How Big Data Will Transform Logistics & Supply Chain
Data-driven decisions are now the focus of attention for managers in the supply chain industry. The use of big data in global logistics has increased substantially in recent times. A research study by Research and Markets estimates that the supply chain big data analytics market share will hit $9.28 billion by 2026, up from  $3.55 billion in 2020.
Traditionally, SCM relied on ERP and other disparate storage systems for data. However, as the SCM landscape is becoming increasingly complex, the traditional systems are proving to be inefficient and inadequate. Managers are now turning to big data analytics to make better decisions, optimize their supply chain, and improve overall efficiency. This blog discusses the value of big data analytics and how it can benefit your business.
What Is Big Data?
Big data is a combination of tools, algorithms, and processing systems used to interpret insights from disparate data. It involves the application of statistics, mathematics, simulations, and other techniques to gain insights from data that help organizations make better decisions.
How Big Data Analytics Is Used in Logistics and Supply
Collecting data is crucial for logistics companies. For example, data about the cargo fleet condition, the road it travels, fuel consumption, and the number of drivers can help decide on crucial areas and techniques to optimize operations. In essence, logistics companies use big data analytics systems with GPS devices and other tracking tools to monitor the movement of goods in real-time. Managers combine the information with traffic data, fleet data, and on-road network data to control the fleet, schedule shipments, and automate routine tasks.
How Big Data Analytics Is Used in Logistics and Supply
Punctuality and transparency are crucial in the supply chain sector. Today, customers demand shorter lead times at lower costs. Implementing big data in logistics helps managers foresee and prevent bottlenecks in the supply chain that could lead to delays. Big data also helps companies to utilize resources and improve transparency for enhanced operational efficiency.
Besides, technology assists companies in improving customer experience and maintaining their loyalty. Big data allows businesses to systematically analyze the data on their customers and determine who they are, what they prefer, their shopping patterns, and the best strategy to convert them. Implementing a practical data-driven business approach can also lead to satisfied customers and increased revenue.
The Impact of Big Data In Logistics
The following are the benefits of big data in supply chain management:
Enhanced Transparency
As mentioned earlier, big data analytics systems allow logistics companies to monitor the movement of goods in real-time. These insights help managers plan and schedule deliveries effectively while factoring in predictions regarding weather conditions or accidents. Because they can monitor the delivery status of parcels in real-time, customers get automated notifications in case of expected delays. This translates to a more efficient logistic operation and more real-time updates for the customers and partners.
Reduced Costs
Big data in logistics can help save money in many ways, including:
- Route optimization: Big data analytics help managers locate the best delivery route. Advanced logistics software leverages data from sensors in vehicles, weather reports, and traffic updates to select the most appropriate course of action. This helps companies save a lot of money in fuel costs.
- Predictive maintenance and driver insights: Big data uses advanced analytics systems to determine the driving habits like speeding up, baking, and driving time. Inappropriate or inefficient driving habits are spotted easily and eliminated. Besides, the data on fleet conditions help companies carry out maintenance in advance, which results in fewer delays due to vehicle breakdowns.
- Seamless delivery: A study by SOTI and Arlington research reveals last-mile delivery is the most inefficient link of the entire supply chain. Big data in logistics is used to analyze information on all stages of the delivery process, including the last mile. This helps companies spot specific patterns and take action to optimize their delivery methods.
Improved Customer Experience
Big data analytics in supply chain management help improve responsiveness so companies can meet consumer expectations by delivering quality products on time. Big data analytics enables managers to understand the market situation better, segment customers, predict future trends, and locate new market opportunities. When logistics companies gain better control over their inventory, it results in more satisfied customers.
Enables Proactive Decisions
With big data analytics, businesses can go from being reactive to being proactive. Big data in logistics and SCM ensures problems are fixed by predicting them before they happen. Besides, the prescriptive insights gained from big data lead to reduced risk of damage and waste.
Exposes Supply Chain Inefficiencies
One of the ways big data analytics is utilized in the supply chain is cargo monitoring. Before, companies relied on a milestone-based supply chain visibility concept, resulting in logistics blind spots. With such a concept, data on the status of assets is only recorded when goods reach a specific checkpoint or milestone. In between the checkpoints, companies didn’t have the visibility to determine the location of their inventory and the bottleneck or inefficiencies in the supply chain. With the help of data analytics and IoT, which enables real-time cargo tracking and monitoring systems, companies gain end-to-end in-transit visibility from the manufacturer to the delivery stage. With big data, companies are empowered to access crucial data anytime and anywhere, thus enabling supply chain leaders to take proactive actions on unplanned, distracting events and delays in the supply chain.
Big Data in Logistics Is Truly Transformational
Big data has ensured businesses in the supply chain sector no longer have to speculate about the nature of their operations. They can systematically analyze available data to track and monitor cargo delivery, enhance customer experience, cut costs, identify bottlenecks, and proactively resolve emerging issues. However, there is a huge difference between having access to big data and knowing how to transform business effectively. Most companies are still facing challenges with how to use big data appropriately.
RTS Labs provides the right software to help you integrate big data into your operations and maximize its benefits. We have helped several businesses of all sizes with customer logistics and supply chain software that meets unique business needs.
Get in touch with us today to learn more about how we can help.