With 80% of global trade volume being dedicated to transportation via commercial shipping, it is crucial for logistics companies to utilize data analytics in their overall company strategy to ensure that they can keep up with shipping demand. Here are some ways in which logistics companies are using analytics to track and improve their logistics strategy
Investopedia defines logistics as "the overall process of managing how resources are acquired, stored, and transported to their final destination". This includes inventory control, pricing and ticketing, and merchandise assembly. Logistics companies work hard to track and analyze data to ensure they are providing satisfactory services. Below are 3 ways that data analytics aids in the improvement of logistics companies.
Technology now exists where both the customer and provider can both track the shipment of goods in realtime, starting from shipping label creation all the way to when the item was delivered. While it's commonly know that this helps the recipient to manage package delivery expectations, it also benefits the supplier. The supplier can aggregate all shipment information and analyze data such as average delivery time, most common reasons for shipment delays, average product loading time, and transportation health/reliability to make improvements to their shipment processes. This information can also be used to evaluate employee/driver performance.
Speed of delivery is one of the biggest measurements of success for logistics companies, therefore route optimization is key to making on-time deliveries. GPS data, combined with weather forecasting, road construction data, shipment delivery schedules, and trucker’s preferred drive schedule data can be used to create a personalized, optimal route and drive schedule for each driver to take to ensure that each shipment arrives on time. Ex: If a company is delivering frozen goods, they will need to analyze temperature threshold vs delivery time vs driver schedule vs forecasting and road closures to ensure they deliver the frozen goods on time, BEFORE the goods thaw out.
As companies expand their warehouses, it is important to have efficient tracking to ensure that their warehouses are well organized and managed to keep up with customer demand for products. Analytics can be used for inventory management and to predict the quantity and warehouse location that inventory will sit based on demand for a product. This boils down to tracking information such as how much product is bought over certain time periods (to predict product demand and inventory purchase) and top locations where the products are delivered( to improve warehouse space management).