- Harkirat Ahluwalia
How NBA and Supply Chain Management Are Similar
Updated: Sep 11, 2021
The 2021 NBA playoffs have been very eventful with many favoured teams getting upset. During this tumultuous post season, I thought I'd take the time to explain how supply management and basketball can involve much of the same strategizing and planning, especially when it comes to analytics and the management side of basketball.
Revolutionized Through Data Analytics
The NBA and its teams hire data analysts for the main purpose of devising a winning strategy. In recent years, basketball has been revolutionized as the three point shot has taken importance.
Analytical professionals are able to predict through past and current data that teams
who take and make more threes are able to have more efficient offence, which ultimately leads to wins and success. As a result, teams are focusing on finding players and coaches that fit this philosophy, hence the strong demand for "three and D" players in today's NBA.
Supply chain management is no different, as recent trends of companies becoming more reliant on data analytics has allowed them to analyze past data and trends in order to determine winning strategies. For example, a company may use analytics and performance metrics derived from a platform like The Owl to predict future demand and determine how much supply they should purchase in response. With whatever strategies that they are able to derive from analytics, they must find the right planning, sourcing, manufacturing, delivering, returning and enabling processes to align with that strategy. The same way, three point shooting is trending in today's NBA, supply chain has its own trends such as sustainability. As a result, companies must turn their entire supply chain process to one that is environmentally friendly to align with this trend and find success.
In basketball, the medical staff assesses whether a player is healthy enough to be able to play
based on the severity of their injury along with precedents. Currently, the Clippers are avoiding
playing Kawhi Leonard to prevent the risk of a catastrophic injury such as what happened to Kevin Durant in 2019. The Golden State Warriors became greedy in 2019 as they took a risk in order to win their third straight championship and it stained their franchise's reputation and was one of the reasons Kevin Durant left. The next year, they became the worst team in the league.
Supply chain management in the same way as basketball involves careful risk management. For example, procurement managers must assess the risk of their goods not arriving on time when choosing a particular supplier. They may also choose to avoid shipping items at certain dates in a year where weather conditions are known to be severe so that they can prevent the chance of delays. If a company becomes greedy and takes huge risks with the goal of increasing profit as much as they can it can lead to huge losses. Supply chain planners must prioritize the long term success and health of their supply chain and company rather than recklessly chase huge short term profits.
Making Important Decisions
With the revolution of the game along with other analytics, teams have to decide which players,
coaches and staff to hire based on insights gained from analytics. Since the game is heavily
prevalent on shooting, the 76ers might look to trade Ben Simmons as they realize that the data
tells them that they won’t be able to win with a point guard that can’t shoot. They may have
thought that they could get away with it, but with the recent collapse in the series against the
Hawks they likely realize that they can’t.
Similarly, in supply chain a data analytics software can allow you to assess both past and present performance in order to determine which changes need to be made as far as suppliers, production processes, transportation, inventory and more. The reason analytical software is used is so that the company's supply chain planners can make decisions on how performance can be improved so that they can ultimately increase their bottom line. A company may try one approach and realize that it doesn't work the way they attended it to, the same way an NBA team may go with certain players, rosters or game plans only to make changes after losing.
Overall, the rise of data analytics in the world has had a huge impact in similar ways to two completely different activities. If there's anything the NBA has taught us, its that the franchises who are managed the best and make the right decisions, assess risk, study trends and consider analytics are the ones who end up finding the most success to win championships. The emphasis on data analytics is the reason why every NBA champion since the 2014 Spurs has been a terrific three point shooting team aside from last year's 2020 Lakers who had James and Davis.
If you want to find out how your company can effectively manage every part of your supply chain using data analytics and trends, click the buttons below. The Owl platform not only gives meaningful performance metrics and supply chain KPIs but has a unique benchmarking feature that can help you contextualize supply chain performance to compare to companies of similar size and industry. It also offers expert support that can show you how to leverage insights in order to make effective decisions which will ultimately increase your bottom line tremendously.