Logistics service providers that successfully deploy Business Intelligence (BI) secure a strong position vis-à-vis competitors, with the greatest opportunities lying in the predictive power of data.
So writes ABN Amro in the report 'From information flow to goods steam' published today. In the publication, the bank focuses on logistics service providers in the e-commerce sector, as smart data usage is particularly important for them. "This growth sector is characterised by a short time-to-market; it is essential that logistics is fast, efficient and sustainable. Achieving this requires smart use of data, which is particularly abundant in e-commerce."
Service providers who use their data intelligently improve their processes and actively respond to trends, according to the bank. The report cites some real-world BI opportunities:
Warehouse improvement
With proper slotting - determining the best location for each product - it is possible to reduce walking distances of order pickers and increase order picking speed. For example, Rhenus Contract Logistics uses a picking algorithm in one of its warehouses. By working with the client who provides a demand forecast and incorporates future promotions into the demand forecast in real time, it automatically determines which products should be in which location in the warehouse.
Improving transport planning
For good planning, logistics service providers benefit from predictability. Gaining insight into information on deliveries, lead times, transport routes, fuel costs and load factors helps. Collecting and evaluating this data then makes it possible to make forecasts and optimise trips.
Improving demand forecasting
Logistics service providers have a huge database of historical orders. When this historical order data is supplemented with real-time order data and with external data such as weather information or population composition figures, logistics service providers can make forecasts for the coming weeks together with their clients.
The bank makes five recommendations for entrepreneurs who want to get started with BI:
- Ensure data collection is high on the strategic agenda
- Inventory where data is collected
- Work with data specialists
- Develop a culture where data specialists and less data-driven employees work together
- Experiment purposefully and on a small scale
"Logistics service providers need to get started with BI. This can be done step by step and, we are convinced, is crucial for the continuity of any business," concludes ABN Amro.
Read the full report here.
