Data driven decisions in logistics: What does it take?

In logistics, there are currently a lot of hot topics which seem to be completely different from one another. For example: AI, automation, blockchain, and green logistics. But they do have a common denominator: data. All improvements mentioned above rely heavily on data. No matter if you’re automating processes, using blockchain for supply chain transparency, or deploying AI-driven solutions, the quality of your data will determine the success of these initiatives.

How do you know if upgrading your entire transportation fleet for greener logistics actually pays off, both environmentally and financially, if you don’t have quality data about current, estimated and future fleet operations?

Before implementing an initiative, you need to know what the estimated benefits will be. This needs to be measurable, transparent, and put in ink, e.g. to convince stakeholders. After implementation, it’s even more important to follow up with measured data and compare expected and actual outcomes.

Data is not only important when making changes and implementing new features. With quality data, we can have better control over several important parts of the operation:

• - Supply planning: All warehouses want to optimise input/output flow and usage. Combined data from suppliers, transportation and e-commerce can keep the correct shelves filled with the correct merchandise.
  
  
• - Maintenance planning: What good is the expensive robotics automation you’ve invested in if it is always under maintenance, especially during crucial periods with high activity? With the correct data and tools, you can plan maintenance of your robots, forklifts, etc to better fit your business schedule and not the other way around.
  
  
• - Getting insights and understanding your business. Having up-to-date and quality data, you’ll be able to learn insights from your operations and over time identify inefficiencies. The great thing with data is that it’s not biased, it’s not something someone thinks is good or bad. It’s transparent statistics that can be used to drive measurable improvements.
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All this talk about quality data, where do we get it?

In logistics, the usual suspects for data sources are:

• - Warehouse management system
• - Financial systems
• - Time reporting
• - Transportation management system
• - E-commerce
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Can we use any data?

Collecting data is a good start and can usually give you initial benefits even if the data is raw. This usually requires manual handling and investigations of the data which is quite time consuming (think Excel sheets).

To really embrace data-driven way of thinking and working efficiently, and securely and be able to trust the insights coming out from your data, the following needs to be considered:

• - Data Accuracy: Garbage in, garbage out. Inaccurate inventory counts, incorrect shipment details, or erroneous tracking data can lead to costly mistakes. Data needs to be of good quality and accurate. When handling large amount of data input, it always needs to be validated and in most cases normalised, handling outliers which you always find. Regularly performing automatic sanity checks on the data is also a good idea. Luckily, this is something software solutions can help you with.
  
  
• - Updated data: Data needs to be up-to-date to be useful. You want to ensure that the information you're working with reflects the current state of your operations.
  
  
• - Data Security and Compliance: As data becomes more central to operations, ensuring its security and compliance with relevant regulations, think GDPR, unions laws, etc, is critical. Implementing encryption, access controls, and regular audits can safeguard your data.
  This of course, needs to be done on a level that is relevant for your business since this is something that can create significant costs if overkilling.
  
  To set the level of security and compliance, these are some questions you can ask yourself:
  
  
  • - “How would it affect your business if the data collected gets corrupted or disappears?”
  • - ”How would it affect your business if your data is leaked to the public?”
  • - ”Do you store any sensitive or personal data?
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Synergy of complete data

When you have all relevant data points captured across the supply chain, from supplier performance metrics to customer delivery details, the real magic happens! When your WMS, TMS, and other logistics platforms are integrated, allowing seamless data flow between systems, you can analyse and find improvements and insights in your business without having to worry about gaps in the decision-making process.

With today’s fast development of various AI fields, e.g. Machine Learning, Large Language Models, and Neural Networks, this logistics data is even more valuable and can be put to work to find improvements and plan your business to better cope for coming periods of sales and the future.

Where are you in data driven way of working?