big data

Revolutionary Impact of Big Data on Logistics & Supply Chain Management

Share this blog

The impact of technology on our lives is increasing day by day and we can feel it. We use smartphones every day, smartwatches are now mainstream and can be seen on 1 out of 10 people’s hands, we use GPS to go from one location to another, and many more. We now can’t imagine our life without Google and other tech giants. 

We can now order anything from the comfort of our home and it is delivered to us in a matter of a few days but there is some technology behind this that makes it happen. We all wonder how we can get our products delivered so fast when the only thing we do is tap on our smartphone’s screen?

Well, the technology that makes it happen is Big Data analytics. The impact of big data is increasing day by day and it is leading industries around the world. We all know that data is a big thing now. We all use smartphones and know about our personal data about our web browser history to our social media app activities. These are all examples of our personal data, although big data doesn’t steal your data or use it in any manner, the data we all are producing each day is humongous.

big data

We know that technology has revolutionized the whole economy. Major industries have been revolutionized by different technologies such as AI, machine learning, data analytics. And just like any other domain logistics and transportation industry has also been revolutionized by big data.

Big Data is lending its hand to help businesses to run smooth operations and manage the data traffic. Now that the technology has helped millions even vendors are aiming towards adopting the data solutions to have better control over the supply chain. Big data is impacting the very fundamentals of logistics and supply chain management and it is no less than a boon to business owners.

Even shippers to third-party logistics providers and carriers are taking benefit of this wonderful technology to ease their business.

What is Big Data?

Big data as the name suggests refers to the humongous amounts of data that may be structured or unstructured which helps businesses to figure out the patterns and trends in human behaviour and our interactions with technology.

Big data essentially helps to predict and analyze which decision we as a customer will be making next based on the data, they have about our interactions with the technology whether it is in buying a new product or keep using a particular service.

Companies utilize this technology to know better about their customers and have the leverage to know about your decision making to improve their own decision-making capabilities by knowing what their customers require.

The worldwide market of big data and business is valued at more than $180 Billion and expected to grow to more than the US $250 Billion by 2022. This alone conveys the potential of Big Data.

Impact of Big Data on the Logistics Industry

The basic concept of big data goes hand in hand with the logistics industry. The logistics industry has to deal with a lot of data and have a lot of details that need to be handled with care. Using some sort of analytics will only help them to manage the huge pool of data they have at their disposal. The data seems to be the biggest assets although managing this huge data comes with its own challenges. 

Earlier the companies used to manage this data with different computer software which was neither economical nor efficient. It didn’t take time for this big data to become a burden to manage.

big data

The logistics service providers collect various data such as the size of packages, the weight of packages, destination, the present location of shipment and much more. This data is used to make sure that the package is delivered to the correct position in ample time but earlier this process used to take a lot of time and very few companies were able to provide robust services. Many times, the package was delivered to the wrong address and then the recovery took such a long time that for the recipient it took forever to arrive.

To solve this fundamental transportation services problem big data analytics is used. Big data makes this whole process simpler to understand and more importantly error-free. 

Data sets collected from the various sources are then turned into something useful with the help of big data that is easy to understand and implement. The other common problem of generating different insights from the data is also fulfilled.

How Big Data Adds Value to the Logistics and Supply Chain Management

Companies have a lot of information stored but the real task is to utilize this information and convert it into something that will increase the business value. This is true with almost all the major industries and the logistics business is not an exception. 

Big data helps in deducing the patterns and latest trends of the market from the data and also the cycles of maintenance. This results in the reduction of costs and help in the decision-making procedure. Although for this very reason big data is often utilized to mainly reduce the cost of operation at certain critical times such as the recent COVID-19 pandemic.

It eventually helps in Productivity and efficiency.

Capitalizing on data is a crucial strategy that businesses implement in order to remain in business. There are a few areas where the implementation of big data in logistics is the most impactful.

  • Enhanced operational efficiency by utilizing the maximum resources, improving transparency and making quality and performance better.
  • Improved customer experience in order to maintain customer loyalty and to serve them.
  • Increased revenue by using the data-driven model which is proven to be the most effective.

Benefits of Implementing Big Data in Logistics and Supply Chain Management

Earlier the process of logistics and supply chain management used to be hectic with a lot of inaccuracy, slow and unorganized work. Although after the introduction of big data the suppliers got better accuracy, transparency in the work and certain other insights.

big data

This in turn helps in improving the whole supply chain and makes the task of managing the supply chain easier. The benefits offered by Big data’s implementation are as follows:

  1. Real-Time Fleet Tracking

With the help of big data analytics and the use of other technologies such as RFID tags, GPS devices, bar codes and many more makes the task of tracking the vehicles in real-time easier. These systems are designed to capture real-time traffic data, on-road network data and fleet data.

The real use of all this data is in optimizing the routes and planning and scheduling the deliveries for different locations becomes easier for the logistics manager. The prediction of bad weather or traffic helps to reduce the accident rates and further helps in planning the fastest route possible in real-time from the comfort of their office or home and then the manager can make a decision. This makes it possible for the manager to make numerous influential decisions in a day.

It is the very reason why now we can know the status of our delivery in real-time. Delays often happen to take into consideration certain factors and they can be managed well due to the real-time tracking and if the problem is big enough the customer gets notified about the delay as well.

Although delays are managed with the help of buffer time that is allotted in each and every delivery to make sure even if the delay is there the delivery still happens to be on time.

  1. Efficiency in Managing Warehouse

Earlier the warehouses were managed using either ERP or legacy software but that system is now outdated. Now millions of customers want the real-time update of their product orders and tracking of the same. The customers must know if the product is available before even making the decision to buy it. 

Due to the security and trust issues, customers are now even interested in the details of the manufacturing facility. All this can’t be made possible without Big Data analytics. Warehouse owners need to know the behaviour of customers and how their expectations are changing so that the same can be provided by the manufacturers and supply chain management. 

The task of loading, carrying, unloading and finally delivering a package is now tracked in real-time and the data is used to meet the customers’ needs. It is crucial for the warehouse owners to reduce the transportation expenses such as fuel and for that predicting the fastest route without any trouble and planning the packages in the economical order does their job.

  1. Improved Responsiveness

Responsiveness is an integral part of supply chain management and it impacts the performance of the whole supply chain. Hence, good responsiveness is an asset for the owners. It ensures services such as packers and movers to be on a budget and do on-time delivery to meet the customer needs.

Big data analytics help supply chain managers to know the scenario of transportation services and be competitive in the market. This enables them to improve their customer responsiveness, have better control over their inventory, use their potential to a maximum.

  1. Organized Inventory Management

Supply chain and inventory are considered to be the backbones of the logistics business. Managing the inventory cannot be possible without changing the conventional ways. Earlier the analysis of stocks and sales were done using software that was unreliable. 

Now the retailers and supply chain managers need information about the customer behaviour, product performance and other metrics to organize the inventory based on that. It helps in delivering the most purchased items more frequently.

  1. Excellent Customer Experience

Customers are important for every business and the pillars of the business depend on the customers solely. Hence, understanding the customers and their needs. Companies in order to grow their business need customer’s feedback and support. Retaining a customer is one of the most difficult jobs for a business and big data helps to do that more effectively than any other method.

Big data enables the companies to allow the real-time status of their packages and many more in order to learn about the customer’s insights and reduce the customer’s attrition and get a better understanding of their demands and requirements.

Big data provides analytics that supports the innovation that helps to retain customers by providing them with valuable services that they require. As a result, the business becomes successful in not only earning new customers but also retaining the existing ones.


Leave a Comment

Your email address will not be published. Required fields are marked *