UNIT IV

HR & SUPPLY CHAIN ANALYTICS

Human Resources – Planning and Recruitment – Training and Development - Supply chain network
- Planning Demand, Inventory and Supply – Logistics – Analytics applications in HR & Supply Chain -
Applying HR Analytics to make a prediction of the demand for hourly employees for a year.

1. Human Resources

Analytics is defined as the interpretation of data patterns that aid decision-making and
performance improvement. HR analytics is defined as the process of measuring the impact of HR
metrics, such as time to hire and retention rate, on business performance.

Human resources is a people-oriented function and is so perceived by most people. But for
those who think that the HR team’s contributions are limited to extending offer letters and
onboarding new hires, human resource analytics (HR analytics) can prove them wrong. When used
strategically, analytics can transform how HR operates, giving the team insights and allowing it to
actively and meaningfully contribute to the organization’s bottom line.

What Is HR Analytics?
• To understand the essence of HR analytics and to explain how it impacts business
performance,
we asked Mick Collins, Global Vice President, Workforce Analytics & Planning Solution Strategy
and Chief Expert at SAP SuccessFactors, to break it down for us.
• “HR analytics is a methodology for creating insights on how investments in human capital
assets contribute to the success of four principal outcomes: (a) generating revenue, (b) minimizing
expenses, (c) mitigating risks, and (d) executing strategic plans. This is done by applying statistical
methods to integrated HR, talent management, financial, and operational data,” says Collins in
an exclusive discussion with HR Technologist.
• HR analytics focuses primarily on the HR function and is not – as is largely believed – exactly
interchangeable with people analytics or workforce analytics.
• The terms HR analytics, people analytics, and workforce analytics are often used
interchangeably. But there are slight differences between each of these terms. It would help you to
know the difference to be able to assess the most relevant data to their function.
The difference between HR Analytics, People Analytics, and Workforce Analytics
✔ HR analytics: HR analytics specifically deals with the metrics of the HR function, such as time to

hire, training expense per employee, and time until promotion. All these metrics are managed
exclusively by HR for HR.

✔ People analytics: People analytics, though comfortably used as a synonym for HR analytics, is

technically applicable to “people” in general. It can encompass any group of individuals even
outside the organization. For instance, the term “people analytics” may be applied to analytics
about the customers of
an organization
and not necessarily
only employees.

✔ Workforce analytics:

Workforce analytics is an

all-encompassing term referring specifically to employees of an organization. It includes on-site

employees, remote employees, gig workers, freelancers, consultants, and any other individuals
working in various capacities in an organization.
✔ In the HR context, some workforce analytics metrics and HR analytics metrics may overlap, which

is why the two terms are often used as synonyms. The goal of the two may also be the same.

✔ For instance, data on employee productivity and performance informs both HR and workforce

analytics, and the goal is to improve retention rates and enhance the employee experience.

How Does HR Analytics Drive Business Value?

HR has access to valuable employee data. How can this data be used to enable change in the

organization?

There is a great deal of discussion on replicating the consumer experience in the employee

experience. Essentially, the data on consumer behaviour and mindset can help develop strategies
to maximize sales by capitalizing on those factors. Similarly, the data useful for the HR function
can be used to improve employee performance, the employee experience, and in turn, maximize
business outcomes.

Collins offers an example of how HR analytics can be used to enhance business value. “HR

analytics could be used to measure investments in reskilling, which will deliver the right
competencies to support a new revenue model, using data-driven insights to modify the training
offering as sales results emerge.”

This is definitive granular data that can not only impact the bottom line, it can also transform

employee engagement in an organization.

“As such,” Collins continues, “you might think about the ‘ROI’ of HR analytics being that of

increasing the business value derived from using data for talent decisions.”
What Metrics Does HR
Analytics Measure?

Common metrics measured by HR

analytics
Several HR metrics contribute

to business value, but the key

question when measuring
these metrics is this: what does
the business need?

This question can be best

answered by having a conversation with business leaders. A strategic collaboration between the
C-suite and HR leaders will help determine the HR analytics strategy.

Based on the key performance indicators (KPI) of the organization, HR can then propose the

metrics that can influence these KPIs.

It is important to note that the C-suite sees a clear connection between the need for analytics and

the impact it will have on the bottom line. As an HR practitioner, you will need to build a case for
why tracking metrics related specifically to the
 For instance, the C-suite may not be interested in the number of people who have left the

organization voluntarily. What might interest them is how many of these employees were in
strategic positions or were highly skilled, the duration of their employment, what led to their exit,
the cost of replacing these employees, and finally, how all these events affect company profits.

Here are some common metrics tracked by HR analytics:

1. Revenue per employee: Obtained by dividing a company’s revenue by the total number
of employees in the company. This indicates the average revenue each employee generates.
It is a measure of how efficient an organization is at enabling revenue generation through
employees.
2. Offer acceptance rate: The number of accepted formal job offers (not verbal) divided by
the total number of job offers given in a certain period. A higher rate (above 85%) indicates a
good ratio. If it is lower, this data can be used to redefine the company’s talent acquisition
strategy.
3. Training expenses per employee: Obtained by dividing the total training expense by the
total number of employees who received training. The value of this expense can be
determined from measuring the training efficiency. Poor efficiency may lead you to
re-evaluate the training expense per employee.
4. Training efficiency: Obtained from the analysis of multiple data points, such as
performance improvement, test scores, and upward transition in employees’ roles in the
organization after training. Measuring training efficiency can be crucial to evaluate the
effectiveness of a training program.
5. Voluntary turnover rate: Voluntary turnover occurs when employees voluntarily choose
to leave their jobs. It is calculated by dividing the number of employees who left voluntarily
by the total number of employees in the organization. This metric can lead to the
identification of gaps in the employee experience that are leading to voluntary attrition.
6. Involuntary turnover rate: When an employee is terminated from their position, it is
termed “involuntary.” The rate is calculated by dividing the number of employees who left
involuntarily by the total number of employees in the organization. This metric can be tied
back to the recruitment strategy and used to develop a plan to improve the quality of hires
to avoid involuntary turnover.
7. Time to fill: The number of days between advertising a job opening and hiring someone
to fill that position. By measuring the time to fill, recruiters can alter their recruitment
strategy to identify areas where the most time is being spent.
8. Time to hire: The number of days between approaching a candidate and the candidate’s
acceptance of the job offer. Just like time to fill, data-driven analysis of time to hire can
benefit recruiters and help them improve the candidate experience to reduce this time.
9. Absenteeism: Absenteeism is a productivity metric, which is measured by dividing the
number of days missed by the total number of scheduled workdays. Absenteeism can offer
insights into overall employee health and can also serve as an indicator of employee
happiness.
10. Human capital risk: This may include employee-related risks, such as the absence of a
specific skill to fill a new type of job, the lack of qualified employees to fill leadership
positions, the potential of an employee to leave the job based on several factors, such as
relationship with managers, compensation, and absence of a clear succession plan. HR
analytics can be used to measure all these metrics.
Broadly, the data required by an HR analytics tool is classified into internal and external
data. One of the biggest challenges in data collection is the collection of the right data and
quality data.

Common data sources HR

analytics solutions
I. Internal data
Internal data specifically refers to data obtained from the HR department of an organization.
The core HR system contains several data points that can be used for an HR analytics tool.
Some of the metrics that an HRIS system contains includes:
1. Employee tenure
2. Employee compensation
3. Employee training records
4. Performance appraisal data
5. Reporting structure
6. Details on high-value, high-potential employees
7. Details on any disciplinary action taken against an employee

The only challenge here is that sometimes, this data is disconnected and so may not serve as
a reliable measure. This is where the data scientist can play a meaningful role. They can
organize this scattered data and create buckets of relevant data points, which can then be
used for the analytics tool.
II. External data
External data is obtained by establishing working relationships with other departments of
the organization. Data from outside the organization is also essential, as it offers a global
perspective that working with data from within the organization cannot.
1. Financial data: Organization-wide financial data is key in any HR analysis to calculate, for
instance, the revenue per employee or the cost of hire.
2. Organization-specific data: Depending on the type of organization and its core offering
(product or service), the type of data that HR needs to supplement analytics will vary.
For example, says Collins, “HR leaders at a global retailer should power their analytics
engine with store revenue and costs and customer experience data, whereas HR at a
construction company might pursue operational – health and safety – data and data related
to contingent labor costs.”
3. Passive data from employees: Employees continually provide data that is stored in the
HRIS from the moment they are approached for a job. Additionally, data from their social
media posts and shares and from feedback surveys can be used to guide HR data analysis.
4. Historical data: Several global economic, political, or environmental events determine
patterns in employee behaviour. Such data can offer insights that limited internal data
cannot.
For example, the recession in 2008 was a global event that changed the way employees
perceived jobs or “work.” The freelance, start-up and gig economies took off as people
continued to lose their jobs. Data from such a critical historical event can help predict how
the workforce may react to similar shifts in the future. It can then be used to identify trends
in the current workforce and predict voluntary and involuntary turnover.

How to Get Started with HR Analytics

For HR leaders keen to get started with using HR analytics for data-based decision making,
here are some tips:

I. Create a collective mindset

Before the operational and mathematical aspect can kick in, HR leaders must prepare
their teams and organizations for a workflow-driven by analytics.
While the discussion with the C-suite for the need for analytics is one part of the change,
the other is preparing your team to deal with the amount of data that they will now be
using to measure the change.
This is a crucial aspect of HR’s digital transformation as well as company-wide digital
transformation. Getting the team started on small projects and asking them to create the
reports that they will
discuss with business
leaders is a good way
to begin.
‘

II. Bring in data scientists

The data scientist is expected to become an integral part of HR teams. They are best
suited to assess the viability of an analytics solution. They can also ensure the robustness of
the statistical modelling and predictions.
As Collins says, “data scientists will play an invaluable role in creating a culture of analytics
across HR. As the role of HR business partners and generalists evolves to include skills such
as data strategy, analysis, and communication (articulating ‘the story behind the science’),
the data scientist will serve as the coach, mentoring their colleagues across HR in how to
understand, and apply, the insights.”

III. Start small

A great technique to convince stakeholders that HR analytics can drive business value is to
first implement a small project successfully. Called “quick wins,” these projects can deliver
tangible results in a short amount of time with high impact.

IV. Get clearance from the legal team

The sort of data collection that HR analytics uses is governed heavily by compliance laws.
Some legal considerations to keep in mind when implementing an HR analytics solution are:
Employee privacy and anonymity
Consent from employees about the amount and type of data being collected Establishing
the goal of data collection and informing employees accordingly IT security when using
third-party software to run HR analytics
Location of the HR analytics vendor – with whom the data will be stored –
and their compliance with local laws
Collaborate with the legal team of your organization to ensure ethics and compliance norms
are followed.
• Choose an HR analytics
solution

The key features of an HR analytics solution

1. They answer the business questions the C-suite asks. This may require that you invest in a
solution to address each question, leading to investments in multiple analytics solutions
for granular data on each question. Alternatively, you may choose a unified solution that
can assess multiple metrics to answer each business question.
2. They are easy to use by individuals who are not data scientists. An accessible solution
created for laypersons is ideal when they want to assess any one or more metrics without
interrupting the workflow of the data scientist.
3. They are cloud-based rather than on-premise. A cloud-based solution also aids
accessibility without heavy IT integration. This grants HR the autonomy to use the
solution as and when needed.
4. They are powered with statistical analysis and machine learning technology. Big data
platforms require advanced data management systems powered by machine learning and
 natural language processing. This allows the technology to learn and reason
autonomously, revealing insights that data scientists can then analyze.
5. They are based on predictive analytics. “[Predictive analytics is] the practice of extracting
information from existing data sets to determine patterns and forecast future outcomes.
Analysts use statistical methods to forecast future alternatives – will the current
termination rate continue at the same pace or might we expect a surge of exits as the job
market strengthens?” explains Collins.
6. They are powered with visualization technology. A visual representation of vast amounts
of data can allow for better understanding of trends and events. The complex data
processed through an analytics engine requires advanced visualization software, as it
cannot be presented in simple charts and presentations.
7. They are available through a subscription model. Subscription models of software as
service (SaaS) platforms are useful because they easily allow you to access the latest
upgrades in technology. They also eliminate the significant upfront expense of purchasing
an analytics solution and may be a more cost-efficient way of investing in analytics.

TWO MARKS :

DETAIL :

2. What is Human Resource Planning

Human Resource Planning (HRP) is the process of forecasting the future human resource
requirements of the organization and determining as to how the existing human resource
capacity of the organization can be utilized to fulfill these requirements. It, thus, focuses
on the basic economic concept of demand and supply in context to the human resource
capacity of the organization.
 It is the HRP process which helps the management of the organization in meeting the
future demand of human resource in the organization with the supply of the appropriate
people in appropriate numbers at the appropriate time and place.
Further, it is only after proper analysis of the HR requirements can the process of
recruitment and selection be initiated by the management. Also, HRP is essential in
successfully achieving the strategies and objectives of organization.
In fact, with the element of strategies and long-term objectives of the organization being
widely associated with human resource planning these days, HR Planning has now
became Strategic HR Planning.
Though, HR Planning may sound quite simple a process of managing the numbers in
terms of human resource requirement of the organization, yet, the actual activity may
involve the HR manager to face many roadblocks owing to the effect of the current
workforce in the organization, pressure to meet the business objectives and prevailing
workforce market condition. HR Planning, thus, help the organization in many ways as
follows:

HR managers are in a stage of anticipating the workforce requirements rather than getting
surprised by the change of events
Prevent the business from falling into the trap of shifting workforce market, a common
concern among all industries and sectors
Work proactively as the expansion in the workforce market is not always in conjunction
with the workforce requirement of the organization in terms of professional experience,
talent needs, skills, etc.

An HR Planning process simply involves the following four broad steps:

Current HR Supply: Assessment of the current human resource availability in the
organization is the foremost step in HR Planning.
It includes a comprehensive study of the human resource strength of the organization in
terms of numbers, skills, talents, competencies, qualifications, experience, age, tenures,
performance ratings, designations, grades, compensations, benefits, etc.
 At this stage, the consultants may conduct extensive interviews with the managers to
understand the critical HR issues they face and workforce capabilities they consider basic
or crucial for various business processes.

An HR Planning process simply involves the following four broad steps:

Current HR Supply: Assessment of the current human resource availability in the
organization is the foremost step in HR Planning.
It includes a comprehensive study of the human resource strength of the organization in
terms of numbers, skills, talents, competencies, qualifications, experience, age, tenures,
performance ratings, designations, grades, compensations, benefits, etc.
At this stage, the consultants may conduct extensive interviews with the managers to
understand the critical HR issues they face and workforce capabilities they consider basic
or crucial for various business processes.

Future HR Demand: Analysis of the future workforce requirements of the business is the
second step in HR Planning.
All the known HR variables like attrition, lay-offs, foreseeable vacancies, retirements,
promotions, pre-set transfers, etc. are taken into consideration while determining future
HR demand. Further, certain unknown workforce variables like competitive factors,
resignations, abrupt transfers or dismissals are also included in the scope of analysis.
Demand Forecast: Next step is to match the current supply with the future demand of
HR, and create a demand forecast. Here, it is also essential to understand the business
strategy and objectives in the long run so that the workforce demand forecast is such that
it is aligned to the organizational goals.
HR Sourcing
Strategy and
 Implementation: After reviewing the gaps in the HR supply and demand, the HR
Consulting Firm develops plans to meet these gaps as per the demand forecast created by
them.
This may include conducting communication programs with employees, relocation, talent
acquisition, recruitment and outsourcing, talent management, training and coaching, and
revision of policies. The plans are, then, implemented taking into confidence the mangers
so as to make the process of execution smooth and efficient.
Here, it is important to note that all the regulatory and legal compliances are being
followed by the consultants to prevent any untoward situation coming from the
employees.
Hence, a properly conducted process of HR Planning by an HR Consulting Firm helps the
organization in meeting its goals and objectives in timely manner with the right HR
strength in action.
3. Training and Development
• Training and Development is a subsystem of an organization which emphasize on the
improvement of the performance of individuals and groups. training is an educational
process which involves the sharpening of skills, concepts, changing of attitude and gaining
more knowledge to enhance the performance of the employees. Training is about
knowing where you are in the present and after some time where will you reach with
your abilities. By training, people can learn new information, new methodology and
refresh their existing knowledge and skills. Due to this there is much improvement and
adds up the effectiveness at work. The motive behind giving the training is to create an
impact that lasts beyond the end time of the training itself and employee gets updated
with the new phenomenon. Training can be offered as skill development for individuals
and groups.
• Organizational Development: Organizational Development is a process that―strives to
build the capacity to achieve and sustain a new desired state that benefits the
organization or community and the world around them.
Development is made to answer the training problems:
TRAINING

• Training is meant for operatives

 • It is reactive process
• AIM: To develop additional skills
• It is short term process
• OBJECTIVE: To meet the present need of an employee
• Initiative is taken by the management.

DEVELOPMENT

• Development is meant for executives

• It is pro- active process
• AIM: To develop the total personality
• It is continuous process
• OBJECTIVE: To meet the future need of an employee
• Initiative is taken by an individual Importance of Training and Development:
• Optimum utilization of Human resources
• Development of skills
• To increase the productivity
• To provide the zeal of team spirit
• For improvement of organization culture
• To improve quality, safety
• To increase profitability
• Improve the morale and corporate image

Reasons to go for Training and Development:

• When management thinks that there is a need to improve the performances of

employees
• To set up the
benchmark of
improvement
so far in the performance
improvement
effort
• To train about the
specific job responsibility
• To test the new
methodology
 for increasing the productivity.

ORGANIZATION DEVELOPMENT:

AN INTEGRATED APPROACH

This model depicts three basic strategies to achieving successful organizational change.
The three strategies are not mutually exclusive and all three could be used concurrently to
bring about systemic change. One or the other, however, may be more conducive to the type
of change needed in a particular organization. For this purpose, they are shown as being
three different strategies.
• The Behavioural Strategy takes an employee training and development approach. It
posits that employee learning would bring about the organizational change needed.
Learning would consist of gaining knowledge, skills and new attitudes, which would lead
to new behaviours. These new behaviours would then lead to improved quality and
performance
• The Structural Strategy takes an organizational design approach. It posits that
organization structure and design should be aligned (or realigned) consistent with the
vision, direction, mission, or goals of the organization. The Structural Strategy would
incorporate changes in the organization chart. Employees, units, divisions, and
departments could be realigned to optimize resources. For example, hierarchies could
be flattened and decision-making could be placed closer to the point of action. Significant
work could be done in chartered, self-directed teams. Such realigned relationships would
lead to improved quality and performance.
• The Technical Strategy takes a continuous improvement approach. It posits that
processes in the areas of customer focus, product and service delivery, support, and
supplier and partnering could be improved. This strategy also maintains that technology
be continuously updated and aligned with the processes of production and service to
make work more efficient and effective. Continuous process improvement with aligned
technology would lead to improved quality and performance. Training Best Practices and
Organizational Success
Some of the best companies today realize that continuous learning and development is
key to organizational success. For this purpose, professional trainers may be hired to conduct
training sessions on specific topics. These trainers have the responsibility to develop training
strategies, which help in knowledge retention and enable the employees to achieve success
in the workplace. Trainers need to be mindful of some training best practices to accomplish
this goal. This article will review some of the best practices that should be followed in the
training industry. Some of the most effective learning and development programs today
include the following best practices:
• 1. Training programs should be strategy-driven Trainers should be well aware that all
training and development programs need to be in line with the organization's overall
strategic goals. They should closely interact with the clients to ensure that the designed
and implemented programs help to achieve business success by overcoming an area of
improvement. The trainers should align the learning objectives and business objectives to
make the training more relevant.
• 2. Set criteria to define success The success of training programs should be measured
against different criteria. Training programs should result in a return on investment, either
in the long term or the short term. Professional trainers should clearly outline how the
training initiatives help an organization fully achieve its goals. The timeframes should be
identified at the beginning, and a re-evaluation of the programs should be conducted on a
regular basis.
• 3. Training programs should be supported by key strategies, systems, structures, policies
and practices When designing a training program, the trainers should ensure that
learning is aligned with and directly supported by organizational structures, lines of
authority, decision-making, values and other business practices. This would help to
establish boundaries and reinforce the desired results.
• 4. Training should be driven through many channels Some of the best trainers in the
industry help the organizations to explore and utilize different platforms to reinforce
learning outcomes and ensure that people get the right skills at the right time, in the right
way and at the right cost. They closely liaison with the companies to tap methods, such as
classroom lecture and role-plays, on-the-job application, e-learning, and use of other
technology and support tools to match learning styles of each employee. Each approach
offers multiple benefits and should be looked into for delivery of effective training
programs.
• 5. Learning by doing and establishing shared accountability Some of the best programs
enable the employees to maximize their potential through self- directed training and
 development. By identifying their own needs, creating individual learning plans and
seeking learning opportunities, employees are encouraged to take responsibility for
learning and apply the learned concepts at work. By experimenting and learning by doing,
an employee may find himself to be more effective at work and contribute to
organizational success. Many trainers recognize that learning is built around action rather
than theory. Training best practices can vary depending upon the specific situation,
culture and maturity of each organization. However, the best trainers ensure that they are
well aware of the training needs before implementing any initiative. The industry is built
around the belief that the process of doing, reflecting and learning is a continuous one.
Everyone who follows this blog knows that I tend to take a softer approach to training
that at times may not seem as traditional or as typical of the training principles you are
taught in school. I also don‘t tend to weigh my page down with off-the-shelf products,
although guest writers are more than
welcome to do so as long as they write generically about all such products. This blog
is not to promote, but to share training ideas and best practices. Putting people first is a part
of any training for me, but there is a business side to it as well that we cannot ignore. Our
clients are profit-oriented unless they are non-profit, but they too are still looking at a
bottom line.

4. Supply chain network (SCNet)

A company's supply chain network impacts how quickly products get to the customer.
Once implemented, it's hard to make changes, which can affect multiple locations and
departments. Therefore, a thorough review of the plan is required before modifying
processes or locations and resources.

An optimal supply chain network has to fit with the organization's long-term objectives.

What Is a Supply Chain Network?

 A supply chain network describes the movement of both materials & information,
assessing the programs and policies that impact the supply chain. Most business units in
an organization have an interest in efficient supply chain operations. A supply chain
network design documents these interactions, tracks improvements and sets long- term
goals.
How Does a Supply Chain Network Work?
By analysing their supply chain network (SCNet), companies can collect quantitative
measures that aid strategic decision-making. The supply chain network takes into account
plant locations and capacity, possible pricing level changes, distribution locations and
capacity, supplier and product factors, inventory management and customer service impacts.
Companies implement supply chain network designs to maximize profits and stay
ahead of competitors. A key factor is how well the existing supply chain integrates changes.
New processes may mean substantial infrastructure changes. The question becomes: is it
worth it? Drivers that impact the supply chain include the following:
Acquisitions
Carbon footprint reduction Changing customer base Consolidation/Deconsolidation
Divestment
Expansion
Growth
Inventory
Mergers
New markets New product lines Sourcing
Strategic planning

Supply chain networks model the existing supply chain and a future state that includes
improvements that can lower costs, save time and get products to consumers faster.
Resource and location constraints may be addressed in the form of new warehouses and
suppliers.
SCNet designers attempt to deliver the required services as cost-effectively as possible.
Supply chain networks help decision-makers determine the best sourcing and inventory
practices to meet demand. Ultimately, an effective SCNet creates efficiencies, meets or
exceeds customer demand, and provides the lowest costs via an efficient network.
Outcomes and Benefits of SCNet

Implementing a supply chain network has numerous positive outcomes. Your company
can reduce supply chain costs, improve services and increase return on investment. In
order to mitigate the risk of making global changes to your supply chain, carefully weigh
the cost of the changes against the benefits of making them. If your existing supply chain
is fragile, it may be worth a temporary disruption to develop a supply chain that can
support growth initiatives in a sustainable way.
The potential benefits are high. An intelligent supply chain network can reduce the total
cost of the supply chain by weeding out inefficiencies. A well-documented process creates
transparency that improves service level performance. Additionally, SCNets provide a
reusable tool for business changes and a template for testing different operating models.

SCNet Elements and Optimization

Supply chain network optimization allows companies to pit current and future state
models against one another. Using several "what-if" scenarios, these models help
planners design strategic goals and realistic metrics. At the end of the day, SCNet
optimization lets companies move forward with confidence once a final plan is adopted.
Before greenlighting an SCNet optimization plan, leaders should gauge their comfort level
with the documentation of the current system and the levers being manipulated in the
new model. By conducting thorough analyses and scenario-based testing, the entire
organization can understand the individual mechanisms and their true impact.
Consequently, you can make sure that you choose the right drivers to obtain the ultimate
goals.
You can create models that include the cost of the current supply chain as a basis of
comparison to your new design. Next, model the what-if scenarios to determine if the
new network has achieved the goals as anticipated. By carefully evaluating the model and
the supply chain data, you can see the gaps in your distribution channels and other supply
chain components. This is particularly valuable for B2C businesses and start-ups.
Elements of a supply chain network include:

Risk analysis: Gain perspective on changes to your supply chain, including unexpected
hiccups or disruptions.
Complex problem solving: Design a methodology to find the best routes to customers
based on multichannel e-commerce or marketplace locations.
Project mentoring: Provide a project framework that helps internal resources identify the
best software for your supply chain.

Example of a Supply Chain Network

A supply chain network for an orange juice producer might consist of three sections:
Inbound Logistics
This flowchart could show the Orange Grove->Orange Juice Plant->Orange Juice Bottling
Plant workflow. Fuller details would include a secondary/separate workflow for how the
bottles are made. This might include the oil field where the raw material is produced, the
tree plantation producing paper for the labels and various organizations involved such as
the label printer and paper manufacturer.
Internal Logistics
This would include the organization distributing the orange juice to retailers and grocery
stores. This includes the company HQs and satellite locations.
External Logistics
This would include the regional and national distributors and the shops selling the orange
juice.
Developing a supply chain network allows companies to better understand their current
supply chains and to document ideas for improvement that can be well-vetted prior to
implementation.
Often organisations focus only on their organisation; what they produce or provide and
not what the end customer receives. Looking at a supply chain network enables firms to
look at the overall movement of materials/information from start to end, allowing
organisations to see the value in creating partnerships; and the value in working together
to ensure the best possible value is provided to the end-customer.
 Supply chains and supply networks both describe the flow and movement of materials &
information, by linking organisations together to serve the end-customer.
Network’ describes a more complex structure, where organisations can be cross- linked
and there are two-way exchanges between them; ‘chain’ describes a simpler, sequential
set of links (Harland et al., 2001)
In order to understand a supply chain network; we need to understand what a supply
chain is. A supply chain is a series of processes linked together to form a chain.

Supply Chain Example: for apple juice production.

The above diagram is an example of a simplified supply chain; the supply chain shows the
movement of material flow from the Apple farm right through the production process to the
end users.

Supply Chain Network Example: For Apple Juice Organisation

A supply chain network shows the links between organisations and how information and
materials flow between these links. The more detailed the supply chain network the more
complex and web like the network becomes.
The above example demonstrates a simplified version of a supply chain network of an
Apple Juice organisation. The organisation will have an upstream network and a
downstream network.
Organisations are linked via two types of flows:
To get a complete picture of an organisations supply chain network; information &
material flow should be mapped. Inefficiency can then be located and removed.
Material flow: Is the movement of goods from raw primary goods (such as Wool, Trees
and Coal etc.) to complete goods (TV’s, Radios and Computers) that are to be delivered to
the final customer.
Information flow: Is the demand from the end-customer to preceding organisations in the
network.
Supply Chain Network: Information flow, Flow of Materials
If a focal firm provides their suppliers with their sales data/ forecasting demand
information; their supplier will be able to reduces costs (such as over production waste)
and improve prices.
In order to better serve your end customer, it is important to develop strong partnerships
within your supply network which has a flow on effect to your end customers whether
you are a manufacturer, distributor or retailer. Better communication will increase
efficiency and productivity. Trust is the core ingredient to developing better
communication and relationships.
Planning and Recruitment
Here’s an overview of the steps.
Read and understand your business plans
Scope out your DDHR (data-driven HR) project Define your primary metric
Define your secondary and supporting metrics Articulate the ‘What’
Articulate the ‘Why’ behind the ‘What’
Drive Decisions, Case for Change, Targets and Change Plans
Implement, Measure Success, Stabilize and Realize Value

1) Read and Understand Your Business Plans

It may seem obvious... but... have you read your most up-to-date corporate business plan
or objectives? If you don't have access to it or don't have one, have you interviewed
members of your executive team to understand the overall direction?
If you haven't, how will you be able to build people and organizational capabilities?
HR becoming data-driven is about achieving better balance with your qualitative and
quantitative data (i.e. gut feel and hard facts). This balanced approach needs to be
applied within the context of something relevant, juicy and purposeful for the
organization – whether that is a specific Line of Business (LoB) that you serve, or a larger
corporate objective.
HR must understand the Corporate and Business Unit Plans, understand what this means
in terms of people programs and capabilities, and must identify, scope, and deliver
Data-Driven HR projects which will help you achieve these business plan outcomes.

2) Scope Out Your Chosen DDHR (data-driven HR) Project

Your scoping exercise should include these activities:

Read Your Corporate Business Plan
Read Your Line of Business Unit Plan (the plan for your direct client)

Discuss and "play-back" your key observations to the management team/LoB to ensure
you've created sufficient understanding
 Ensure and articulate how your first DDHR Project supports Key Areas of Focus for your
client (these could be from the Corporate objectives, LoB objectives, or a combination)
✔ For your first DDHR Project, research, brainstorm and document the following - to
the best of your ability:
● The specific objectives, outcomes and metrics related to the project
● The people and organizational requirements/capabilities for delivering on this
● Your gaps when it comes to all aspects of HR & people programs (i.e. if you
need to "improve close rates in our Sales Team" and you don't have a best
practice Sales Closing Training Course available, then this would be considered
a "gap“)
● The risk, implications and business impacts of not closing that gap

Brief your LoB Lead/management team on your findings from the above activities
gain deeper understanding, alignment and support for your project. If you've got it right,
you should have raised the enthusiasm and interest of your clients.
Now you've put some boundaries around your ONE Data-Driven HR Project and
understood it in greater detail with your organizational or LoB counterparts - you must
now define the project in more detail - and execute. There are several steps to this - steps
that dig into the data and metrics you're going to capture.
3) Define Your Primary Metric
You need to define something we call a Primary Metric which captures the essence of
what your project is focused on accomplishing. When defining the Primary Metric,
it's advised to be as specific, and detailed as possible - as this is the foundation of all
subsequent steps.
You may however decide, at this point in time, to keep this directional in nature (i.e.
decrease or increase) and not get into specific targets. This is all good. Targets can
be estimated/set in a subsequent stage when you have access to hard data.
Here's an example:
"Decrease Turnover of our Top Performers (Rated Outstanding and Exceptional) in
their First Year of Tenure in the Sales Department “
Ensure you define the nuances of your Metric such as... Do you mean First Year in the
company, or First Year in Sales? Do you count a top performing employee who spent
 3 years in Marketing, then transferred to Sales and then left the company 9 months
into their Sales role?
Quantify (state the current facts regarding) your Primary Metric in terms of both rate
and magnitude:
In 2019 our Top Performer Turnover Rate for those employees in their First Year of
Tenure in the Sales Department was 23%
In 2019, this represented 17 EEs departing on a total segment of 77 EEs
To achieve a comprehensive understanding, your Primary Metric needs to be looked
at from many lenses - this means slicing and dicing your data across the data
dimensions which are available to you. If you are fortunate to have powerful
workforce analytics or BI tools, this will be simple. If you are calculating in a
spreadsheet, this will be more challenging so be prepared to dig in and spend some
serious time on this.

4) Define Your Secondary or Supporting Metrics

Your Secondary or Supporting Metrics are the additional data dimensions and
segmentation which may be important to your analysis. The extent of these Secondary
Metrics and segmentation is really up to you - but in our experience, this is where the
most insightful observations and story lines can come from.
For example: Segment and slice your data so you can understand if there are any
anomalies based on demographics, location, manager, manager's attendance at a People
Manager training course, recruitment channel, onboarding survey results and
engagement, among other things.
You’re only limited by the data you have access to and your ability to connect it. Again, if
you’re working with a people analytics partner or use a powerful BI tool this will be
relatively easy. If you don’t and you’re dealing with spreadsheets and disconnected
systems, roll up your sleeves and tuck in… you’ll need time and some analytics expertise
on your side.
5) Make Quantitative Observations - Articulate "The What"
Using your Secondary Metrics, continue segmenting and analyzing your data, making
observations focused on anomalies (outliers in your data, hot spots where acceptable
thresholds are exceeded, or where the sheer mass/magnitude of an issue can represent
an opportunity, or lack thereof).
6) Articulate “The Why Behind The What"
At this point, you'll have a collection of facts compiled about Top Performer Turnover in
Sales, for employees in their First Year of Tenure.
Armed with this multidimensional and segmented analysis, you must dig deeper into the
story lines, understand the context in which they occurred, and ask "why" to those who
are best positioned to articulate logical reasons and hypotheses.
This is qualitative understanding.
This can be accomplished through a variety of techniques. For example, you may choose
to run some focus groups with other Top Performers in Sales, those who are in their
second year of tenure who can shed some light on the experience, you may want to
implement or harvest data from your Onboarding Experience Survey, you may want to
have small group conference calls, 1 on 1's or water cooler/off the record conversations
with Managers, etc. Whatever the approach, this is focused on getting to the lived
experiences of those involved, bringing the numbers to life and providing the context.
The objective here is to spend some time digging deep so you can balance your facts with
context, and be prepared to tell the story in a more complete fashion, with as much
texture as possible.
7) Drive Decisions, Case for Change, Targets and Change Plans
In our opinion, it's futile and pointless to embark on Step 1 of this process unless you are
willing to drive a decision, and implement change.
GUT CHECK: If you don’t expect your data-driven HR efforts to drive decisions and change,
then seriously think about stopping now and focusing on something that the business, or
your HR team, would value.
Decision making must be done in collaboration, consultation and with the support of your
LoB client. It's therefore critical, that you've been engaging with your LoB clients
throughout the prior steps - and have access to the facts, context and opinion.
 Decision making for the Line of Business is all about Return on Investment (ROI) - which
requires the development of a Case for Change. Some might call this a Pitch Deck, others
a Business Case. Regardless, the Case for Change is a 10-15 slide summary and
recommendation which is structured as follows:
Executive Summary Background and Context
Current Environment/Issue Identification (Facts andContext)
The Opportunity
Proposed Solution(s) and Targeted Outcomes Costs and Benefits (ROI)
Project/Implementation Approach
Resources Required Recommendation
Next Steps
The goal is to convince your stakeholders and impacted partners that change is needed
and helps them accomplish their goals.

8) Implement Change Plans, Stabilize, Measure Success and Realize Value

For more information on how to implement and create sustainable change, please refer
to Playbook 4 where we go deep on this topic.
Remarkably, “Business Case Realization” is incredibly easy to ignore - in fact, we are often
systematically forced to move onto the next activity before we have captured results - and
metaphorically “banked the winnings”.
You must try and avoid this pitfall at all costs:
Remember, the only reason why you’ve been trusted to invest in data-driven HR is to
chase juicy business outcomes.
You’ve sold this initiative on a business case - so you must spend some time quantifying
and counting your accomplishments and success - and sharing that with those that
matter.
Simply determine the ROI of your initiative

On one side of the ROI equation, you will articulate the “New Value” you have created
through this initiative.
 On the other side of the equation, articulate the Cost of the initiative (days effort in
working this project can be converted to a daily internal loaded cost rate). You will use
this as your denominator.
Subtract the Cost from the New Value and call the result your “Net New Value” - use this
as your numerator.
Divide the Net New Value by Cost and multiply by 100.
You now have your Return on Investment for this data-driven HR project.

5. Planning Demand
How Demand Planning Can Improve the Supply Chain What is Demand Planning?
Demand planning is a supply chain management process of forecasting, or
predicting, the demand for products to ensure they can be delivered and satisfy customers.
The goal is to strike a balance between having sufficient inventory levels to meet customer
needs without having a surplus. A wide variety of factors can influence demand, including
labour force changes, economic shifts, severe weather, natural disasters or global crisis
events.
What are the Aspects of Demand Planning?

Demand planning spans several aspects, with the three primary areas being:
Product Portfolio Management
Product portfolio management oversees the overall product lifecycle, beginning with
the introduction of a new product through to its end-of-life planning. In many cases, product
lines are interdependent, and understanding how new products may influence demand for
other products is important to understanding the overall product mix required to maximize
market share.
Statistical Forecasting
Using historical data, statistical forecasting creates supply chain forecasts with
advanced statistical algorithms. In this area, it is important to determine the accuracy of
each model, identify outliers and exclusions and understand assumptions. Seasonal shifts
(think the spurt of holiday shopping that occurs between October and December for
retailers, or the boost in yard equipment sales in spring months) can also be assessed with
statistical forecasting.
Trade Promotion Management
Trade promotion or marketing events can influence demand, especially in the retail
industry. The goal of a trade promotion is to help a brand connect with a customer, often
through an in-store giveaway, discount, or promotion, and these events can impact the
demand for a product.
Why is Demand Planning Important?
If product isn’t available for customers to purchase because it’s out of stock,
businesses lose out on revenue, and over time, they could lose the customer to a
competitor. On the other hand, sitting on a slew of unused inventory incurs both space and
production costs unnecessarily. With demand planning, business leaders can stay in front of
market shifts and make more proactive decisions, while being responsive to their customers’
needs.
Demand planning is a multi-step process, dependent on the right tools, information
and processes. Often, there can be unique nuances in the process, based on product
positioning, inventory needs and organizational goals, but some best practices to keep in
mind include:
Implement the Right Software
There is a plethora of options when it comes to enterprise resource planning (ERP)
systems, so choosing the right one can be tricky. When considering ERP software, it’s
important to examine the ability of the tool to handle forecasting nuances as well as the
provider’s reputation, reporting capabilities, and the transparency and reliability of the
forecasts it produces.
Gather and Prepare Data
Data drives demand planning, now more than ever. Real-time visibility into inventory
movements coupled with metrics reports that paint a clear picture and data mining and
aggregation that can identify areas for improvement or reaction can help to create more
agile process modelling.

Define Process Models

Lacking a defined process for a demand planning cycle leads to chaos. Confusing process
with information that is simply a set of widely known facts around an organization is all
too common, making it difficult to hold anyone accountable, and thus hurting overall
performance. For most companies, the steps in the demand planning process go
something like this:
Preparation of data Initial forecasting
Incorporation of market intelligence
Consideration of sales goals and financial reports to reconcile bottom-up forecasts with
top-down financial and sales forecasts
Refine a final forecast
Performance monitoring based on real-time analytics
Implement and Monitor
Successful demand planners usually design a pilot version of the plan using historical
data, or descriptive analytics, as a basis. They also make regular adjustments and have a
team of people dedicated solely to devising the plan, implementing it, reducing error and
bias, and designing processes for execution.
The Future of Demand Planning in the Supply Chain Like many business needs, supply
chain and demand planning are going digital. Advances in applications of machine learning
within the supply chain are making it possible to adapt and update forecasts in real time,
allowing inventory to run leaner, without missing the mark on demand
For supply chain professionals, understanding how to use digital enterprise
architectures and implementing artificial intelligence and machine learning programs that
can help optimize a lean, agile and data-driven approach will reveal new ways to cut costs in
operations, boost revenue and offer a greater competitive edge.
A better-connected supply chain means demand planning can be conducted even
more in the moment. When implemented well, demand planning can be a pivotal process in
boosting a supply chain’s profitability.
 Inventory and supply chain management methods are a major component of
business strategy and profitability. Without them, companies cannot manage their
inventory effectively and can incur additional costs.
The increase in costs can be incurred with increased warehousing requirements or
lost revenues due to dead stock. Human and financial resources dedicated to inventory
management can also represent a significant expense.
Poor inventory and supply chain management can hurt a company's profitability
through the strain that inefficient inventory puts on its cash flow.
It can also lead to dissatisfied customers, who may seek alternative suppliers as a result of
the continual unavailability of certain products.
Adopting an optimal inventory management strategy designed for your specific
challenges is essential in reducing costs and risk, and more importantly, ensuring the long
term future of your business.
Good inventory management will allow you make better decisions. It will also give
you the ability to be more responsive to customer demand and ever changing market needs.
In this article, we will demonstrate the different inventory and supply chain management
methods available, to ensure you optimise your logistics and improve the profitability of your
business!
6. Inventory and supply management:
Inventory management controls all stock within a company. Supply chain
management manages the process from supplier to delivering the product to the customer.
Warehouse management is a part of inventory control and focuses on stock in a specific
location.

First of all, it is important to get to know some of the key terms and definitions
1 - Inventory management strategies
To choose the best inventory and supply chain management method, there are two
options available:
an empirical strategy
a forecast strategy
 An empirical inventory management strategy is based on sales history. By establishing
the average sales of each unit, their frequency of removal from stock and any
consumption peaks, it is possible to anticipate the future requirements. An empirical
strategy is based on what has happened in the past.
A forecast strategy also takes into account sales history, but includes macro influences –
those that take place outside of the company: things like market and sector trends,
changes in consumer behaviour, etc.
This type of strategy is essential to manage the stock of products that are highly
susceptible to seasonality or whose sale is typically irregular. For this to be useful, it
requires the availability of reliable market information and indicators. 2 -
Inventory and supply management - what is it?
Inventory management refers to the methods and practices used to determine the
quantities and frequency of purchases of a company's products.
The aim of this set of measures is to establish the best compromise between storage and
delivery costs, in order to be able to meet market demand.
To be effective, inventory management involves documented tracking of products
(quantity, location, condition, etc.).
Supply is what keeps the chain moving. It can be anything from providing the company
with the raw materials and/or goods in order to guarantee products are made, to the
movement of products through the various phases of distribution.
Supply can occur in different places: the warehouse, a manufacturing plant or even at
point of sale.
II- Why optimise the inventory and supply management method?
Choosing an effective inventory and supply management method is vital in avoiding
two costly situations - product overstocking or out of stock scenarios.
- To avoid overstocking
Overstock is dormant products that don't bring any profit to a business and cost a
business money (through warehousing costs).
These products are effectively tied up capital that cannot be mobilised to create
value, and in turn increase costs which is a real disaster!
 A company must try to avoid overstocking at all costs, because the negative effect it
places on cash flow, increases the Working Capital Requirement (WCR) and reduces
its margin of safety.
In addition, if products are difficult to sell and/or they are perishable, a company will be
forced to sell them at a discount or loss, which leads to a decrease in the company profits. In
the worst case scenario, overstocked product can eventually become dead stock, outdated
or obsolete items that can no longer be sold, a net loss for the company.

2- Avoiding low stock and out of stock

If you have insufficient products to meet the potential demand of your customers,
the risk of out of stock is increased. This is a situation that must be avoided, because
it means a temporary halt to your business.
If stock shortages are chronic, a business will run the risk of upsetting its customers
and maybe even saying goodbye to them forever. A store that no longer receives your
products and is forced to have empty shelves on a regular basis will quickly turn to a
competitor for resupply.
III- 7 methods of inventory and supply chain management
Now that you know why it's important to find the most efficient way to manage your
inventory, here are the most popular methods used by businesses today.
1. The ABC analysis of stock
The ABC analysis of stock is a method of separating your products into 3 classes to
determine their importance.
Class A: 10 to 20% of products representing 80% of the total revenues. These are the
most important products. Breakage is not an option and inventory monitoring must
be rigorous and regular.
Class B: 30 to 40% of the products which represent 15% of the total revenues. These
are intermediate products and it is advisable to monitor these regularly, to always
ensure a products are available.
Class C: 50% of products that represent 5% of the total revenues. These products
require less frequent replenishment. Replenishment is only needed when all the
stock has been sold, in order to minimise storage costs.
2- Calendar replenishment
 Calendar replenishment is an easy-to-implement inventory management method.
Orders to suppliers are determined in advance and deliveries are madeon fixed dates.
This method is relevant for items sold regularly over time. It has the advantage of
requiring limited administrative management since everything is planned in
advance. This method of supply management can also significantly reduce costs. Since the
supplier can organise deliveries well in advance as part of its activity is guaranteed in the
future, this makes the supplier more open to negotiation.

3- The replenishment method

This method consists of placing a regular restocking order, by defining a stock level status
of products. The quantity that constitutes the difference between the current stock and
the optimal stock level is defined beforehand.
This inventory and supply management method is particularly useful for expensive and/or
perishable products sold on a regular basis, such as food products.
It can cause problems if consumption does not follow sales forecasts and may result in
the company finding itself at the mercy of shortages or overstocking.

4- The reorder point method or just-in-time (JIT)

The reorder point method, or “just-in-time” method, is a supply chain management

method that requires defining a minimum stock level in advance.
As soon as this level is reached, a replenishment order is triggered. The timing of the
order is determined by stock levels and delivery times.
This method is particularly relevant for products whose frequency of sales is difficult to
anticipate. It is also used for products whose storage costs are high and must be
optimised wherever possible.
In theory, this method has a number of advantages. It makes it possible to only hold the
optimum quantity and minimise storage costs. It also offers several automation
opportunities to reduce the time spent on inventory management.
Not all suppliers accept it because of the random nature of each order (quantity and
date). It also requires a lot of organisation to get right!
Four ways of ensuring more efficient supply chain inventory management
1. Maintain alternative suppliers for your core business
Having alternative suppliers spread across geographies is a great way to ensure that
the supply of essential goods for your business remains uninterrupted. While this may not
seem extremely efficient, it certainly helps mitigate risks from black swan events.
Another step is to maintain reserve or safety stocks to prevent operations from grinding to a
halt completely.
Car manufacturer Volkswagen has regional supply chains in China and Europe. When
the pandemic affected Volkswagen’s supply chain in China, the company switched to its
European suppliers and then switched back to China again when the pandemic shut down
Europe, according to the survey report.
2. Re-evaluate your sourcing strategies and suppliers
In the survey, 44% of respondents believed their companies relied too much on
suppliers from some countries. In the future, they would prefer securing suppliers from a
wider range of countries, and possibly near-shore alternatives.
More businesses are evaluating sourcing strategies that involve local suppliers and
greater transparency to build resilient supply chains that can be monitored more closely.
Some, like Schneider Electric, are planning to cut down their suppliers by half — from 12,000
to 5,000 by 2022-23 — to work closely with a select number of suppliers, according to the
report.
3. Embrace technology and digital transformation of your supply chains
The survey reported that less than 40% of the companies have adopted digital
platforms and advanced analytics, with less than a third using the cloud or IoT. That must
change for inventory management to be effective.
Advanced inventory and warehouse management software can help companies tap
into real-time data for better visibility and more accurate forecasting. AI and advanced
analytics can help companies track crucial metrics, such as inventory turnover, gross margin,
and customer order fill rate and improve overall supply chain visibility. Inventory
management software helps companies understand how their goods move through their
warehouses automatically.
4. Become less siloed and more collaborative as an organization
The goal of effective supply chain inventory management is to guarantee that the right
goods are in the right place at the right time. Isolated departments and siloed organizational
data reduce the transparency needed to ensure effective inventory management. That’s why
facilitating a smoother flow of information across departments is the key.

7. Logistics
Supply chain management (SCM) is one of the main ways to optimize the
budget of enterprises producing goods and/or services. At the same time, a great role in the
supply chains is played by logistics – the management of physical, informational, and human
flows in order to optimize them and avoid unnecessary waste of resources.

What is the Difference Between Logistics and Supply Chains?

Logistics and supply chain should not be confused. Logistics is a rather narrowly focused
concept (narrower than the SCM), which simply means globalization of resource
management — from every local unit to the entire network of production points.
In turn, supply chain management is a more complex category. Supply chain management
involves logistics and thus performs end-to-end optimization – that is, not only within the
enterprise but also when working with counterparties.
The purpose of efficient logistics management is to achieve maximum competitiveness
and profitability of the company, as well as the entire network structure of supply chains,
including the end-user. In this regard, the integration and introduction of innovations into
the processes of supply chains, as well as into the processes of logistics, should be aimed
at increasing the overall productivity of all their participants.

The Functions of Logistics within Supply Chain Management

If we systematize all areas of logistics that need to be developed for the rational
management of production resources, we can single out the following functions:
Warehouse design and management. This role of logistics in supply chain management
covers several tasks at once: from the design of storage facilities to the requirements for
storage of products and ending with the introduction of various automation solutions (for
example, for machinery intended for transporting goods within warehouses);
The formation of packages. Packaging, tracking and accounting – all of these tasks allow
for end-to-end control of goods on the way to the customer/distributor;
 Transportation of products. This includes work with cargo carriers and vehicles listed in
the company’s fleet: planning their routes, calculating fuel costs, etc.;
Working with customs. When an enterprise plans international delivery of goods, it is very
important that during their transportation the goods fully comply with customs
requirements and contain all the necessary documentation;
Working with intermediaries. Intermediaries in logistics are all third-party, non- company
resources that are directly involved in the implementation of supply chains. In turn,
finding intermediaries with the most acceptable ratio of quality to cost of services, as well
as establishing long-term, reliable relations with them are also included in the list of tasks
for efficient logistics management;
Working with written off and returned goods. There is also such a thing as “reverse
logistics”, which establishes the rules and routes for transporting the returned/discarded
goods, as well as ways to dispose of them.

Challenges Logistics Helps to Overcome in Supply Chain Management

Given the above list of tasks that logistics performs in supply chain management, we can
single out a number of advantages provided by its correct implementation:
Minimization of enterprise expenses. The main role of logistics in supply chain
management is primarily to increase the overall value of each delivery, which is identified
by customer satisfaction. This means that the reduction and optimization of labour
resources must be tied in with keeping up a certain level of quality customer service. This
problem is solved both by reducing the total labour resources (primarily by eliminating
unnecessary chain
Consolidation of traffic volumes. Transportation costs are one of the largest expense
categories in logistics management. In general, transportation costs increase depending
on the distance, batch size, and product exposure to damage. On the other hand, the
transportation cost per unit of weight decreases as the lot size increases on long runs.
Thus, the maximum consolidation of transportation volumes can help reduce
transportation costs. Enlargement can be achieved by combining small lots into
a single large one, intended for a long run (i.e., for a longer distance);
Improving the quality of service. With regard to the quality of service, it is largely
influenced by the speed of delivery of the goods to the end-user, as well as its
 transportation in proper conditions (for example, many products today are supplied with
RFID tags so that both the manufacturer and the end customer could track whether all
storage conditions are being observed during the transportation of the goods) and within
the allowed time limits (this refers primarily to perishable goods);
Reduction of actual losses and reduction of possible risks. As you know, a business is
profitable if the value it creates exceeds the costs associated with the implementation of
activities. To achieve a competitive advantage, a company must either carry out these
activities at lower costs or carry them out in a way that will lead to differentiation and
price increment. The first thing to be done to effectively solve this problem is reducing the
losses that are associated with the return of goods. It is very important to plan not only
the routes on the way to the distributor or the end-user but also the routes by which the
goods are delivered back to the warehouse or to the establishments for their disposal.
The second factor affecting risk reduction is the correct planning of enterprise resources,
which minimizes the likelihood of damage or loss of goods or manufacturing components
on the way from the extraction of raw materials to delivery of the finished
product/service to the end-user;
Minimization of the need for intermediary services. Intermediary services (transportation,
storage, marketing, recycling, etc.) take up the lion’s share of the cost of the
implementation of supply chains. Experienced logisticians plan routes so as to minimize
the need for involving third-party services for efficient logistics management;
Supporting goods with the necessary documentation. Insurance and support of
documentation are two fundamental tasks of logistics, solving which helps to eliminate
any problems associated with legal restrictions in the storage, transportation, and
marketing of goods;
Timely response to changing market demands. Advanced logistics scenarios also help to
quickly adapt to changing market requirements and, thereby, maintain top positions
against the backdrop of competitors and remain in demand for the target audience.

Values Logistics Provides to the Supply Chain Business

Supply chain management with the help of logistics tools helps to ensure a
consistently high level of customer service with some reduction in the cost of extracting raw
materials, storing, transporting, and selling goods/services to end- users. Thus, the role of
logistics in supply chain management is to carry the following values:
ensuring the smooth operation of all parts of the supply chain. Continuity of
workflow is a rapid step towards both reducing the expenses and increasing overall customer
satisfaction. Usually, this is achieved through proper planning and the formation of a
fault-tolerant scheme of interaction between the individual links in the supply chain;
release of labour resources. On the other side of fault tolerance is the elimination of
redundant elements (intermediaries), the participation of which entails additional costs.
Thus, it is very important to find a balance in which the reduction in labour resources does
not entail forced downtime during the implementation of supply chains;
coverage of a new target audience. Increasing overall customer satisfaction is a rapid
step toward popularizing your brand by means of word of mouth. An additional advantage is
a fact that such advertising (which is also one of the most effective methods) comes
absolutely free for you;
net cost reduction. By eliminating a number of intermediary links in the supply chain,
you will be able to reduce the net cost of a product or service, and thus increase their
availability to the end-user.
Why Is Logistics Management Important?
Logistics Management can be reduced to the fundamentals of the most efficient and
effective ways to move resources and products to the customer. This ultimately provides the
best service to customers who are ever demanding faster and more efficient services.
Logistics management is also able to create visibility within an organisation's supply
chains, provide data on real-time movements and therefore advise on and implement
change that directly affects the organisation as a whole.
Want to learn more about advancing visibility within supply chains? Join us on the
29th of September when we are hosting an exclusive webinar for HERE Technologies and
Sigfox.
Logistics Management forms a core part of a supply chain for any organisation, managing
and overseeing the distribution network to ensure that inventory management is under
control.
Definition of Logistics Management
 The management process which integrates the movement of goods, services,
information, and capital, right from the sourcing of raw material, till it reaches its end
consumer is known as Logistics Management. The objective behind this process is to provide
the right product with the right quality at the right time in the right place at the right
price to the ultimate customer. The logistic activities are divided into two broad categories
they are:
Inbound Logistics: The activities which are concerned with procurement of material,
handling, storage and transportation
Outbound Logistics: The activities which are concerned with the collection, maintenance,
and distribution or delivery to the final consumer.
Apart from these, other activities are warehousing, protective packing, order
fulfilment, stock control, maintaining equilibrium between demand and supply, stock
management. This will result in savings in cost and time, high-quality products, etc.
Definition of Supply Chain Management
Supply Chain Management (SCM) is a series of interconnected activities related to
the transformation and movement of raw material to the finished goods till it reaches to the
end user. It is the outcome of the efforts of multiple organizations that helped in making this
chain of activities successful.
Supply Chain Management
These organizations may include the firms with whom the organization is currently
working like partners or suppliers, manufacturers, wholesalers, retailers, and consumers. The
activities may include integration, sourcing, procurement, production, testing, logistics,
customer services, performance measurement, etc.
Supply Chain Management has a multi-dimensional approach which manages the
flow of raw materials and works in progress (semi-finished goods) within the organization
and the end product outside the organization till it reaches the hands of the final consumer
with a complete emphasis on the customer requirement.

Key Differences Between Logistics and Supply Chain Management

The following are the major differences between logistics and supply chain management:
The flow and storage of goods inside and outside the firm are known as Logistics. The
movement and integration of supply chain activities are known as Supply Chain
Management.
The main aim of Logistics is full customer satisfaction. Conversely, the main aim
behind Supply Chain Management is to gain a substantial competitive advantage.

There is only one organisation

involved in Logistics while
some organisations
are involved in Supply Chain
Management.
Supply Chain Management is
a new concept as compared to
Logistics. Logistics is only
an activity of Supply Chain
Management.
8. Analytics applications in HR & Supply Chain

1. Hiring The Right Talent With Competency Acquisition Analytics

Hiring the right talent is instrumental to a company’s success with employees amounting
to one of the biggest costs and greatest opportunities in most businesses. Hence, in order
to study whether or not you are acquiring the right talent for your business, competency
acquisition analytics can be used.
The primary step includes identifying the core competencies that are crucial for the
success of your business. Then, you can map these competencies against the existing
talent, their current capabilities and their potential for growth. Talent gaps, if any, can also
be identified at this stage.
The HR team can assess whether the existing resources can be trained to plug the
identified competency gaps, or whether new talent with those competencies need to be
hired.

2. Recruitment Channel Analytics

o Just as important as hiring the right talent, is understanding where the best talent is
coming from. Recruitment channel analytics is a process that helps determine where an
organization’s best employees have been recruited from, and what recruitment channels
have been most effective in hiring the right resources for the company.
This analysis includes gaining insights by drilling down into historical employee data,
surveys and feedback records and assessing KPIs such as the return per employee and
human capital value-added.

3. Classification Analysis To Determine The Success Rate Of Teams

Classification analysis is the process of analyzing historical data to identify patterns that
help us predict which category a particular observation or data entity belongs to. In HR,
this analytical method can be used to study the composition of a team, and other context
variables in order to determine how successful the team will be.
 Instead of forming teams merely on the experience, availability of resources,
organizations can use insights from classification analytics to understand what other
factors such as leadership style, team dynamics and size, the duration of a project, etc,
impact the success rate of a team. Being able to determine the success rate of a team
beforehand, enables organizations to form the right teams for a project.
4. Attrition Analysis
High attrition is a huge challenge for HR teams and cost intensive for companies. Job
postings, recruiting, onboarding and training are some significant expenses of losing
employees and replacing them. This is a bigger problem if you’re in a customer-facing
business as customers prefer to work with a particular set of people they’re habituated
with. One way to reduce attrition is by using advanced analytics and NLP to harness the
employee reviews data from employment websites like Glassdoor, Indeed, Comparably
etc. This analysis helps you measure the employee satisfaction towards the brand and
understand the common factors that lead to attrition.
5. Personalizing Training Programmes
Instead of applying run-of-the-mill training methods and general programs for all
employees, the HR team can instead personalize courses to suit the learner’s preference.
In order to do so, ‘adaptive’ learning technology must be used in which data analytics
determines the learning pace of the employee, the mode of training, as well as what
questions are best suited for them, in order to personalize the course to suit the learner.
6. Capacity Analytics And Utilization
One of the major business benefits of advanced analytics in HR is in cutting down
costs. HR teams can use Capacity Analytics to determine:
What the team capacity is and how much of it is actually being utilized.
What activities the team is engaged in when they are working.
What processes, tools, and applications are being used to complete the work and
how much they cost the company.
How operationally efficient the team is – helps determine if the team is either
overworked or underutilized.
The capacity for growth.
7. Improving Employee Performance
 Although traditional methods of determining and managing employee performance such
as peer and manager review, monitoring KPIs, etc, are globally used, they have not been
very impactful in improving employee performance. In fact, a PwC report on Performance
Management highlights that 52 percent of organizations have made or are planning to
make changes to employee performance management in the near future.
But with Employee performance analytics, individual employee performance can be
measured much more efficiently with the help of both historical and real-time data.
Employee performance analytics provides both a retrospective as well as a
forward-looking analysis of what employee performance was and how we can improve it.
With the resulting insights, we can identify the employees that are performing well and
which employees need additional training and motivation in order to perform better.
8. Anomaly Detection Analysis
Anomaly detection analysis is used to recognize unexpected or deviant patterns. In HR
management, anomaly detection analysis can help identify relationships between
accidents at work and employees who are working longer working hours and possibly
fatigued. By identifying resources that work longer than a specified threshold, HR teams
could prevent accidents and injuries in the workplace.

9. Predictive Analytics in HR
Predictive analytics in HR is a set of techniques used to analyse data to predict future
events in an organization. These predictions are then used to improve decision-making
processes.
How Does Predictive Analytics in HR Work?
You first need to know about the difference between descriptive and HR predictive
analysis. Descriptive statistics describe past events, while predictive analytics use these
same methods to predict future events.
Descriptive Analytics
Descriptive analytics is used to understand what has happened in the past. For
example, if we looked at employee turnover rates over time, we would use descriptive
statistics and HR metrics to see which employees have left or been fired each year.
Predictive Analytics in HR
 Predictive analytics are used to predict what will happen in the future. Suppose we
wanted to indicate whether an employee was likely to leave their job within 12 months. In
that case, we
could use
predictive
statistics
to determine
whether
they had
previously
left their
position
within the
last 12 months.

So, how can you integrate the two in your HR work? The answer lies in using both
descriptive and predictive analytics together. First off, predictive analytics involves
collecting historical data from multiple sources. For it to be helpful, you must assemble
any HR data needs correctly and analyze it thoroughly. Once the data has been collected,
clean it up and transform it into a format that is easy to understand. Finally, analyze the
collected and historical data using descriptive statistics to create a model. Once data
analytics is complete, it is then used to make decisions based on the predicted outcomes.
On the other hand, descriptive analytics is all about understanding what has already
occurred. It doesn’t matter if the event has already taken place; what matters is that the
information is available. The data collection process is much more straightforward than
predictive analytics because there isn’t any prediction involved. Instead, the focus is
purely on gathering as much information as possible.
Therefore, predictive analytics work is more important in your HR work since it allows
you to take action before it occurs. However, descriptive analytics is still essential because
you won’t make informed decisions without it.

Why is Predictive Analytics Good for?

There are many reasons why organizations should consider applying predictive analytics
framework into their business strategy. Here are just some of them:
1. Improved Decision Making
Data-driven decisions are more accurate than those made based on intuition alone. Using
predictive HR analytics to make better decisions allows businesses to save money,
increase productivity, and improve customer satisfaction.
Looking to know more about predictive analytics in HR? Enroll in our top-rated
human resources certifications right now:
2. Reduced Risk
Risk reduction is one of the primary goals of any business. Data-driven decisions reduce
risk because they allow companies to identify potential problems before they occur.
3. Increased Productivity
When decision-making becomes more efficient, productivity increases. When people
aren’t figuring out what to do, they can spend more time doing the actual tasks.
4. Less Disasters
Disaster prevention is another reason why predictive analytics framework is so valuable.
They help prevent disasters by identifying risks early enough to avoid them altogether.
5. Better Decisions
 Decision-making is a complex task. Using predictive analytics in business intelligence helps
to ensure that the best decision is made.

Real-life Examples of Predictive Analytics in HR

The following predictive analysis HR examples show how companies have utilized
predictive analytics in human resources:

Example 1: HP Predicting and Preventing Employee Turnover

In 2008, Hewlett Packard discovered that its employees were leaving the company at an
alarming rate. At first, the company thought that the problem was due to poor
management or employee dissatisfaction. But after conducting research, HP realized that
either of these factors didn’t cause the pain. Instead, the issue was that HP had no way of
predicting when employees would leave the company.

To solve this problem, HP developed a predictive analytics program called “Project Insight.
” Project Insight uses a combination of statistical modeling and text mining techniques to
predict future outcomes including telling which employees will quit within the next six
months. HP then sends out emails to warn employees who are most likely to leave based
on this data analysis.

This program has helped HP significantly decrease employee turnover rates. For example,
between 2009 and 2011, the number of employees quitting per monthdecreased from
20% to less than 10%.

Example 2: Google’s Prediction Engine To Predict Future Outcomes

Google is known for hiring top talent. The search engine giant employs thousands of new
employees every year, but only about 30% of them stay with the company for longer than
two years. It means that Google loses millions of dollars each year because it doesn’t
know which candidates will succeed until too late.
To address this problem, Google created a predictive analytics program called Google
Prediction Engine. It analyses job history, education, skills, and personality traits to
 determine how successful the applicants will become at Google. This information is vital
to other HR leaders as well.
Based on this information, the system generates predictions about whether an applicant
will become a great employee. If the forecast is favourable, Google then offers the
candidate a position. However, if the prediction is pessimistic, Google does not provide
the person with a job.
This program has been very effective at reducing the number of unsuccessful applications.
In fact, since 2007, Google has hired over 100,000 new employees using the Google
Prediction Engine.

Example 3: BestBuy Predicting Business Outcome Using Engagement Numbers

Best Buy is one of America’s largest electronics retailers. The company decided to use
predictive analytics framework to identify customers who aren’t satisfied with their
purchases to improve customer service and enhance business outcomes.
Using collected or existing data from online surveys, Best Buy determined that customers
who purchased items like TVs, DVD players, and computers were more likely to complain
about delivery delays, product defects, and unsatisfactory customer service.
Based on this knowledge, Best Buy sent personalized emails to customers who bought
these products. These emails contained links to online videos explaining how to resolve
problems. Additionally, Best Buy offered free shipping on all orders placed through its
website.
The results have been impressive. Since implementing this strategy in 2010, Best Buy saw
a significant increase in customer satisfaction ratings and enhanced its business
outcomes. And according to a report published by Customer Experience Management
Magazine, Best Buy increased its average order value by $50 million.
Example 4: Amazon’s Recommendation System
Amazon is another popular e-commerce retailer. Like Best Buy, Amazon also uses
predictive analytics to help customers make better decisions when shopping online.
For instance, Amazon can tell you what other people think about a particular item.
Amazon can figure out which products are similar to yours and recommend those
products to you by analyzing historical purchase data.
 If you buy something based on a recommendation, Amazon earns money. For example,
Amazon makes money when you buy a Kindle eBook reader after seeing someone else
purchase one.
In addition to recommending products to customers, Amazon also recommends books
and movies to users. Based on your viewing habits, Amazon determines which books or
movies you might enjoy.
Amazon’s recommendations are so good that many people say they feel like they’re
getting personal advice from the site.
Example 5: Using Facebook To Make Better Hiring Decisions
Facebook is a social networking website that allows members to connect with friends,
family, and co-workers. It was founded in 2004 by Mark Zuckerberg and his college
roommate Eduardo Saverin. Today, Facebook boasts more than 1 billion active monthly
users worldwide. That’s roughly half of all Internet users. That is why HR departments are
using it for hiring purposes.

The most popular use of Facebook is connecting with friends and family. However,
businesses can also use the site to promote their brand.

For example, companies can post pictures of themselves working hard while promoting
their business. They can even ask potential employees to send in resumes. Businesses can
also use Facebook as a recruitment tool. They can advertise job openings and accept
applications through the site. By posting jobs on Facebook, companies can reach a large
number of qualified candidates. And since everyone on Facebook knows one another, this
type of advertising is highly effective.

Example 6: Predicting impact At Nielsen

Nielsen is a company that measures television ratings, including how often shows are
watched and how long viewers watch programs. Advertisers use it to decide whether to
buy airtime during a particular show. Nielsen is so important to advertisers that they pay
Nielsen $1 per viewer. Nielsen collects predictive HR data using TV sets connected to its
servers. These TVs collect information such as the channel being viewed, when the
program starts, and how long viewers watch the program.
In addition, Nielsen tracks how many times a person watches a specific show or movie
online. Using these statistics, Nielsen can use a predictive model to tell which shows will
become successful. The company then shares this information with media outlets and
advertisers. Advertisers use Nielsen’s predictions to make decisions about buying time for
commercials during specific programs.