Prescriptive analytics stands out as the key technological tool for facilitating advanced data-driven decision-making within the supply chain industry. It is currently the most promising and impactful form of analytics available. This innovative approach combines the predictive capabilities to foresee future trends with actionable recommendations, enabling businesses to attain their desired goals. Additionally, prescriptive analytics takes into account various constraints, trade-offs, and potential impacts of different available choices, providing a comprehensive and strategic approach to decision-making.

What is Prescriptive Analytics?

Prescriptive analytics is an advanced form of analysis that enhances decision-making by suggesting actions based on insights obtained from descriptive, diagnostic, and predictive analytics. In supply chain management, prescriptive analytics uses historical and performance data to recommend optimal courses of action, aiding in strategic decision-making related to network design, inventory management, warehouse optimization, and supplier relationships. By leveraging prescriptive analytics, businesses can streamline supply chain operations, cut expenses, and enhance decision-making processes, resulting in improved overall supply chain performance.

Impact of Prescriptive Analytics on Supply Chain Optimization

Prescriptive analytics strategically utilizes algorithms to analyze current and historical data within the supply chain, enabling informed decision-making and constructive actions. By leveraging insights derived from data, supply chain managers can connect trends, patterns, and associations to improve operational efficiency. Implementation of prescriptive analytics can help businesses proactively address challenges such as stock errors, damaged inventory, and demand miscalculations, leading to enhanced performance and cost savings. Moreover, the prescriptive functionalities provided by analytics allow businesses to effectively handle customer service issues, labor disputes, and traffic congestion, all while streamlining their processes and saving valuable time. By predicting these variables, companies can enhance their logistics, minimize interruptions, and maintain smoother operations. Essentially, prescriptive analytics within the supply chain equips businesses with the ability to generate well-informed predictions, proactively address upcoming changes, and optimize their operations with intelligent recommendations.

Predictive vs. Prescriptive Analytics

Utilizing predictive and prescriptive analytics is crucial for informing business strategies through the analysis of collected data. Predictive analytics aids in forecasting potential future outcomes, while prescriptive analytics goes a step further by offering specific recommendations to achieve desired results. These analytical tools are essential for converting descriptive metrics into actionable insights and well-informed decisions. Integration of predictive analytics allows businesses to anticipate future trends, pinpoint potential risks, and proactively make decisions based on the insights gained. This forward-thinking approach provides valuable foresight, enabling organizations to navigate changing market dynamics more effectively. Prescriptive analytics goes beyond predictive capabilities by providing precise recommendations and actionable steps. Through the analysis of different scenarios and the use of advanced algorithms, businesses can identify the most effective course of action to achieve desired results. This approach aids in optimizing resource distribution, improving operational efficiency, and enhancing overall performance.

Use Cases of Prescriptive Analytics

From Logistics Management to Demand Forecasting, Capacity Planning, Inventory Management, SKU Optimization, Pricing, and Promotions, enterprises can utilize prescriptive analytics to make informed, data-driven decisions efficiently. Below are some of use cases, which demonstrate how prescriptive analytics helped them:

• The ready mix concrete industry faces challenges in its supply chain due to the quick solidification of the product. Efficient production scheduling and truck dispatching are crucial to maximize revenue and customer satisfaction. One of the top priorities for a leading Ready Mix Concrete (RMC) company was achieving maximum efficiency while meeting sustainability goals. Nirmalya SCM utilized prescriptive analytics to develop a 360-degree customer scorecard, considering various factors such as number of jobs, sales volume, load size, average distance to plants, and recall percentage to segment customers and recommend the most optimal customer mix. Additionally, opportunities to improve asset utilization were identified, such as analyzing reasons for trucks not being sent to the nearest plant, reducing high return travel times, and minimizing customers with extended on-site times. Through the reorganization of prioritizing customers and redistributing trucks was also observed.
• For a fresh produce brand specializing in bakeries with a limited shelf life, the ability to ensure the availability of the right products in the right quantities at the right times is crucial to success. With a complex supply chain serving over 150 outlets and offering more than 200 products, the need for granular visibility and actionable recommendations to optimize operations according to demand was paramount. Utilizing Nirmalya SCM's prescriptive analytics capabilities, the business was able to uncover vital insights and recommendations. These included analyzing the frequency of purchase interest expressed by individual customers, predicting their future purchasing behavior, managing price variances, forecasting future purchases, and assessing the value-add of purchased commodities. With this valuable information at their fingertips, the business was able to streamline their supply chain processes and make informed decisions to meet customer demand effectively.
• Capacity planning is an important facet of supply chain optimization that can be effectively managed through the use of prescriptive analytics. By utilizing prescriptive analytics, businesses can accurately predict demand in their respective regions and adjust their capacity accordingly to meet fluctuations in sales. For a Furniture company with a intricate manufacturing process, increasing production posed a significant challenge due to slow manufacturing processes. Lacking visibility into their operations made it difficult to identify areas for improvement and maximize efficiency. By incorporating Nirmalya SCM's prescriptive capabilities, the company was able to gain detailed insights into their production process, uncover hidden bottlenecks and unused capacity, ultimately boosting operational efficiency, resulting in potential cost savings and reduced processing time on an annual basis.
• Inadequate inventory management can result in costly overstocking or missed sales opportunities due to understocking. Utilizing a prescriptive analytics model can help businesses maintain optimal stock levels by analyzing customer behavior trends and upcoming events. For example, a retail bakery chain faced challenges in effectively stocking raw materials, which can lead to waste or customer dissatisfaction. By leveraging Nirmalya's AI-powered SCM, businesses can receive tailored recommendations on product prioritization and inventory optimization based on demand sensitivity, ultimately improving operational efficiency and customer satisfaction.

Role of Nirmalya Enteprise Platform

Nirmalya SCM platform provides end to end solution for any supply chain enterprises with prescriptive analytics and predictive analytics. It has the potential to revolutionize your supply chain management process by enhancing human decision-making. It provides three key advantages that traditional decision-making in the supply chain may lack:

• By significantly speeding up the decision-making process, prescriptive analytics enables companies to swiftly adjust their business operations and mitigate disruptions throughout the supply chain.
• The recommendations offered by prescriptive analytics are remarkably accurate, ability to analyse multiple variables and generate recommendations quickly and accurately.
• Prescriptive analytics offers optimization benefits across all functional areas of the supply chain, making it a valuable tool for enhancing overall efficiency and effectiveness.

Nirmalya SCM leverages the strength of prescriptive analytics to offer guidance on various aspects of business operations. This includes Logistics Management, Demand Forecasting, Capacity Planning, Inventory Management, SKU Optimization, Pricing, and Promotions. Through the use of prescriptive analytics, organizations can make informed, data-driven decisions effectively.

If you're unsure about how to leverage prescriptive analytics to optimize your supply chain, reach out to us for a comprehensive supply chain analytics solution that offers a 360-degree view.