Redefining the logistics industry through data-led approach
A new Forbes article contends that the future of supply chains in logistics must be data-led to keep up with rapidly changing times, but companies will need to act fast before data giants can maximise the opportunity to dominate the industry.
The COVID-19 pandemic has pushed the whole logistics industry into overdrive. With it came many challenges and opportunities, with some opportunities taken, some not.
One major missed opportunity is data.
Although data is already quite extensively used in the industry—mostly to build forecasting models and event management algorithm—its full potential is yet to be unlocked.
To ensure that logistic companies take the right next step, a crucial distinction must be made between technology and data.
While technology may provide businesses with a quick boost, this pandemic has clearly shown that it is not enough to prepare them for times of uncertainty.
On the other hand, a logistics company fully revolving around the notion of data would be able to quickly adjust to even an imperceptible event as even the slightest change would be felt by the whole network and affect its structure and outlook.
At this point, a data-led future for the logistics industry seems inevitable, but firms need to act quickly to solidify their position now that Big Tech are also taking interest in the industry. It is possible that data-led companies relying on next day delivery will begin to scale their operations.
A data-led approach can help logistics firms own a much greater stake in their supply chains, even fully orchestrate them.
So how can the logistics industry achieve this?
To transform the future of the industry, the strategy must be guided by platform thinking.
Platform thinking is an approach where the users themselves create value in a system by being a part of it. Adding data to the ecosystem and benefitting from that data as it comes back around.”
Essentially it is about democratizing data, making it readily available for every single person who needs it within the industry.
In fully orchestrating a platform, logistics companies may hold an advantage over Big Tech. Due to the data it already has from 2PL, 3PL, 4PL and 5PL, logistics companies will most likely have the capacity to scale quickly compared to tech giants who have taken years to be robust.
This data will help build a dedicated data software platform that will be an invaluable source to companies even amidst technology decisions that are made in the future.
Another main benefit of a data-led approach for logistics companies is that it paves the way for excellent BI reporting and advanced analytics. Additionally, it benefits everyone through less reducing wasted resources and maximising those that are being used, such as time and talent.
The advantages offered in data are numerous for the already existing logistics firms. However, the question lies in if the industry is able to take this vital step soon enough.