Trading partner support is crucial to "big data" analysis

The daily flow of a supply chain generates large volumes of data from multiple software systems, databases, and devices. Thanks to advances in computing power and software, it is now feasible to sift through all that information stored in both structured and unstructured databases to make "aha" connections between disparate types of data. These discoveries can lead to a more efficient or better-synchronized supply chain. This process, known as "big data" analysis, has become very attractive as a way to improve supply chain operations.

Achieving the benefits of big data analysis may depend on collaboration among supply chain partners. Yet many companies are reluctant to share their data. The results of a study unveiled at CSCMP's 2013 Annual Global Conference in Denver highlighted this obstacle. Twenty-two percent of shippers and 32 percent of third-party logistics companies (3PLs) surveyed for the 2014 18th Annual Third-Party Logistics Study, headed by Dr. John Langley at Penn State, said their companies consider data to be proprietary and would not be willing to share that information with others. That's troubling, since using big data analysis to solve supply chain problems will likely require access to more than one company's data.

To persuade supply chain partners to share data, a company might have to offer incentives. One company, for instance, is allowing its suppliers to use its analytical software tools in their own organizations in exchange for providing detailed data.

If supply chain partners are still hesitant to exchange information because of confidentiality, then it may be necessary to use a neutral third party to ensure data security. The third-party trustee would then undertake the big data analysis for all of the supply chain partners involved.

Because big data analysis can unearth hidden causal relationships, it has huge potential to transform supply chains. For that to happen, though, supply chain chiefs will first have to get their supply chain partners fully on board when it comes to data sharing.