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What Is the Impact of Big Data in the Transportation & Supply Chain Industries? 11 Possibilities with Big Data

big data in the transportation

Big data will be a defining force in the future of logistics, but the benefits of big data are already being felt. Before thinking about future possibilities, you need to understand how it is currently being leveraged, According to Katrin Zeiler, supply chain entities will be able to lower overall operating costs, create and test newer business models, develop and maintain a higher standard in customer service and attain unsurpassed efficiency. This graphic shows the true scope of impact of big data in the Transportation, SupplyChain & Logistics industries.

big data in the transportation

Obviously, there is a lot going on. But nearly all of these processes revolve around a few common factors, reports DHL Customer Solutions & Innovation, and you need to understand what they mean for the supply chain and transportation industries. If the full organization is involved the following can happen:

  1. Real-Time Route Optimization: delivery routes are dynamically calculated based on delivery sequence, traffic conditions, and recipient status
  2. Crowd-Based pickup and delivery: a large crowd of occasionally available carriers pick up or deliver shipments along routes they would take anyway
  3. Strategic Network Planning: Long-term demand forecasts for transport capacity are generated in order to support strategic investments into the network
  4. Operational Capacity Planning: short and mid-term capacity planning allows optimal utilization and scaling of resources
  5. Customer Loyalty Management: Public customer information is mapped against business parameters in order to predict churn and initiate countermeasures
  6. Service Improvement and Product Innovation: A comprehensive view on customer requirements and service quality is used to enhance the product portfolio
  7. Risk Evaluation and Resilience Planning: by tracking and predicting events that lead to supply chain disruptions, the resilience level of transport services is increased
  8. Marketing Intelligence for SME: Supply chain monitoring data is used to create market intelligence reports for small and mid-sized companies
  9. Financial Demand and Supply Chain Analytics: a microeconomic view is created on global supply chain data that helps financial institutions improve their rating and investment decisions
  10. Address Verification: Fleet personnel verifies recipient address verification service provided to retailers and marketing agencies
  11. Environmental Intelligence: Sensors Attached to delivery vehicles produce fine-meshed statistics on pollution, traffic density, noise, parking spot utilization, etc.

Better Shipping Options.

It demonstrates how complex selecting the appropriate route for a given shipment can be. Shippers must review different modes, ranging from rail to truck, and they must go further by finding the most economic way to get the right product to the consumer at the right time, at the appropriate rate, which may be $0 in many cases, and without any additional issues. Unfortunately, the sheer volume of shippers and carriers working together in the modern world is beyond what any person can possibly expect to review at any given time.

Meanwhile, Amazon is continuing to offer shipping that is free, and this fact is destroying shipping models around the country. However, big data in the transportation industry can give small to enterprise-scale shippers the ability to review how likely a given route will yield the best result for the organization. In reality, the actual shipping cost of Amazon’s products is more than $0, but it is made up for by the profits attained when selling large volumes of products. In other words, selecting the best way to consolidate, mix and transport products can help attain a goal of $0 shipping in the eyes of consumers.

Reduced Operational Costs.

This goes back to lower operational costs too. While shipping routes may play a major role in overall efficiency, big data in the transportation industry can impact overall operations, including warehousing, production, and procurement of supplies. Essentially, not having enough of one supply can result in an unforeseen demand on a company, which drives up the overall value of each item. However, the accessibility of different products online means consumers will be more inclined to simply shop elsewhere, resulting in a loss for the company. This is turning traditional concepts of supply and demand upside-down, enticing more organizations and supply chain entities to utilize big data wherever possible.

Big Data in the Transportation Industry Results in fewer Errors in Delivery & Pickup.

Errors in the shipping process, including errors in delivery or pickup, can result in necessary expenses to the company. While these expenses may seem minimal, imagine how they would evolve if an error occurred once per day on each route. That is not something impossible to imagine, but its cost could easily surpass overall shipping intake for a single day. Furthermore, consumers may demand replacements or refunds, and the public image of the company could be tarnished permanently.

Predictive Operations.

Having the ability to foresee the future would be the ultimate power in business, but it is simply impossible. However, the next best thing is knowing what trends are occurring and adjusting output and operations to mesh well with these trends. This is predictive operations or predictive analytics. It allows an organization to make reasonable, data-based decisions on how to adjust operations on a day-to-day basis. Previously, shippers and supply chain entities were forced to rely on historic data to create these predictions. Yet newer advances in technology, including big data, are being used to provide real-time insight into the expectations and needs of the industry. As a result, forecasts can be modified instantly, allowing for better allocation of resources and optimization across the supply chain.

Final Thoughts.

If you think about these benefits, you will notice they stem from three distinct areas affected by big data in the transportation industry, which are identified in this graphic.

big data in the transportation

Big data can impact the supply chain and transportation industries and go further by defining new options and paths to pursue. Rather than isolating a company to known variables and possibilities, big data in the transportation industry is on the brink of making the impossible, possible. Yet, the most significant improvements are likely to revolve around customer service as all of the benefits of big data coalesce into a single, pleasant and mutually-beneficial relationship with customers. When you really think about your operation, you are all customer service representatives.

You might work behind the scenes, but every action of every employee and person involved in the supply chain is working to make customers happy, and if you can use big data to enhance all operations, your customers will show loyalty and continue purchasing items from your company. Essentially, big data is the greatest resource available to modern supply chain entities, and as a result, big data can be further used to improve business-to-business and business-to-consumer relationships.