Data is king, and if you are a logistics and supply chain professional, you understand the importance of clean, accurate data. You’ve told your leaders you need better insights to more effectively run your business. And you advocated for resources to help you collect big data, or sought outside help to pull it together. The good news is—you now have more data than you can handle! The bad news is—you now have more than you can handle. Now that you have all this logistics data, how do you leverage it?
Step 1: Define The Goal.
One of my favorite supply chain management and business book, “The Goal,” by Eliyahu M. Goldratt. It’s an allegory about a man whose manufacturing plant is struggling, and he has so many problems he doesn’t know where to start. While many people praise this book for inventing the Theory of Constraints, it also addresses the best four words any leader can ask—“What is The Goal?”
As a logistics professional, what is your goal? Are you trying to reduce freight costs? Improve speed? Improve reliable deliveries to your customers? And how does your goal support your company’s broader goal? The goal will tell you where to start: analyzing freight spend by mode, evaluating transit times, or investigating track-and-trace delivery times.
Step 2: Trust the data, then the experience—in that order.
Data can tell you nearly anything you want to hear. The challenge is to let it drive your decision, and be careful not to use it to justify a decision.
First, your analysis will highlight interesting insights, sometimes the opposite of what you expect. Second, use your experience to understand why those results are occurring. Is your parcel spend higher than you expected? It may be your system is not optimized for the right mode of transport. Or it may be a process issue resulting in a need to expedite late shipments to customers. The worst answer to why these results are occurring is: “Oh, it’s probably an issue with the data.” A data-first approach helps you uncover hard truths in your logistics business.
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But how do you know if it is a data quality issue, where your data is not as clean as you assumed? Again, the data will tell you. Did your monthly freight spend come in higher than you expected, yet your analysis shows you have more invoices than delivery statuses? The issue may be your budget, not your actuals. On the other hand, if you’re receiving high compliance charges from your customer for late deliveries and your carrier data says you delivered on-time, there are definite gaps in one (or both) sources that need addressing.
Step 3: Take Action.
Some of the best data analysts and logistics analysts see the patterns and know where the issues are but don’t have the authority or support to take action to make the necessary improvements. There is no success if you know The Goal, identify the hard truths, and yet don’t take action to improve your business results. Share a summary of your data findings with your leaders. Be sure to include your recommendations on how to solve the problem to better deliver on The Goal. You may also need help from upstream or downstream partners in the supply chain, so present those requests in a way that will show how they may also benefit from these actions.
After all, clean, timely, and accurate data doesn’t only benefit logistics professionals; it helps finance, warehousing—and your customers, too.