What is a data-driven strategy and how can it be applied to the supply chain?

In this post, we will explore the key definitions of data-driven and how to convert data into actionable insights to boost results.

The speed of information exchange and technological advancements have led companies to collect and store increasing amounts of data. However, not all companies are prepared to use this data effectively in their daily operations, which is essential for a data-driven strategy.

This concept has enormous potential and can benefit companies in all sectors. That is why it has become a cornerstone for those who want to stand out in today’s market. Do you know what it takes to leverage this strategy on a daily basis?

In this post, we will discuss the key definitions of data-driven, how to turn data into actionable insights, and why this concept is vital for understanding consumer behavior and increasing sales.

What is data-driven? 

Data-driven is a strategic concept that, in practice, means the business is managed based on data. Thus, all movements and decisions are based on concrete, consistent information that is aligned with market reality. 

One of the most common mistakes when planning a data-driven strategy is believing that simply collecting and monitoring data is enough. In fact, it is necessary to go further and convert this information into actionable insights. 

By transforming data into comprehensible and relevant material, businesses can generate actions that put them ahead of the competition, as well as allow for a better understanding of the primary risks in operations and processes that need optimization. 

Importance of a data-driven culture 

In the last two years, data-driven culture has ceased to be just a trend and has become a fundamental strategy for businesses seeking to increase their market presence, especially as we observe the digitalization of the market and consumers. 

Physical barriers are no longer a significant challenge for sales, which can grow through the efforts of e-commerce, for example. However, without monitoring performance data, how to know what and how to sell in such a vast market?

Basing strategy solely on intuition or guesswork is not the answer, as it undermines results and growth numbers, often leading to actions that are not aligned with the business or the market reality. 

To build a data-driven culture, it is necessary to change the way of thinking and how strategies and people are managed. Collecting, selecting, compiling, and correctly using data must become part of the company’s core business, providing an endless source of real parameters to boost results. 

How to apply data-driven in the supply chain? 

Predictability of results is very important for the supply chain, as it helps mitigate risks and avoid financial losses. Therefore, data monitoring can be an essential guideline in this area.

One of the key advantages of the supply chain with a data-driven strategy is related to the agility in decision-making, where the business becomes more proactive in addressing problems. This allows for the prediction of new scenarios and quicker responses to unforeseen situations. 

Additionally, it helps recognize and optimize processes that no longer make sense, enhancing collaboration among the links in the supply chain. Another crucial point is that the strategy helps identify new business opportunities, enabling more confident investments. 

Therefore, the data-driven concept is a significant strategic action for the supply chain, capable of making it more intelligent, efficient, and sustainable for all stakeholders in the operation, including manufacturers, retailers, distributors, and consumers. 

Key benefits of data-driven in the supply chain 

Despite the gains of this strategy, many companies still do not take advantage of this potential. 

For example, a study conducted in collaboration with Oxford Economics showed that only 23% of executives in the procurement and supply chain areas have a clear, automatic, and real-time view of overall expenses.

Furthermore, the survey also showed that 49% of managers manually analyze data to support decision-making. Hence, the data-driven concept provides a competitive advantage by making this process more accurate and faster. 

The strategy also offers other benefits to the business; here are some of them: 

Improves the consumer journey 

With so many changes in consumption patterns, data helps to better understand consumer behavior and preferences. This allows your business to combine different approaches and actions to enhance the customer journey during the sales cycle. 

Optimizes existing processes 

The data-driven strategy helps companies revisit processes to improve them and thus achieve better results. This results in more efficiency in operations, cost reductions, and increased sales. 

Identifies new business opportunities 

Data analytics can increase long-term business growth and profitability. This is because it provides insights that help identify new business opportunities and investment in new products and services, based on what consumers seek. 

Predicts changing scenarios and trends 

Monitoring your business data allows access to historical sequences where you can track the performance of an indicator over a given period. This can provide a competitive advantage as it helps predict trends and scenarios, offering greater agility and efficiency to respond to market changes. 

Encourages innovation 

Innovation can make a business stand out and ensure survival in the market, being able to explore new solutions and opportunities in the market and improve the use of tools, processes, and technologies. Therefore, data-driven innovation is a fundamental pillar for success in today’s global economy. 

Reduces unnecessary costs 

Data monitoring provides access to multiple business variables, helping identify areas for improvement to reduce operational costs and optimize expenses. Another key point is that by eliminating unwanted costs, you also increase productivity. 

Tips for applying the data-driven concept 

• Data analysis and interpretation: 

One common issue with utilizing the strategy is the underutilization of data. Therefore, it is essential to learn how to analyze and interpret data. Seek information and training to equip your team with the ability to extract strategic insights from the collected data. 

• Change in organizational culture: 

Implementing the data-driven concept requires a shift in organizational culture across all company areas. This allows for the inclusion of data-driven methodologies in how employees think and solve problems. 

Employees and leaders must be trained for this change, not only to extract the maximum insights from the information but also to understand the value of this data and how to apply it in their daily routines. 

• Invest in effective solutions: 

Technological solutions are capable of collecting, storing, and cross-referencing data. For this, the business must begin digitalizing its processes to implement the data-driven concept. 

The choice of solutions should consider the actual needs of each sector and the ability of these tools to collect and analyze information. 

Technology in the data-driven culture 

The data-driven concept offers numerous advantages and helps companies thrive in unfavorable economic scenarios or rapidly changing markets.

However, to achieve this result, it is necessary to update systems and be equipped with solutions that optimize this analysis. In this regard, technology is a great ally because it automates and optimizes processes without the need for several controls and spreadsheets. 

A technological solution appropriate for the operation helps solve significant challenges and build a more sustainable and productive supply chain. 

Would you like to understand in practice how technology and a data-driven strategy can bring more accuracy to demand planning, data integration, and visibility into inventory, performance, and sales? Talk to our experts to learn more.