In the modern Supply Chain Management (SCM), the integration of advanced technologies and data-driven strategies is essential for maintaining a competitive edge. One of the most transformative elements in this arena is the use of Big Data Analytics (BDA). However, the benefits of BDA are significantly amplified when coupled with a concept known as absorptive capacity. In my recent paper, "The Role of Absorptive Capacity and Big Data Analytics in Strategic Purchasing and Supply Chain Management Decisions," (published with Daniel Trabucchi e Giacomo Marzi) I explore these critical dynamics in depth.
Big Data Analytics enables organizations to harness vast amounts of data to uncover insights that drive strategic decisions. In SCM, BDA can enhance everything from demand forecasting and inventory management to supplier performance and risk mitigation. The ability to process and analyze data at an unprecedented scale allows organizations to be more agile, responsive, and efficient. Improved decision-making, increased efficiency, risk management, and enhanced collaboration are just a few of the many benefits that BDA brings to SCM.
However, the successful implementation and utilization of BDA in Purchasing and Supply Management (PSM) are highly dependent on an organization’s absorptive capacity. Absorptive capacity refers to the ability to recognize the value of new information, assimilate it, and apply it to commercial ends. In the context of PSM, having adequate absorptive capacity is crucial for effectively leveraging BDA. Without it, organizations may struggle to make sense of and utilize the data at their disposal.
Our study reveals several key insights into the relationship between absorptive capacity and BDA in PSM.
Our study reveals several key insights into the relationship between absorptive capacity and BDA in PSM.
- Firstly, adequate absorptive capacity is necessary for PSM to benefit from big data analytics. Organizations must be able to acquire, assimilate, and transform data to turn raw information into actionable insights.
- Secondly, BDA can significantly improve purchasing organizations’ ability to exploit knowledge, leading to more informed and strategic purchasing decisions.
- However, it is important to note that the impact of BDA is more profound in strategic purchasing contexts than in day-to-day operational tasks. Strategic purchasing decision-making using big data analytics improves performance, whereas operational purchasing activities do not benefit to the same degree.
For those interested in exploring these insights further, I invite you to read the full paper (open access) and watch an interview where I discuss the findings in detail.
I also provide an executive report with the most practical implications coming from the study.
By understanding and leveraging both absorptive capacity and big data analytics, organizations can significantly enhance their strategic purchasing and supply chain management decisions, driving performance and gaining a competitive edge in the market.
I also provide an executive report with the most practical implications coming from the study.
By understanding and leveraging both absorptive capacity and big data analytics, organizations can significantly enhance their strategic purchasing and supply chain management decisions, driving performance and gaining a competitive edge in the market.
Patrucco, A. S., Marzi, G., & Trabucchi, D. (2023). The role of absorptive capacity and big data analytics in strategic purchasing and supply chain management decisions. Technovation, 126, 102814.