The rise of digital technologies and the data boom that has followed, is helping drive positive changes all across the value chain.
- By- Saahil Goel
We generate more than 2.5 trillion bytes of data every day via our smartphones and tablets. Of the complete data accumulated worldwide, 90% has been generated over the last two years. Though some might see this ever-increasing volume of data as a challenge, it also presents several opportunities that can empower us with demand forecasting, superior understanding of consumer behaviour and aid in informed decision making as well. The rise of digital technologies and the data boom that has followed, is helping drive positive changes all across the value chain. This has been specifically true for the logistics industry since it has several multilayered bottlenecks and complicated processes. The composite and dynamic nature of the industry is, at present, getting increasingly simplified with Big Data and Analytics.
How Big Data and Analytics are adding efficiency to the ecosystem of the logistics sector:
Forecast: The wide-ranging operations of logistics inherently depend on the demand and supply dynamics. Logistics players have to develop a strong understanding of different metrics including imminent demand, carrier performance, and so on. Doing so will help them in anticipating and planning fleets, inventory shortages and reducing costs, thereby paving the way for full operational capability. This is where Big Data plays a vital role in gathering projections for supply and demand dynamics.
Inventory Management: The use of Big Data and Analytics is aiding the logistics industry to implement several lean inventory management models that are resourceful and proactive. For instance, JIT (Just-in-Time) Delivery considerably decreases the dependency on both capital lock-in and the infrastructural requirement for managing inventory. However, such models are not easy to execute since even a small delay can stall the entire production or business process. Here, data creates end-to-end visibility in operations, thereby preventing unforeseen stock shortages and improving cost-efficiency.
Route optimization: It is beyond doubt that route optimization is an essential element of logistics and shipping. It enables an operator to create time-effectiveness and cost-efficiency in operations. This has a direct impact on a company’s bottom line as it can increase or decrease margins. Logistics players can optimize their routes and aptly chalk out a plan through an in-depth assessment of the shipment data, real-time GPS data, delivery sequence, weather forecasts, and holidays. The key deductions of this assessment can then be merged with other tech-driven approaches (such as Geo-tagging and Geo-fencing) for greater compliance and SLA breach prevention.
Insights: Comprehensive data points get generated for orders on both macroscopic and microscopic levels. This enables a company to gain several insights that have meaningful implications on for business operations. For instance, shipping analytics computes across-the-board data such as ticket-size of orders, PIN code performance, COD pay-out time, undelivered/RTO orders, and so on of various shipping players and geographies. This enables organizations to study trends and make informed decisions using them. Such insights can also be used for product placement, market strategy optimization, pricing strategies, operational risk management, and improving the product as well as service delivery.
Business Opportunities: The enormous amount of data doesn’t merely empower a business to function more resourcefully, but also helps tap the various business opportunities that prevail within the market. Business Intelligence solutions further help in finding bottlenecks in business operations and addressing them timely. For example, you can reduce RTO shipments by taking actions on undelivered orders through NDR (Non-Delivery Report) dashboard. Such processes also help businesses in becoming better organized as well as prudential.
With the ever-increasing influx of digital technologies in business processes, we are witnessing a paradigm change towards a future that has no room for pilferages and inefficiencies. Several avant-garde technologies including Big Data and Artificial Intelligence are empowering logistics solution providers with a data-driven approach and smarter business ecosystems. This is driving unparalleled competencies and effectiveness within the logistics sector, perhaps, even acquainting it with the future of operations.
- Saahil Goel is CEO and Co-Founder, Shiprocket.