How Predictive Analytics Impact Distribution

Analytics tools are one of the most crucial parts of business success in the twenty-first century. While it’s not as magical as a crystal ball, analytics can provide in-depth knowledge about the state of a company and help it predict with some certainty what will happen. Grand View Research explains that predictive analytics has the potential to rapidly grow up to 2025. The reason why predictive analytics is so successful is by spotting trends and patterns within massive swathes of data. In the case of distributors, predictive analytics can change how they approach their goals.

Commercial Planning is Easier

It’s tough to figure out what works and what doesn’t when it comes to business. Between mergers, acquisitions, and the company’s growth, the dynamic nature of a business is hard to plan for. Utilizing predictive analytics can offer some support for commercial planning for companies. By experimenting with different starting values, the company can determine what is the most optimal method forward. Ideas such as linear programming to maximize growth and profit immediately come to mind as good examples of how predictive analytics can help a business. With accurate data, predictive analytics models can be eerily accurate.

Fraud is Easier to Detect

Typical predictive analytics models use millions of data points to analyze behaviors and generate trend data. The upside of having this much data is that it’s pretty simple to spot what ordinary behavior looks like. Naturally, when one or more outliers occur, they stand out from the average spread of data points. Distributors can spot where items are “disappearing” or how much of a supply chain is affected by theft or embezzlement. The data provides a starting point for a financial forensic investigation, but without it, the discrepancy might likely have gone on for much longer without being spotted.

Competitive Advantage for Businesses

Many companies today compete in a crowded environment filled with other businesses offering similar services or products. Competitive advantage is the edge that a company has on its opposition. Predictive analytics doesn’t only need to depend on data that the company receives from its own products and services. It can tap into publicly available market numbers and performance data to deliver insights into how the consumers see their product amongst the competition. From there, the business can then formulate marketing to build upon their strengths. Additionally, organizations can quickly spot gaps in their supply chain and even pivot to deal with shifts in demand immediately.

Real-Time Data for Faster Feedback

Thanks to new technological advances, a lot of the data that predictive analytics relies upon is real-time data. Companies like YEAH! Local, for example, can quickly collect streaming data and use it to streamline their clients’ content delivery to a particular type of client. In the case of distributors, real-time data can also play a part in supply chain and logistics systems with the help of Internet-of-Things devices. As most commercial businesses are aware, the faster that they become aware of a developing situation, the more efficient they can be at responding to it. Predictive analytics alongside real-time data streaming gives them that edge.

Remarkably Accurate Foretelling of Events

As we said before, predictive analytics doesn’t offer an infallible portent of the future. However, it can help businesses learn about the challenges they’re likely to face moving forward. CIO Magazine mentions that predictive analytics is an ideal method of finding and exploiting patterns inside of the data models to give a business a good idea of where market trends and opportunities may exist in the future. Predictive analytics can even model current data to allow distributors to prepare for shortages that may impact their long-term profitability.

A Crucial Part of Modern Business

Predictive analytics is a powerful tool if used wisely. Knowing what consumer trends are before they get off the ground allows businesses to plan marketing to capitalize on that trend months before it takes off. When examining competitors’ data, it can help enterprises spot areas where their opposition may be unable or unwilling to exploit. These insights can offer the business new areas to expand into. It takes a bit of planning to implement analytics in a way that meads to actionable results. Distributors should look at both implementing analytics for real-time data analysis and use that data to inform their future decisions.