Purchase Orders 4.0: welcome to Big Data Analytics
We all know what is the purpose of a purchase order: telling to your supplier that you want to buy some items that you’ll use for your production plan (in case of raw materials) or your retail/e-commerce activity (in case of finished goods).
The items price is usually negotiated with the supplier, while the amount of each product is defined in order to cover the future demand (internal or external) for a fixed period. Something can change between one company an the other, but the main criteria are the same.
What really makes the difference between companies is the approach to the purchase order generation process and the technology they use for it. Many market leader organizations entered the world of Big Data with the purpose of empowering the understanding of their past data, their business context and improving the speed and quality of their decision processes. Vodafone started an important Big Data project in order to gain efficiency in the PO process a year ago.
Big data analytics tools provide a disruptive support for winning many operations and supply management challenges, and generating the right purchase orders at the right time is one of them. Big data analytics tools are not another business intelligence initiative, they are quite different since they deliver valuable insights and unexpected improvements to every business. Business intelligence software provides data, shaped in a desired way with a ton of KPIs showed in a dashboard, but they are still only data. What you need for your decisions is extracting meaning (value) from those data since you need to make decisions, every day.
When data analytics tools are used for generating purchase orders, we are in the field of prescriptive analytics, which is considered to be the ultimate use of Big Data.
Generating purchase order involves both a predictive phase, generating an accurate demand forecasting, and a prescriptive phase, with the decision of what, when and how much to reorder.
To conclude, what we’re talking about is empowering decision makers with analytics tools that will enable the data-driven organizations of the future. And you, are you ready for this?