Big Data: Logistically Speaking
Big data is changing the way deliveries are made, and changing business altogether.
Sometimes the noise of it all is deafening, and in technology it is also ceaseless. Big data is currently raging along with the cloud and cybersecurity. Yet, as with many a disruptive force (like Aerosmith or the Beatles) there will always be years of fits and starts.
In the late 1980s a younger Walmart revolutionized time and space with its supply chain inventory management software based on “big data,” and then broadly turned it into action: units moved and their data then processed, interpreted and again actualized.
Rinse, repeat and profit, until your business plan is disrupted in the way that Amazon disrupted Walmart’s.
Big Data Fueling Big Logistics
The logistics involved in getting perishable items to us while they are safe, with minimal waste, is astounding. The governance, the command and the control and coordination of these highly technical pipelines requires 24/7/365 oversight where the human element is forever monitoring and managing the flow of goods.
Have you ever purchased blueberries which were grown in Mexico from your grocery store in Ohio? How about Idaho potatoes in Maine? What about “fresh” salmon from Alaska in Indiana? Coca-Cola, toilet paper, diapers or paper plates, every item you see on shelves today or which you purchase online arrives via a just-in-time (JIT) shipment philosophy.
From Jif Creamy Peanut Butter, to Crest toothpaste, to Charmin bathroom tissue, Procter and Gamble had been a global leader for decades; on return from an extended visit to London, England, Sam Walton was about to energize Proctor and Gamble (P&G). Mr. Walton sought P&G out for help with his new vision. While in London, Mr. Walton marveled at the freshness of the flowers offered by Marks and Spencer. Sam wanted to replicate and automate the logistics of his supply chain process. He requested that P&G, with its hallmark of service, begin drop shipping diapers to individual Walmart stores only when they were needed and no sooner.
Around the same time that Walmart was getting into the big data game, a car company was built on the theory of JIT product development. The company was the Saturn Corporation. Saturn didn’t stock a single necessary product in their factory to build their cars. They were working on the theory that if they didn’t stock anything, they had no overhead. They would order what they needed for the next build and would have everything delivered and ready for work the next day. At the time they were working with Ryder Trucking with an assurance that delivery was completed on time. If delivery was held up for any reason, manufacturing could not occur and business at Saturn would not happen the next day. Payroll would still ensue and money would be lost. Who would be responsible for this major JIT foul? Saturn had it in their deal with Ryder Trucking that the fault would fall onto Ryder. If for any unseen reason, even if it was no fault of Ryder (i.e. weather, accidents), Ryder would cover for the time Saturn lost as a result of interrupted shipments.
JIT on a Worldwide Scale
While we might not all be Saturn, and most of us can’t get Ryder Trucking, or UPS, or FedEx to cover delays in delivery, we are now intimately involved with the transportation industry. With our participation, each day with every click, tap or keystroke, big data analytics are digested and deliveries are happening faster and for less cost than ever.
The best thing about online retail is that retailers can now sell outside previously unreachable marketplaces. People in rural parts of the country are now able to buy clothing from department stores hours away. The world is more connected because of the cloud, big data and innovative companies up and down the logistical food chain. Do you enjoy being able to shop at stores that you were never able to shop at previously?
Online shopping has vastly expanded everyone’s reach. Now, instead of one Walmart store receiving and selling a pallet of diapers, a pallet of diapers is dispersed exponentially.
Whether it is interstate or intrastate shipping to stores, shipments are moving back and forth between retailers and homes all over the world each day. The logistics are becoming more and more complicated and buyers are tending to make their purchases from online stores that offer “free” shipping.
Today UPS, with 15.8 million packages a day, and FedEx’s 6.9 million are generally recognized as number one and number two in their market. As individual consumers, many of us reach out to UPS and FedEx, whether intentionally or otherwise. Yet, thanks to the cloud, big data studies, connectivity and mobile devices, regional, state and local operators are giving the majors a run on delivering Prime parcels.
One of the ways transportation companies are cutting their costs – and no doubt you have encountered this – is that every possible process is automated. When everyone still involved participates, the overall cost comes down substantially. Logistics companies see profits when as few people as possible are physically involved; the more people that touch the box, the more it costs. Keeping customer loyalty is no easy feat. What drives you to purchase an item? Do you prefer to purchase online or in a store? These are the questions answered by related global studies, the results of which provide vivid perspective for global retailers on consumer behavior. As a result of this data specificity, the consumer shipping industry is continuously updating their knowledge and tactics to influence positive shopping experiences while passing this valuable information on to their partners so that collectively, big and small, the industry benefits from the exploration of what drives the path to purchase – from pre-purchase to purchase to post-purchase.
The biggest change this industry has implemented has been their ability to augment our behavior by requiring internet-based customer service. Through sheer persistence and obviation, a culture of dependence is morphing one package at a time. With the elimination of related calls, centers and customer service numbers, we are driven to internet portals that allow a package to be tracked at any time in the shipping cycle. Moreover, the data collected contributes to the escalation in big data capabilities. Through various algorithms behaviors of consumers and their packages are analyzed with the result being competitive shipping services.