Supply Chain Data: Real-Time Speed Is Seductive, Dangerous

"Overreacting to sudden and random upticks in sales can produce a deadly chain reaction in the supply chain," notes the CIO.com article, "with each supplier downstream from the first increasing its orders and supply requirements because it wants to have enough inventory to comply with the illusory rising demand. This is called the bullwhip effect."

The Aberdeen report notes that "best-in-class" performers (culled from its survey of 209 companies) "dedicate a lot of effort [than other respondents] to making sure that the information exchanged is accurate and complete, which enables them to make the right decisions for their supply chain." That information feeds apps such as supply chain dashboards, back-end ERP systems and supplier scorecards, which are used to evaluate supplier performance. (This capability will become even more critical in the future as companies such as Wal-Mart continue rolling out their sustainability initiatives.)

The "best-in-class" performers in the study are 85 percent more likely than all others surveyed ("industry average" and "laggard") to report that data obtained during supply chain monitoring is accurate more than 90 percent of the time, according to the report.

For supply chain execs and IT managers, the Aberdeen analysts wisely offer this nugget: "Even if information is timely, it is worth nothing if it is inaccurate."

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