How Can Data Improve Supplier Decisions?
A growing trend across all industries has been the application of big data, with the use of algorithms and the hiring of data scientists becoming commonplace. As businesses collect and store an ever increasing amount of data, the algorithms required to make sense of this data will become even more valuable. This is due to the fact that algorithms can take any number of factors into account and provide unbiased insights into variation. The transportation and logistics industry has mountains of data available, and experts encourage carriers and their customers to embrace data backed business decisions.
Data, Data, Everywhere....but Make Sure your Drinking from the Right Hose
In order for data to be used in the decision making process, companies must ensure that they are using high quality data in their analysis. Although the availability of supply chain data is increasing by a factor of 10x each year, a large quantity of data alone provides limited value for business analytics. Prudent companies should utilize a process for correcting, and removing, errors and inaccuracies from data sets as well as addressing any recurring data issues. This process is referred to as ‘data cleansing.’
Seeing the "Invisible" in the Data
Once your data is clean, the true impact of algorithms can be felt, as algorithms “make it easier for us to see the invisible” says Jim McGinness, regional head of Panalpina. Even with the use of algorithms, business analytics must remain collaborative. This means sitting down with various stakeholders – colleagues, management, customers, etc., – and discussing the use of big data for business analytics and how the results affect each stakeholder. Discussions such as these will allow companies to use data to achieve their internal and external goals.
While many businesses embrace data analytics as a valuable, strategic asset, others are unsure of how analytics can transform their processes. One of the major applications will be allowing shippers to detect patterns and understand the deeper nuances of working with various carriers. Luckily, today’s “automated algorithms can identify patterns and provide insights” into carrier safety, pricing trends, carrier capabilities, and innovation. Using algorithms, shippers can understand which suppliers truly align with their company’s goals and/or are the best fit for the job at hand.
In the transportation and logistics industry algorithms will begin to enable human decision makers to make better and faster decisions by preforming valuable analysis. Despite all the data collected, it only becomes useful when businesses use data to drive purchasing behavior and improve processes. The companies that can collect, organize, and apply this data will hold a strategic advantage in the coming years.