Data Analysis Skills and Thinking

Data Analysis Skills and Thinking

BUS 307 Operations Management & Quantitative Techniques

Data Analysis Skills and Thinking

Supply chain management consists of the active management of supply chain activities and relationships designed to maximize customer value and achieve the competitive advantage. It represents a vigilant effort by a firm or group of firms to develop and run supply chains in the most effective and efficient ways possible (Bozarth & Handfield, 2016). These activities carried out by organizations to analyze sourcing opportunities, develop sourcing strategies, select suppliers, and carry out all the activities required to procure goods and services. Within the barriers of these activities, data gathering, analysis and critical thinking are a prerequisite for predictions and conclusions. Thus, a more intelligent approach to data analysis is to determine what should and should not be analyzed, where and how would said data should be obtained, which areas divisions of an organization should participate and what strategic method should be used for sourcing and procuring.

Spend Analysis is the application of quantitivate techniques to purchasing data to better understand spending patterns and identify opportunities for improvement (Bozarth & Handfield, 2016). Using spend analysis has many benefits that include revealing spending patterns throughout various sections of the organization, learning where the company spends their money the most and just how much money is the company spending on its suppliers. To answer those questions, those who use spend analysis have a variety of tools in their arsenal to find the answers they seek. These techniques range from statistical methods such as regression analysis and graphing techniques such as Pareto charts, to software applications that obtain data from an organization’s financial and accounting information (Bozarth & Handfield, 2016).

The spend analysis field contains four major processes and technology areas. Data Extraction pulls data from systems that contain spend and other pertinent data. Data Cleansing examines spend data extracted from accounts payable and other systems. Data Store provides data classification. Finally, Analytics and Reporting calls for customized tools for specific data models (Bharadwaj, 2006). To begin the process of spend analysis is to locate the spending data to understand what’s being purchased. Identifying areas within the organization that purchases items such as finance, materials and logistics. Once the data is identified it can then be categorized into groups such as supplies, software, etc. to pinpoint a specific category to focus on. Next is to identify opportunities to uniform the spending. For example, if section A and B are purchasing the same product from different vendors, standardizing would call for the use of one vendor to purchase the product from versus using multiple vendors. Finally, when those opportunities are identified and registered the team can implement steps to better enhance spending. These steps to business process improvement is widely used by individuals who are experts in organization and business optimization, which is why many businesses seek out Six Sigma personnel to assist in this process, which will be explained next.

Six Sigma is defined as a business improvement methodology that focuses an organization on understanding and managing customer requirement, aligning key business process to achieve those requirements, utilizing rigorous data analysis to understand and ultimately minimize variation in those process, and driving rapid and sustainable improvement to business processes (Bozarth & Handfield, 2016). In short, they’re professionals who specialize in business practice optimization by eliminating or reducing unnecessary procedures or processes within a business. The most common Six Sigma methodology is DMAIC, which means Define, Measure, Analyze, Improve and Control and is often used to refine existing processes and beings by defining the goal of a project and problems to be solved (Boslaugh, 2013).

Using Six Sigma experts to identify optimal business partners and establish strategies for spending is their default design. They include Black belt, which are fully trained experts who perform six sigma practices on a full time basis, Green belts who have some basic training and are assigned projects on a part time basis, and team members who have basic knowledge or interest in the process (Bozarth & Handfield, 2016). With the tools utilized by Six Sigma, many business can optimize their processes and achieve overall quality improvement.


Bharadwaj, S. (2006). Spend intelligence: the next wave of spend analysis: spend intelligence takes spend analysis one step further by turning spend data into actionable information.(SUPPLY MANAGEMENT). Supply Chain Management Review, (6).

Boslaugh, S. P. (2013). Six Sigma. Salem Press Encyclopedia,

Bozarth, C. C., & Handfield, R. B. (2016). Introduction to operations and supply chain management (4th ed.). Upper Saddle River, NJ: Pearson.