Tap Your Wealth of Data for Improved Logistics Management — Part 2

Every shipment is a font of data — use it!

 

In part 1 of this two-part series on using KPIs and dashboards to improve logistics management, we looked at the overall picture and zoomed in on using data to increase profitability. This time we look at two other ways to optimize operations with data.shipping consultants

  1. Make Better Decisions

As we noted in part 1, a shift is needed in the way logistics companies perceive the utility of the data that’s accumulating every day in their operations. Merely using data to justify decisions that have already been made is failing to taking advantage of these concrete statistics to improve both the bottom line and your relationships with customers.

An excellent example is choosing service levels. How often have you paid for a higher service level than you needed? Do you know? When and how did you find out? If it was after the fact, there’s no way to recover that wasted money. If you’ve paid for 2-day or next-day air, but the shipment would still arrive within that window if it traveled via the ground network, the carrier is going to put it on a truck and pocket the difference in cost. A review of your shipment data will show you where this scenario occurs, and you can use this information to make better decisions in future.

This same principle applies to routing decisions. Most shippers have arbitrary cutoffs for when to ship LTL rather than small parcel, but, again, this is not efficient. Several factors — among them, rates, lanes, and product type — factor into whether a shipment is large enough to ship with a common carrier or would be more cost- and time-effectively put on a truck. Setting up data analysis processes that take into account all the relevant factors will enable you to determine the best route to take.

  1. Plan Strategically and Utilize Resources

Strategic planning considers aspects of the distribution network that have long requisition and authorization cycles, and often involves comparing “what-if” scenarios and other hypotheticals to find ways to improve efficiency and better utilize resources.

Historical data like shipping patterns and costs — as well as seasonality — provide benchmarks that enable shippers to compare new shipping options and alternative strategies.

The great value in having a large pool of data and a dashboard or other software that can help you analyze it is that it allows you to compare hypothetical scenarios — for example, in determining the optimal location for a potential supplier or other distribution point. Data analysis enables you to accurately ascertain the cost impact of the various scenarios and to budget accordingly.

This applies also to capacity planning, such as optimizing warehouse staffing for peak times or maximizing capacity utilization for equipment to improve the load factor on trailers.

It’s not difficult to identify some basic KPIs and other metrics that will help you optimize your logistics operation, drawing on the data — historic and real-time — already available to you. And with each successful decision will come the confidence and the enthusiasm to dig deeper and invest more to reap even bigger financial and operational benefits.

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