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Business Analytics: How the Power of Data Can Help Your Distribution Company

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This month the movie “Moneyball” starring Brad Pitt will hit theaters. The movie is based on a popular book of the same name by Michael Lewis that chronicles the evolution of player acquisition in Major League Baseball. A forward thinking executive from the Oakland A’s named Billy Beane decided to base his acquisitions not on the previously accepted “hunch” of established scouts, but instead on gathering and analyzing massive amounts of data about each prospective player. This strategy not only helped the small market Oakland A’s to compete with larger market teams, but sparked a league-wide transformation to a data-driven analysis of players. As Boston Red Sox owner and stock market guru John W. Henry put it:

“People in both fields [stock market and baseball] operate with beliefs and biases. To the extent you can eliminate both and replace them with data, you gain a clear advantage.”

Can’t the same be said for any industry? Substitute “distribution industry” for “stock market” and the validity of the statement remains the same. Today’s organizations are collecting an unprecedented amount data, and that data can be a tremendous asset if harnessed the right way. Predictive analysis, demand forecasting, route planning, and replenishment schedules are just a few areas that can benefit from harnessing and empowering your historical data as it pertains to these areas.

Back to baseball for an example: If a pitcher knows that historical data shows that a hitter has a very low batting average when thrown a fastball low and inside, the pitcher can take that data and put it in action when that batter steps up to the plate to give himself a better chance of getting an out.

A distribution example could include a seasonal item that you ship that you have seen an increased demand for during the holiday season, and you ramp up your distribution of that item to capitalize on that opportunity. Big-box retailers such as Amazon and Wal-Mart have been doing this for years and continue to look for ways to find new insights from historical data. What benefits can your organization attain by taking control of your data? With help from Empower Business Solutions and Microsoft Dynamics GP business management software, the power of your inventory data can be unleashed.

By Jonny Hasson with Empower, a Pennsylvania  Microsoft Dynamics GP Partner.


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