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How Prescriptive Analytics Can Supercharge Your Supply Chain

Posted on: 01-08-2016 11:39:12397


To supercharge means to supply with extra power - and that’s exactly what prescriptive analytics brings to the table; power to understand, power to control and power to improve.

The emergence of prescriptive analytics goes beyond descriptive and predictive models by recommending one or more courses of action and then showing the likely outcome of each decision. During an interview with Information Week, Michael Wu, Chief Scientist at Lithium Technologies, explains that; 

"Prescriptive analytics is a type of predictive analytics… it's basically when we need to prescribe an action, so the business decision-maker can take this information and act."

There are four types of analytics, each increasing in value-add and difficulty to implement. However, the most prominent form of analytics used in businesses is still descriptive. The diagram below, recently written and published by Gartner, succinctly details the differences between the four types:



Take Control with Prescriptive Analytics

The relative merits of prescriptive analytics are clear. Prescriptive insights ensure the future performance of the supply chain is optimized by identifying bottlenecks, before they occur, and then highlighting to business users how they can be resolved. For example, knowing in advance that a batch of purchase orders are for stock with no real demand allows business users to cancel these and relocate effort elsewhere.

The Challenge with Implementing Prescriptive Analytics

There are two principle challenges facing organizations that are looking to implement this progressive form of analytics; IT infrastructure and resource expertise.

IT infrastructures can make or break supply chains - they live and die by the power of its data. Those that can extract and analyse information in a timely, relevant manner put themselves in a position whereby they can obtain extremely valuable insights concerning the health of their value chain. However, organizations that do not include prescriptive capability as part of their IT infrastructure will find it nigh-on impossible to gain the actionable insights that are required to help shape and control the future.

Despite great advances in software, the quality and contribution of the human resource in the supply chain still has the biggest impact in terms of success. Unfortunately the supply chain is currently experiencing a shortfall in talent - those with the necessary skills to fulfil these new, data-driven supply chain roles are few and far between. Organizations need to start thinking about their development programmes and how they can inspire the supply chain managers of the future. After all, these are the people that will be required to condense and communicate complex data into meaningful, real-time information across the business.


To understand the true value of your supply chain, and to then control and improve performance, you must be able to look forward not back. Harness the power of prescriptive analytics to add true value to your business and your bottom line.

Put your supply chain to the test with our Supply Chain Efficiency Quiz. Submit your answers to receive our free Prescriptive Analytics download.

Our free Future of Supply Chain Management eBook is also available to download on the Every Angle website.

Joe Edwards
UK Marketing Manager 

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