Supply chain management (SCM) and business intelligence (BI): Questions about integration

There's no doubt that the power of business intelligence (BI) can greatly enhance the value of supply chain management (SCM) investments. But traditionally, SCM BI integration wasn't so easy to achieve. Analytical tools were generally not able to "plug and play" with SCM, making real integration complex and problematic.

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With the help of Simon Ellis at Manufacturing Insights and Anil Gupta of Applications Marketing Group, we have framed five key issues to consider when looking at the potential of SCM BI integration.

What is the point of integrating SCM and BI?

SCM information gains value when it is analyzed, especially if that analysis can take in a broader view of the enterprise. This kind of integration was neither common nor easy until recently, when platforms such as SAP began offering modules that could provide a BI window on SCM.

Is implementing integration between BI and SCM a fairly generic process?

You need to really think about what you are going to do. Simon Ellis at Manufacturing Insights says BI and analytics cut across three levels: strategic decision making at the top of the organization, tactical in the middle and operational at the base.

"BI and analytics cut across all three levels but will usually tend to be more for the tactical and operational level," said Ellis. "So when manufacturers integrate BI with SCM they should think about what information and insights the business will need at that level to achieve its goals."

If you are working with a solution that includes built-in SCM and BI visibility, things are usually pretty straightforward. If not, you may be looking at fairly daunting integration task, added Anil Gupta, CEO of consulting firm Applications Marketing Group. If that's the case, it may be time to consider upgrading to a more modern platform.

How do I know what to focus on in integrating SCM and BI?

If you are a make-to-order business your focus may be different than if you are a make- to-inventory business. The latter, for example, may want to focus more on doing a better job of optimizing the inventory mix and, on a higher level, to things like where warehouses should be located. In other words, know what you need and plan accordingly.

Is SCM and BI integration now a built-in feature?

Yes, in many cases. According to Ellis, most SCM applications have or are probably working on a dashboard to integrate into the BI layer. In addition, platform vendors like Oracle and JD Edwards recognize the need to have B2B intelligence across and on top of multiple systems.

What kinds of trends are emerging regarding SCM and BI?

Ellis says it may be that SCM applications will simply need to have their own layer of BI. On the other hand, there are obvious advantages in BI that can span the enterprise and include SCM.

"I'm not sure where the market will go. I think it may end up being a hybrid, with applications built in to warehouse management systems (WMS) and supply and demand planning," he said.

About the author: Alan Earls had his first exposure to computer programming on one of Digital Equipment Corp.'s PDP-8 minicomputers. He went on to serve as editor of the newspaper Mass High Tech and is the author of the book Route 128 and the Birth of the Age of High Tech, a photographic essay on a key part of Massachusetts economic history. He currently is a freelance writer, covering many aspects of IT technology and writing regularly for SearchManufacturingERP.com.