UK Productivity in Decline: Resolving the Problem by Replacing Demand Management Processes with Data Analytics
Demand management refers to the methods by which economies or individual institutions predict or manage demand. Demand can be forecasted by institutions, however, with the rapid and changing speed of demand in both the UK and international markets, the time has arrived to provide a fresh insight into UK productivity through the lens of existing demand management methodologies vis a vis the use of new methods via the application of ‘Data Analytics’, or simply known as a fresh concept of ‘Managing by Analytics’.
Managing by Analytics is a phenomenon which conveys the idea of companies using more sophisticated and quantitative analytical tools (usually in the form of large data) in order to analyse a variety of business related problems (or in this case, the development of sophisticated techniques to address the rapid nature of demand) for companies. This platform creates a situation which allows companies to manage highly successfully and thus by managing in this way, increase the efficiency by which they manage and hence increasing productivity levels.
Part of the productivity problem is connected to the lack of intensity in innovation in the UK. Innovation may be procured in many ways including: (i) Product innovation; (ii) Process innovation and; (iii) Creative innovation. Managing by analytics in this way induces higher productivity levels and may have the potential to create spare capacity. Spare capacity gives rise to innovation or a phenomenon called Innovation by Analytics. Thus, companies use data analytics to create a platform for innovation, creation of products and services at the right time for the changing desires of their customers and successful innovation creates higher productivity. UK productivity has been declining for many years and the time has arrived to show how the methods by which data analytics is able to ensure that managers make better decisions, create spare capacity currently occupied by inefficient methods and processes to be replaced by innovation (using analytics) and assist in creating a platform for improved demand management by using data analytics and hence achieve higher productivity.
‘Big data’ has been the driving force behind company efficiency and hence growth. The decision companies must make is how this data is used. Data analytics carries numerous advantages which assist companies in achieving their aim in many areas, culminating in improving their competitive positions. Big data is ever present and with the advance of globalisation and technology, the prospect of company gains are significant if the data is used appropriately. Companies can use the analytics (or manage by analytics) which undertakes various formats: Descriptive, prescriptive and predictive. Descriptive refers to the statistical data which companies may use, prescriptive analytics refers to the analysis of the most successful course of action given a particular situation(s) and predictive analysis makes predictions about future events. Demand management arguably requires a predictive approach to analytics which will gives rise to a real time analytics. This is the future of the data driven information. This has the effect of:
By using analytics, companies gain valuable insights which provide experience and ultimately the ability to create a platform for successful Demand Management Procedures. Innovation allows for the creation of new products and as companies save on cost, this becomes a productivity factor. The real time aspect of management allows companies to adapt quickly, therefore ensuring that they make quicker decisions. This ultimately leads more successful management, the end result being improved demand management and productivity increases. Big data cannot be ignored and the research study should: (a) raise awareness; (b) increase understanding where knowledge is lacking and; (c) provide the starting point for solutions. From an business and industry perspective, companies can reduce costs, ensure quicker and better decision making in real time, create new products and services and create a platform for innovation through new processes, products and services.
The culmination of the above concepts and many more will positively impact companies as they become data driven. The results of the research will be evidence-based and the impact of data driven companies will filter to the wider economy in terms of increased capacity (or spare capacity) which increases productivity and the capacity for innovation. This is a major benefit to society and the results of the research will illustrate this.
The continuing decline in UK productivity has been of major concern, particularly in recent years. Understanding the efficiency of the UK labour market is an important issue especially in the wake of the changing economic landscape where SMEs are gradually becoming the driving force of economic growth. With declining productivity, declining economic output results and SMEs need to seek the most optimum levels in all levels of the productive life cycle. The aim of this research is to assess how (in the wake of newer methods) to address management demand procedures, and the level to which companies have been able to become successful through their use. Analytics, and more specific, real time analytics are a reasonably original concept in many businesses and the task is for these businesses to understand: (i) Their benefits; (ii) what they do; (iii) how to use them and (iv) how to make the best use of them for productivity gains.
Dr. Victor Chukwuemeka
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