Using Data Insights to Optimize Logistics and Transportation
Digitizing decision-making is a crucial step to leveraging data to make positive impacts in an organization. Logistics and transportation data are critical in enabling proactive decision-making that informs supply chain initiatives.
Q: How does logistics data impact the rest of the organization?
A: Logistics is one of the few sources of information that shows the organization's entire external network. For example, logistics shows all suppliers and raw materials, where they come from, and how they are getting there.
Logistics data also identifies who and where your customers are, and where your locations are in relation to them. By using this data strategically, you can support significant initiatives in the organization, like adding plants or distribution centers, changing sourcing habits, or desirable acquisitions.
Q: How do you use transportation and logistics data to drive supply chain decisions?
A: Often supply chains are not using all the logistics data available to drive their decisions. With the upstream supply chain typically focused on machine utilization, low-cost sourcing, and labor management, the logistics side is simply reacting to decisions made upstream. These reactive decisions can cost the company a lot of money quickly, but could also result in unhappy customers.
An integrated supply chain must consider the balance between service and cost throughout the entire supply chain, including logistics. Logistics then becomes the measurement of what the customer sees. Metrics like on-time delivery, fill rates, and more, can be used as a feedback loop, offering guidance and measurement to the quality of entire supply chain decisions.
Q: How do you focus on the right data?
A: To make good decisions with data, you need to start with quality data. Ask yourself if you're making decisions based on quality data or justifying decisions based on data.
In other words, does your data show you what strategies to go after, or are your strategies dictated by the data you use?
To focus on the right data, you first need to collect the right data. Then, and only then, can you use that data to build and support your strategy. The data changes your strategy over time and enables you to monitor your performance. If your data enables all of that, then that's the right data for you and your network.
To make the data actionable, you need to consider the outliers and determine what actions support your strategy. Finally, make sure you have clean, trustworthy data. Typically, organizations get caught in the trap of having certain data sets they trust and others they don't. Uncertainty and trust underscore the need for a quality data provider.