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Harnessing the Power of Big Data

Big Data in LogisticsThere’s little doubt Big Data is rapidly transforming the third-party logistics industry. Companies that take advantage of what computerization and information technology have to offer will almost certainly have leg up over the competition, while also delivering better service and making operations more cost effective.

Harnessing the Data Stream

One of the challenges of working with Big Data is effective analysis and implementation of the massive amount of information that can now be generated. Now,more than ever, data is pouring in from all angles.

Innovative 3PL companies are already utilizing video cameras, RFID sensors, GPS trackers and other digital shipping tools, and those that aren’t are expected to implement these devices in their companies within the coming years. All of those devices are increasingly interfaced through tablets, smartphones and data processing centers.

Making data easier to process is key to learning how to improve operations. That means standardization between devices so everything and everyone is speaking the same language. It also means creating a uniform format, such as one broad customer satisfaction survey that helps computers spot trends more easily.

Effectively using this information is key to unlocking the potential of Big Data. When using this data properly, logistic companies can identify weak spots in supply chains and even identify employees that are not performing tasks as needed, just two important factors in the low-margin 3PL industry.

Dealing with Last-Mile Costs

Big Data is revolutionizing the way logistic companies deal with costly “last-mile,” often considered the most expensive part of the supply chain. Using Big Data, companies can now examine routes in real-time, determining the most efficient way to reach a destination. Big Data does this by examining all barriers to delivery, including geographic or situational factors, and then uses GPS to deliver the optimal route to employees.

Automated systems also help drivers and shippers determine the proper sequence of goods’ delivery, helping to reduce time spent in the field. Telematics’ software analyzes its own databases and incoming information based on variables like traffic and weather conditions to switch to a more effective route. If a recipient’s location changes or new information arises, systems can help drivers learn this information in real-time.

Strategic Planning and Efficient Operation
Big Data can increase operational efficiency and aid in company strategy. Using software that analyzes large data sets, companies can allocate fleet resources efficiently and determine important decisions like whether to expand warehousing in a certain area. Big Data does this by analyzing factors such as seasonal delivery patterns and providing maps of historical routes for comparison.

Another advantage Big Data has to offer is planning routes based on a large variety of factors, including schedules for planes, trucks and trains, while also creating more efficient systems for employee scheduling that correspond with deliveries and shipping routes. This can help 3PL companies manage their operations by taking into account the very latest information streams.

These systems can also input external information from different data sources automatically, helping operations learn about factors like product release dates, lost shipping containers, factory closures and even ongoing political developments.

Customer Service

3PL companies can quickly lose customers if they don’t respond to customer needs or signs of dissatisfaction. Big Data helps quickly identify customer complaints and input, while also measuring customer satisfaction in relation to other data, such as financial sector information.

For example, a customer might cut down on orders with a 3PL company, but external data feeds from financial services might indicate that this customer has, at the same time, increased their sales and revenue. This offers a clear sign that there is a problem with customer satisfaction and the possibility that they have turned to another service provider. Big Data can spot these patterns and help 3PL companies adjust accordingly.

With Big Data, companies also identify usage patterns of their customers and develop ways to foster brand loyalty in customers to reduce customer turnover, a key issue for many logistic companies.

Cloud Computing and Automation

Data services also allow companies to operate in the cloud, helping them process more data, keep backups of data and analyze data, all for far cheaper than it would cost a 3PL to buy the hardware and servers themselves.

One of the big future trends of 3PL is the use of automated technology to reduce costs and increase efficiency. Feeding information into robotics that perform repetitive tasks, such as sorting packages, requires building Big Data sets and then programming machines to perform a set task that increases efficiency. Although many 3PL companies do not yet make extensive use of automation, this trend is expected to change in the future, and Big Data will be an essential part of this development.

Logistics is already being revolutionized by Big Data, and as the technology advances, further big changes will force companies to adapt to Big Data out of their own interest and for the benefit of the customer.

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