How Statistics Are Used In Supply Chain Management

How Statistics Are Used In Supply Chain Management
How Statistics Are Used In Supply Chain Management

In 2021, the waves of the pandemic started to quickly unravel supply chains across the world. Manufacturing plants slowed or even closed, ports experienced unprecedented back-ups, and transportation costs and inflation raised pricing. Before the pandemic, many large organizations were practicing “lean manufacturing”, meaning they had just enough staff, materials, and vehicles to fulfill average orders. With lockdown orders and people isolated in their homes, orders went up and the ability to adequately fill orders went down. 

Supply chain managers are crucial to improving the efficiency and speed of supply-chain processes. Equipping managers with new skills in data, analytics, and statistics can support digital acceleration efforts that will help mend the broken supply chain. 

Professionals with a Master’s in Applied Statistics are able to leverage supply chain management statistics to automate outdated processes, track the supply chain, and provide data-driven business insights that improve operational efficiencies. Learn more about how statistics are used to optimize supply chain management and discover if a supply chain career could be right for you. 

What Is The Current State Of Supply Chain Management?

In response to the pressures of the pandemic, burnout, and the collective “Great Resignation” sweeping across the United States, supply chain managers began leaving their jobs. The number of job openings for supply chain managers more than doubled between January 2020 and March 2022. Supply chain managers directly attributed their burn-out and stress to the use of outdated systems and processes in the supply chain. Although data is essential to streamline processes, sources say that 60 percent to 70 percent of an analytics employee’s time can be spent gathering data, while only 30 percent to 40 percent is dedicated to analyzing the figures and providing insights. 

The current state of supply chain management relies too heavily on manual, labor-intensive operations and lacks the data, talent, and skilling needed to modernize platforms and processes. The global supply chain needs skilled supply chain managers with experience in supply chain statistics who can lead change with data-driven decision-making.

Supply Chain Statistics and Trends

The following supply chain statistics illustrate the current state of data and technology used in the supply chain and how supply chain managers must reconfigure priorities to meet evolving customer expectations in the coming years.

  • 63% of companies do not use any technology to monitor their supply chain performance
  • 81% of supply chain professionals say analytics will be important in reducing costs
  • 79% of companies with high-performing supply chains achieve greater revenue growth than the average for their industry
  • 73% of supply chains experienced pressure to improve and expand their delivery capabilities
  • Businesses with optimal supply chains have 15% lower supply chain costs

How Can Supply Chain Management Statistics Help Resolve Challenges?  

Statistics is a field of applied mathematics that involves collecting, describing, analyzing, and applying insights from quantitative data. Statistical analysts leverage statistics from smaller sample sizes to draw accurate conclusions about large groups, trends, business processes, and more. For example, supply chain statisticians may study data related to one chain of manufacturing, distribution, and transportation to draw insights into other supply chains using the same third-party partners. There are two major branches of statistical analysis are descriptive statistics and inferential statistics, including:

  • Descriptive statistics: Describes the properties of sample and population data
  • Inferential statistics: Uses properties drawn from descriptive statistics to test hypotheses and make conclusions

Supply chain statistics can be used to improve technologies, operational processes, and business outcomes for organizations. As a result, organizations and third-party partners can expect better outcomes, including reduced costs, faster delivery, higher employee satisfaction, enhanced customer experiences, and more. Supply chain statistics and supply chain analytics allow supply chain managers to accomplish the following outcomes.

Reduce costs and improve margins

Supply chain statistics allow analysts to access vast data sets and create proactive strategies using real-time insights. This data can be used to enhance operational efficiency and therefore, reduce overall costs.

Improve risk management and compliance

Leaders can use supply chain analytics to mitigate risks, detect threats, enhance cybersecurity, and prepare for future risks before they disrupt the supply chain. Data can also be used to monitor third parties across the supply chain to ensure they are complying with regulations. 

Enable data-driven strategy

Supply chain analytics can use customer data, including online behavior, purchases, and preferences, to help businesses better predict future demand for their products and services. As a result, supply chain managers with analytical skills can help build strategies to optimize profitability by discontinuing unpopular products and increasing the supply and distribution of others. 

Create a leaner supply chain

Before the pandemic, many companies were moving towards creating leaner supply chains because a lean supply chain reduces waste and cuts costs. However, businesses need data to accurately monitor warehouse and customer demands for better-informed decisions. Supply chain statistics allow managers to identify what is necessary and what products or processes can be cut from the supply chain.

Prepare for the future

The future of supply chain management will rely on advancements in data and technology. Analysts are well-positioned to occupy leadership roles in supply chain management because they can use advanced analytics to minimize risks, reduce costs, lower environmental impact, improve employee satisfaction, and more. With supply chain statistics, the future of the supply chain will be faster, more efficient, and more environmentally conscious. 

How Statistics Are Used In Supply Chain Management

Why Should I Pursue a Supply Chain Career?

The demand for supply chain managers and procurement specialists to remedy existing challenges has given professionals with supply chain skills the upper hand in the job market. Supply chain professionals want to work for data-driven organizations with modern systems, earn high salaries that match their output, and ensure job security and stability as the workforce continues to evolve. Discover the typical roles, salary, and job outlook for supply chain managers in the United States.

Supply Chain Manager Roles and Responsibilities

Supply chain managers, also known as logisticians, are responsible for coordinating an organization’s supply chain and efficiently moving products from the supplier to consumer. They manage the entire life cycle of a product, which includes how a product is received, distributed, and delivered. The typical roles and responsibilities for supply chain managers or logisticians include:

  • Oversee a product’s life cycle from initial design to removal
  • Lead the distribution of materials, supplies, and final products
  • Communicate with suppliers and clients regularly
  • Understand their client’s needs and present business plans 
  • Review logistical functions and identify areas that can be made more efficient
  • Use supply chain statistics to create data-driven business strategies 

Supply Chain Manager Salary

According to the Bureau of Labor Statistics (BLS), supply chain managers in the United States earn approximately $77,030 per year. The highest 10 percent earned more than $122,390 and the highest-paid jobs include roles with the federal government and managers of large enterprises.

Supply Chain Manager Job Outlook

The BLS validates the growing job outlook for supply chain managers and forecasts a 30% growth between 2020 through 2030, which is much faster than the average for all occupations. With increasing rates of globalization, advancing transportation technology, and people’s reliance on direct-to-consumer shipments, the fast-paced growth in this industry will likely continue. 

Start Your Future in Supply Chain Management at Michigan Tech

Are you an analytical and mathematically inclined professional with a passion for leading people and improving business processes? Starting a career in supply chain management is an opportunity to harness the power of data and technology to streamline the world around you. In addition, you can gain access to job opportunities across all sectors, including auto, healthcare, retail, Big Tech, and more. 

The online Master of Science in Applied Statistics at Michigan Technological University can prepare you for a career path in supply chain management. In addition, Michigan Tech prepares you to use data and statistics in real-world settings by teaching you how to:

  • Develop specialized quantitative skills to meet the rising demand for data experts
  • Explore the application of advanced statistical methods like predictive modeling, statistical data mining, model diagnostics, and forecasting
  • Gain confidence and familiarity with industry-standard software including R, SAS, S-Plus, and Python
  • Enter leadership roles with business and communication skills

Is Michigan Tech the Right Fit For You?

Michigan Tech allows you to set yourself apart by building specialized, quantitative skills to meet the growing demand for statistics and data professionals with this math-driven statistics degree. Michigan Tech’s courses are also designed to accommodate working professionals and feature flexible program features, including:

  • 100 percent online; ideal for busy professionals
  • Three start dates per year
  • Accelerated format – 7-week courses
  • 30 credit hours; 10 courses
  • Earn a Graduate Certificate in Applied Statistics along the way
  • National Graduate Service Reduced Tuition Rate available to Military, AmeriCorps, and PeaceCorps personnel

Are you interested in entering the exciting field of supply chain management statisticsLearn more about MTU’s online Applied Statistics graduate degree.