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- Supply chains involve three flows: the flow of money, the flow of materials, and the flow of information. In this video, we'll focus on that third flow, information, and talk about how supply chain managers can leverage big data to make better decisions. Every transaction that occurs in a supply chain creates new data. When you think about all of the systems that are used by all of the participants in a supply chain, we're creating a huge amount of data every day.
For every item we sell, we need data about how much it cost us, how much we charge for it, where it comes from, and what it's made of. For every customer we sell to, we wanna know how they're going to pay us, where we need to deliver the product, and what else they've bought from us in the past. We also collect data about suppliers, transportation providers, and manufacturing processes. And the data we collect can include documents, pictures, and even videos.
And we almost never throw any data away. This all leads to the trend that we call big data. The good news about big data is that it should help supply chain managers make better decisions based on facts rather than on intuition. But the bad news is that the amount of data is growing so fast, that it can be hard to manage. When you collect data from your supply chain, you can store it on servers that you own and maintain yourself.
This is called an on-premise approach. While on-premise solutions give you a lot of control, they can also be expensive to maintain, and they're difficult to scale. Cloud storage is when companies store their data on the internet instead of using on-premise servers. When data is stored on the internet, it's often spread across many different servers, and you have no idea where they're located. When you store data in the cloud, you don't need to buy as much hardware.
You can just rent the storage space that you need from a company called a cloud storage provider, and you can access that data from any computer that's connected to the internet. So when your supply chain includes employees, customers, and suppliers around the world, a cloud-based solution makes it easy to collaborate. No matter where your data is stored, it's smart to think about how you can use it to make better supply chain decisions. By leveraging the power of the data that's flowing up and down your supply chain, you can help to create tangible value for your company, as well as for your customers and suppliers, and that's what supply chain management is all about.