Introduction
Demand forecasting is the most important phase in any fashion business. Most of the forecasting is driven by guestimates. Nowadays, analytics is playing a great role in demand forecasting. Other important pillars of the supply chain such as procurement, distribution, planning, etc are also being driven by analytics in order to minimize the cost and improve the efficiency of the whole value chain. Fashion e-tailers get benefited from big data and analytics in order to develop markets in developing countries. There is a glut of data present in the industry which needs to be structured to be used and make sense of. When e-tailers need to enter a new market, there is a need to have a strategy and a business plan. It becomes easy to form a strategy and business plan for entering in developing countries by crunching the numbers available in the form of big data and applying advanced analytical techniques.
Literature Survey
Big data and analytics is still at the beginning stages of the development at many companies and will take time to build out. Time for real-time supply chain practices has come and is on the verge of being more mainstream. The top consulting firm utilizes advanced predictive analytics to predict and reduce lead times as well as inventory. One of the biggest challenges is maintaining the accuracy of the data on which various complex algorithms are being applied. There is an increasing interest in the areas of improved forecasting and Sales & Operations Planning. The supply chain is the backbone of any company and plays a prominent role in the company’s cost structure and profitability.
Analytics (Descriptive, Prescriptive, Predictive)
The growing tsunami of data is a boon to businesses in the digital age. Limitless oceans of data, often reflecting customer experience as it happens, have the potential to remake supply chains. To put data growth in context: the world’s total digital data volume, which is doubling every two years, stood at 4.4 zettabytes (trillion gigabytes) in 2013 and is projected to reach 44 zettabytes by 2020. (EY, 2016) With such amount of data generated it is imperative for the player in the industry to understand and utilize this opportunity.
Analytics, be it descriptive, prescriptive or predictive has become an integral part of the industry. Diagnostic analytics are used for root cause analysis (RCA), online analytical processing (OLAP), and what-if analytics. They have commonly applied for RCA of supply chain performance and data visualization. Prescriptive analytics allows optimization of transportation routes, factory scheduling, and inventory. (Masters, 2016) Predictive analytics and machine learning provide a platform to make utilize it to make decisions. Different time-series stochastic models are being built to analyze customer preferences and forecast sales and other parameters to plan for the everchanging demand.
Big Data
Financial data, demand data, product data, manufacturing data, inventory data, weather, traffic, track and trace data, etc. are inputs for prescriptive analytics which helps in answering the questions such as: What will be the effects of decision or situation? How can an organization make a particular target to happen? Prescriptive analytics help to predict scenarios at very minute levels of details. It helps to predict the effect of shifting to a new supplier on product quality or even it can help to decide whether the introduction of the new autonomous machine would increase safety on the warehouse floor or not. Markets can be developed by implementing analytics on the abundant data present in developing countries. This helps in cost-effectiveness as more sense can be made about business and a new market with the help of existing data and new techniques.
Conclusion
In conclusion, analytics and big data in fashion e-tailer industry can be a game changer for any organization because of its ability to provide a major competitive advantage over others. Data is growing exponentially and analytics provides a tool for the industry to organize it and make sense of the emerging patterns that come up. Analytics in conjunction with other technologies is shifting the way industry operates and bringing in real-time solutions to ease the pressure and reduce the operations expenditure. It is the need of the hour and we are seeing its presence and the effect it brings to the fashion e-tailer industry.
Blackcoffer Analytica: Kunal Mahanwar & Maheep Ajay (NITIE, PGDIM-I)
