain Operations 

The first thing you want to do is understand where your company is now. Performance metrics are a good place to start. Examine KPIs such as on-time delivery, order accuracy, and inventory turnover. 

Process mapping is another method for understanding the current state of the play. Create maps that visualize how materials, information, and activities happen, from their “A” point to their “Z” destination. Assess risks and the technologies you use and evaluate your suppliers’ performance.

Ensuring Buy-In from Key Departments

Implementing a new business solution requires a thorough adoption approach. Elaborate on a program that will help your stakeholders from key departments understand and study how predictive analytics in the supply chain can benefit their work. 

Develop a training program to teach stakeholders how to access, interpret, and apply insights from predictive models. Showcase what specific business problems they can address by leveraging predictive supply chain analytics. You can develop the training program independently or delegate the onboarding process to your tech vendor if they support such an option. 

Creating a Supply Chain Analytics Strategy 

Now you need a strategy outlining how predictive analytics will transform your supply chain. Set clear objectives that will let you:

  • Reduce costs (e.g., “install telematic systems for the entire fleet within Q1”),
  • Improve efficiency (e.g., “train fleet managers to use route optimization software within the next sprint”),
  • Mitigate risks (e.g., “identify high-risk drivers within the next month”).

Create a structure (assign roles) for:

  • Data collection, cleansing, and otherwise processing,
  • Analytics software integration,
  • Data analysis,
  • Implementation of gained insights.

Incorporate different supply chain analytics techniques:

  • Descriptive (what happened),
  • Diagnostic (why it happened),
  • Predictive (what might happen),
  • Prescriptive (what should be done).

Prescriptive analytics in the supply chain has common traits with retrospective analysis (what could be done). A well-structured strategy allows you to clearly understand what exactly you need to do and how to achieve your goals.  

Choosing Tailored Supply Chain Analytics Tools 

Depending on your specific business needs, select the best-fit analytics tools to make the analysis workflow efficient and convenient. There are many and various supply chain analysis tools to choose from. Some of them offer only a full package purchase, meaning you will pay for redundant features. The others provide several subscription options.

However, finding a package that includes only the functions you need can be a problem. That’s why, in most cases, the best option is to develop a customized supply chain analytics platform tailored to your requirements. 

Starting with Supply Chain Data Collection 

Gather data systematically from diverse sources, including inventory systems, sales records, supplier databases, and customer orders. Ensure you capture information on inventory levels, customer demand, supplier lead times, production rates, and transportation metrics. The more information, the better supply chain data analysis you’ll be able to perform.

Implement technologies that enable real-time data processing for swift responses to changing market conditions. Focus on collecting both historical and real-time data to establish baselines and identify emerging patterns.

Establishing a Supply Chain Data Management Framework

Create robust quality protocols to ensure the accuracy, completeness, and relevance of all supply chain data. Implement data cleansing processes to remove duplication and errors, improving the reliability of resulting insights. 

Develop integration frameworks that break down silos and provide comprehensive visibility across operations. Invest in advanced supply chain management and analytics practices that support real-time processing capabilities and facilitate predictive modeling. 

Collaborating With External Partners 

Integrate predictive analytics tools with existing partner systems to create a cohesive ecosystem. The cooperation of your in-house specialists, like data scientists, statistical modeling experts, and supply chain managers, with external partners will bring a synergy effect to your business. 

With secured data-sharing protocols, you and your partners will get a win-win situation through generating more accurate and deeper insights. Create feedback mechanisms that continuously improve models based on real-world outcomes from partner interactions.

Possible Challenges of Enabling Predictive Supply Chain Analysis 

Supply chain data science allows companies to address a wide spectrum of challenges. Still, enabling predictive supply chain analysis usually comes with some challenges. Let’s figure out the most common among them and how we can help to overcome them.

The Challenges of Predictive Analytics in Supply Chains
The Challenges of Predictive Analytics in Supply Chains

Global Supply Chain Data Integration and Coordination 

Many businesses require processing data from multiple sources. It’s a common situation when you work with a flock of suppliers. However, it’s necessary to perform comprehensive business analysis, gain accurate insights, and make data-driven decisions. Different sources often come with incompatible data formats and poor quality.

To address the challenges, we implement ETL/ELT (extract, transform, load) pipelines that map inconsistent formats, clean incomplete records, and align time zones, currencies, units of measure, and product codes across geographies. 

How it works:

  • Extract: We collect data in RAW format from various sources, such as databases, applications, flat files, APIs, ERP, WMS, TMS, CRM, IoT devices, and more.
  • Transform: At this stage, our ETL platform processes, normalizes, standardizes, and structures the retrieved data to make it compatible with the target system. 
  • Load: The transformed data is written into the target system, such as data lakes or data warehouses (like AWS Redshift, Snowflake, or Google BigQuery) to unify fragmented data streams from global partners.

The ELT approach reverses the order of the last two steps, but the ultimate goal is the same. 

Demand Forecasting Volatility

There are many and various factors defining demand value, starting from consumer behavior changes and market conditions fluctuations, ending up with global shocks like pandemics and geopolitical events. These factors can make the initial business forecasts outdated and pointless in a matter of moments. If the latter factors are almost unlikely to forecast, customer behavior is something you can work with.

At SPD Technology, we provide AI for customer behavior analysis and help companies to predict market trends. For example, we collect and process such data as:

  • Customer demographics: Age, location, gender, income;
  • Website activity: Product views, search history, time spent on pages, clicks;
  • Purchase history: Products purchased, order value, frequency of purchases;
  • Reviews and ratings: Consumer feedback or customer surveys on products;
  • External data: Social media sentiment, market trends.

We use the gathered data to train an ML model. After the successful evaluation and validation stage, we deploy the model to our clients’ websites.  Now they can generate real-time predictions, improving customer experience through personalized purchase recommendations. Or, they can collect predictions and exploit them to calibrate their future marketing campaigns. Also, the predictive ML model allows businesses to forecast demand based on the analysis of historical data.

Enabling Supply Chain Data Analytics Across Different Locations

There are situations when internal systems store data at different locations. It can be:

  • Procurement data
  • Inventory data
  • Production planning data
  • Financial data
  • Sales and distribution data.

The list can go on. Juggling between each data environment is inconvenient. The fragmentation can slow down analytics implementation and limit the visibility needed for accurate predictions. And the challenge is to create a unified data environment across these locations. 

Like many other industries, logistics faces a similar problem. We solve it by consolidating all operational data in a single place. As a result, instead of switching between different interfaces, fleet managers can process business data through a one-window-for-all CRM system.

Integrating Supply Chain Analytics Software with Legacy Systems

Due to historical factors, many companies operate with legacy systems. This results in an inability to use modern technologies and software environments. Now, such companies lose to their competitors who apply modern approaches but might not be ready to completely shift to state-of-the-art infrastructure. That said, they are still looking for options to benefit from predictive analytics solutions.

In such a case, we help companies integrate predictive analytics with a legacy system, ensuring flawless performance. To that end, we can:

  • Expose legacy data via API. We develop APIs (e.g., RESTful, SOAP) on top of the legacy system to securely expose the data required for the predictive analytics engine.
  • Execute middleware integration. We implement a middleware layer to act as a translator and intermediary between the legacy system and the modern predictive analytics solution.
  • Execute database integration. This involves directly connecting the predictive analytics solution to the legacy system’s database(s) or replicating/transferring data between them.

There are other approaches to choose from. And each of them has its benefits and considerations. Therefore, we carefully assess the specific characteristics of the legacy system and the requirements of the predictive analytics solution to determine the most suitable integration strategy for every client.

Potential Disruption Modelling for Logistics Analytics 

The logistics business implies diverse risks and disruptions. It includes natural disasters, port strikes, cyberattacks, and others. Whatever it is, the task of predictive analytics in logistics is to ensure that the fleet will deliver its cargo optimally and cost-effectively. For example, predictive analytics platforms collect real-time data about weather conditions and forecast which routes can be affected by natural disasters. 

Given our experience in software development for logistics and a custom brokerage company, we are well aware of the potential disruption modelling importance for the industry. For this goal, we developed a CRM allowing drivers and fleet managers to communicate efficiently. Besides a set of paper-free optimization features, it helps drivers select the shortest and safest routes. Upon request, our company provides computer vision development solutions that give a leg up on cargo monitoring.

Enable Predictive Data Analytics in Supply Chain with SPD Technology 

Having 19 years of experience in the industry and 460+ successfully delivered projects, we are experts in predictive analytics and know how to implement it seamlessly. We know all the ins and outs. With SPD Technology as your trusted tech partner in implementing supply chain predictive analytics, you can expect to get the next value for your business.

Tailored Predictive Analytics Solutions

SPD Technology designs predictive models that adapt to unique business contexts rather than forcing clients into prebuilt solutions. We deploy behavior prediction engines that analyze variables for clients from various business domains. Our commitment to building modular AI architectures allows our clients to start with focused use cases (e.g., inventory optimization) before expanding to enterprise-wide forecasting. 

Seamless Integration with Existing Systems

SPD Technology’s integration methodology prioritizes minimal disruption through API-first architectures and legacy system modernization. We are capable of deploying a data access layer (DAL) that mirrors critical datasets in a cloud data warehouse, enabling real-time analytics without compromising legacy workflows. The company’s interoperability framework supports numerous system connectors. We ensure seamless integration with clients’ internal software environments. No matter what industry you operate in. 

Proven Success with Diverse Industries

With 19 years in the IT industry and 460+ successfully delivered projects, SPD Technology possesses in-depth expertise in many and various business domains. Specifically, we help logistics, transportation, retail, and construction companies calibrate their supply chains to their fullest potential. 

How do we meet and outperform our cross-industry clients’ expectations?

  • Deep Industry Understanding and Technical Expertise: Our stakeholders with solid business backgrounds thoroughly elaborate on every project to ensure that clients’ requirements are crystal clear to our development team. The tech-savvy team utilizes advanced software tools to deliver efficient predictive supply chain solutions. Fast and cost-effective.  
  • Got You Covered in Operational Chores: Our team oversees all the operational activities related to developing, implementing, and maintaining the predictive supply chain analytics solutions. Meanwhile, our clients can focus on their strategic business tasks. 
  • Scalable and Future-Proof Products: Implementing AI/ML-based technologies into clients’ system environments, we understand that their businesses are likely to grow in the future. Thus, our predictive analytics solutions are scalable and high-load resistant.

SPD Technology is all about delivering comprehensive and affordable solutions tailored to the specific needs of businesses in different industries.

Data Security and Compliance

SPD Technology embeds regulatory compliance into analytics pipelines through:

  • Encryption Protocols: End-to-end Transport Layer Security encryption for data in motion combined with format-preserving encryption (FPE) for sensitive fields.
  • Access Controls: Role-based data masking that limits PII exposure to authorized users only, reducing insider threat risks.
  • Audit Trails: Immutable blockchain logging for all data transformations, meeting GDPR record-keeping requirements.

The company’s compliance-as-code approach automatically flags GDPR/CCPA violations during data ingestion, preventing potential breaches in client environments.

Actionable Insights and Reporting

For our customers, we transform analytics outputs into executive-ready dashboards that highlight:

  • Predictive vs. Actual Variance: Color-coded alerts when sales forecasts deviate from a configured value.
  • Cost-Benefit Simulations: Interactive models showing how inventory reductions impact service levels.
  • Risk Heatmaps: Geospatial visualizations of supply chain disruption probabilities.

We develop user-friendly dashboards for companies operating in different industries. Our team customizes dashboards for each client upon their specific business needs. Thus, we make sure clients can create all necessary reports. Fast. Visualized. Insightful. Actionable.

Conclusion

In today’s data-saturated world, the ability to process it fast and accurately is a must to get a winning edge. Supply chain data solutions are a game-changer for businesses in multiple industries. You can never know for 100% what will be in the future, but data-based analysis can show you where your company has bottlenecks now and what is likely to happen next. 

This knowledge efficiently secures companies from unexpected downtime, translating into saved expenditures. The key to success is to partner with a reliable tech vendor that can develop a comprehensive supply chain predictive analytics system and understand the nuances of your specific business.

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    Eliminate bottlenecks, reduce your costs, and increase profit with our customizable supply chain analytics solutions.

FAQ

  • What Is Predictive Analytics in Supply Chain?

    Predictive analytics in the supply chain is an AI/ML-based solution that processes historical and real-time data to forecast future events that can affect businesses. What are the five common types of supply chain analytics?

    The five common types of supply chain analytics are:

    • Descriptive (what happened),
    • Diagnostic (why it happened),
    • Predictive (what might happen),
    • Prescriptive (what should be done).
    • Retrospective (what could be done)

    These five techniques are part of the data analytics strategy.