Shifting Trends - BI for Logistics Industry


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Shifting Trends - BI for Logistics Industry

With wafer thin margins, corporates are introducing business intelligence to boost efficiencies reports Sanjay Mehta, CEO, MAIA Intelligence Pvt. Ltd.

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Shifting Trends - BI for Logistics Industry

  1. 1. < FEATURE Shifting Trends With wafer thin margins, corporates are introducing business intelligence to boost efficiencies reports Sanjay Mehta, CEO, MAIA Intelligence Pvt. Ltd L ogistics is an important controlling an organization’s value Analyzing Data component of economic added activities. It is a paradigm To effectively manage the supply development. Increasing shift in the way organizations chains of their customers, 3PLs need competitiveness, however, respond to change in the market. to constantly analyze data collected has led to wafer thin margins Over the last few decades the from various sources and convert it which have affected the bottom role of logistics management has into actionable information. Busi- line of various organizations. The undergone a paradigm shift. It is ness intelligence (BI) tools like data increasing number of players in widely recognized as an extremely warehousing and OLAP (Online An- the industry is one of the major important aspect of overall business alytical Processing) can significantly reasons that one can attribute to strategy. At the same time, a number help 3PLs in achieving this objec- this situation. These organizations of factors have increased the tive. By providing a unified view of are leaving no stone unturned to complexity of logistics management. the entire supply chain, these tools cut costs and boost efficiencies. This has led many companies to can help improve the functioning They have brought in huge outsource their logistics activities of basic 3PL services like transpor- automation into their operations to Third Party Logistics (3PL) tation management, warehousing, ranging from ERP to TMS systems. providers. Today, 3PLs play a critical and inventory management. 3PLs While these new systems will help role in the supply chains of their can leverage BI tools to provide their organizations to improve, they will customers. They are increasingly clients with information specific to not be able to monitor and control viewed as strategic partners who can their supply chain, thereby increas- business activities. On the other play a pivotal role in optimizing the ing their market responsiveness. hand, business intelligence is an supply chain and thereby providing BI tools can also help 3PLs improve excellent means of monitoring and sustained competitive advantage. their own internal organizational 53 INDIA | October 2010 | 53
  2. 2. Multidimensional Analysis Key Performance Indicators for 3PL Providers Multidimensional analysis is the 3PL process Key performance indicators “slicing and dicing” of data. It of- Order receipt Total order receipt time, order information accuracy, fers good insight into numbers at a revenue per order more granular level. This requires a Vehicle load planning Planning accuracy, capacity utilization, resource utiliza- solid data warehousing / data mart tion, load balancing backend, as well as business-savvy Vehicle routing and scheduling Route utilization, scheduling accuracy, rate of route addi- analysts to extract the necessary in- tion / removal, vehicle availability formation. Dispatch operations Vehicle loading time, on time vehicle dispatch, order dispatch accuracy Finding Correlation Among Goods in transit Rate of update of location information, average transit Different Factors time, cost of transportation per ton This is in effect analyzing business Receiving operations On time vehicle arrival, vehicle unloading time, order intelligence deeply. The questions receipt accuracy, percentage of goods damage asked are, “How do different factors Order delivery Total order delivery time, on time deliveries, goods deliv- correlate to one another?” and “Are ery error rate there significant time trends that can be leveraged/anticipated?” Data eliminate bottlenecks, the ability to is seen as a wealth of information by analyze all activities in the logistics most IT enabled organizations. Cor- The fundamental purpose of process is vital. The fundamental purpose of porates, in fact, are adopting BI to receive accurate information regard- business intelligence (BI) is to business intelligence (BI) is to deliver ing its various stakeholders. Thus deliver fact-based information fact-based information to improve BI can be applied in the day-to-day to improve the efficiency and the efficiency and effectiveness of business. To better understand their activities of an organization, for it to extract the most from the data gen- effectiveness of business. business, organizations need intuitive erated by the organization’s various query and reporting tools for advanced OLTP (Online Transaction Process- and consumer-level users to obtain ing) systems. access to critical business information functions like human resources and that supports strategic and tactical Providing Tools financial management. decision making. BI can be classified Business intelligence (BI) provides into the following categories: tools that enable the delivery of in- Aiding 3PLs formation to decision makers. The The 3PL industry is in a state of tran- Business Operations information delivered comes from sition. Logistics providers are add- Reporting relational data sources or enterprise ing more and more services to their The most common form of business applications (e.g., enterprise re- portfolios as customers demand intelligence is business operations source planning, customer relation- more integrated solutions. 3PLs are reporting. This includes the actuals ship management and supply chain). viewed as strategic partners who can and how the actuals stack up against Business intelligence includes: optimize the supply chain, reduce goals. This type of business intel- the cycle time, and provide unprec- ligence often manifests itself in the Query Tools edented customer responsiveness. standard weekly or monthly reports Standard query tools allow the users One method to effectively provide that need to be produced. to view information by answering a such services is information tech- series of predefined questions. The nology. The more sophisticated 3PLs Dashboard business problem that query tools have quickly embraced IT to enable The primary purpose of a dashboard resolve is the need for users to com- better coordination of activities by is to convey information at a glance. bine, analyze and export information providing tracing and tracking fa- For this audience, there is little, if from several sources using a static cilities to its customers. But this is any, need to study data deeply. At the format. The standard query tool is an hardly enough to ensure sustained same time, presentation and ease of excellent mechanism for segment- competitive advantage. For total effi- use are very important for a dash- ing the user population into groups: ciency in the supply chain and also to board to be useful. users who need ad hoc query 54 INDIA | October 2010 |
  3. 3. capabilities, prompted query capa- portant to any BI implementation, so strategies for the organization. bilities and static query capabilities. the KPI defined for the various proc- The industry’s 3PL providers who esses would enable the data to be an- adopt BI solutions which exhibit Reporting Tools alyzed and presented to the user. BI only behavior would get solutions Reporting tools provide the capabil- uses KPI to present in a dashboard. in BI analytics space. Such solu- ity for presenting information in a Further, 3PL players can use OLAP tions would not only show present or visually appealing format. The busi- tools for generating MIS reports for market behaviour and other related ness problem that reporting tools ad- evaluating the operations performed activities, but also predict future be- dress is the need for organizations to in the organization. Reporting tools havior and suggestions. This is also create permanent records represent- would be of significant use for mak- the future of BI in transportation. ing the business at a specific point in ing daily operational decisions for Thus 3PL providers should embrace time that can be easily disseminated managing a 3PL’s daily operations. A BI to stay competitive and be suc- to others. Due to the formal nature of 3PL can also use data mining tools cessful in the race for market leader- the information that reporting tools to evaluate strategic factors both ship and customer satisfaction. represent, it is important to develop internal and external to the organi- The 3PL industry is in a state procedures for maintaining and up- zation and identify patterns of busi- of flux. The internet, supply chain dating the data that they present. ness and operational behavior. A 3PL management and globalization have can then take decisions which are made sweeping changes in the ex- OLAP Tools strategic or tactical in nature using Online Analytical Processing (OLAP) data mining tools. tools are for users who require inten- The direct benefits of the usage sive data analysis capabilities. The of a BI solution are reduction in the BI solutions are seen as more business problem that OLAP tools turnaround time for preparation solve is the need for users to “drill” of reports, direct and faster access of a need than a luxury. 3PLs seamlessly into information when to data needed to support decision can implement BI solutions additional details are required. OLAP making, analyzing the ebb and covering either key operations tools provide users with ad hoc access flow of businesses across services, to data on an as-needed basis. These regions, clients, pricing, currencies, or the operations covering their tools insulate users from the details and market factors in time etc. entire organization. surrounding the retrieval of informa- The indirect benefits are improved tion from the data warehouse. sales performance, data quality, productivity etc. This KPI is just a Data Visualization Tools drop in the ocean and there can be isting business models of 3PLs. To Data Visualization tools help in the various KPI which can be defined by compete in this market, a 3PL has visual interpretation of complex rela- an organization in conjunction with to continuously improve its existing tionships in multidimensional data. its BI consultants to capitalize on services, add new services based on Graphics tools are used to illustrate and make the best of BI technologies technology and make its internal data relationships. Dashboards and available in the market. functions more effective. BI tools scorecards have emerged as a means BI solutions are seen as more like data warehousing can signifi- of helping organizations do just that of a need than a luxury. 3PLs can cantly help a 3PL provider achieve by providing instruments for mak- implement BI solutions covering these objectives. ing decisions, delivering long-term either key operations or the Recognizing the need for an effec- plans, responding quickly to market operations covering their entire tive business intelligence solution is changes, providing greater control organization. BI is here to stay as just the first step. The real challenge over the execution of strategy and the rate of adoption is increasing is to make it an integral part of the promoting accountability. Both are because organizations are looking decision making process and to set dynamic tools that make it possible towards data as one of the key assets clear objectives for business intel- for organizations to respond to short- of the organization. Leveraging data ligence solutions with management term market changes, support tactical means that it needs to be harvested in support so that the company achieves decisions and keep strategy on track. a beneficial manner. Harvesting data complete success. to gain an edge over the competition Key Performance Indicators can be done with ease by using well- The author can be reached at sanjaymehta@ Key Performance Indicators are im- qualified BI solutions with unique BI INDIA | October 2010 | 55