Agility in the Supply Chain Depends on Big Data

In today’s world, Big Data plays a major role in a company’s success, yet only 8% of shippers and 5% of 3PLs say Big Data initiatives have been implemented that involve their supply chains.

Research firm Gartner defines Big Data as “high volume, -velocity and –variety information assets that demand cost-effective, innovative forms of information processing for enhanced insight and decision making.”* It’s clear from this definition that accumulating vast amounts of data is meaningless unless it is tied to business goals and objectives.

So how do shippers and third-party logistics providers feel about and utilize Big Data when it comes to their supply chain? Earlier this year, the 2014 Third-Party Logistics Study, produced by Capgemini Consulting and Dr. John C. Langley, was published. Although the study deals with many varied aspects of logistics, one section, ‘Big Data in 3PL-Customer Relationships,’ deals specifically with the issue of capitalizing on accumulated data.

When you consider the vast amount of personnel, product, and processes involved in supply chain management, it seems obvious that the more information gathered to improve efficiencies and cut costs, the better. Yet shippers and many logistics providers haven’t capitalized on these opportunities, as is evident in these statistics from the study’s respondents:

  • Only 8% of shippers and 5% of 3PLs say Big Data initiatives have been implemented that involve their supply chains.
  • Only 22% of both groups are currently planning Big Data initiatives for their supply chain
  • 30% of shippers and 34% of 3PLs say they are familiar with Big Data but are unsure as to how it can assist their supply chain organization
  • 31% of both groups say they have no familiarity with either Big Data or the associated opportunities

This is not to say that both shippers and 3PLs don’t appreciate data itself. In fact, the study found that 97% of shippers and 93% of 3PLs agree that improved data-driven decision making was an essential element for success; however, when it comes to Big Data, the accumulation of massive amounts of information, you get the numbers seen above.

There are two areas where shippers see value in collaborating with their 3PLs using Big Data: creating more agile and reactive logistics/supply chain strategies (50%); and supporting end-to-end visibility in the supply chain (53%). One of the main things standing in the way of seizing opportunities in these areas is often the perceived lack of support from their internal IT. Although approximately three-quarters of shippers and 3PLs agree that getting the value out of Big Data initiatives is directly related to establishing and maintaining a good working relationship between IT and the supply chain, 29% of shippers and 21% of 3PLs agree that IT is not a strategic partner.

Large enterprises understand the real power of Big Data in their supply chain, as evidenced by an article in an April issue of Inbound Logistics, “Leveraging Big Data.” The article cites Amazon’s filing of a patent for technology which would support what they termed ‘anticipatory shipping,’ allowing them to anticipate customer demand in specific categories, based on factors such as purchase history and online searches. This would allow them to adapt their supply chain to meet these demands.

For other companies, mining Big Data can help select carriers and routing, identify bottlenecks in their supply chain, and improve sourcing. For many companies, handling all of this internally is just too labor intensive. Plus, companies don’t necessarily have qualified analysts on staff. This is where 3PLs can step in, providing the analytics and recommendations that will accomplish the shippers’ goals. For those providers who have invested in staff and technology, the benefits realized have been well worth the investment…for both the 3PL and their customers.

Are you capitalizing on opportunities from Big Data? If so, please share your experiences with us.

This blog originally appeared on the AmeriQuest blog Website.

*Gartner, The Importance of ‘Big Data’: A Definition, 2012

David Beaudry

About David Beaudry

David Beaudry is Director of Logistics Engineering and Consulting for NationaLease. He brings 25 years experience in surface transportation, logistics engineering, and consulting. His earlier career includes management posts with Ryder System Inc. and National Freight. He holds a Bachelor of Science degree from Central Connecticut State.

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