Improving Efficiency in Logistics using Data Analytics

Logistics basically means to manage the flow of goods from one place to another in an efficient and timely manner. With the emergence of many e-commerce and on-demand delivery services the logistics network have become more complicated and dynamic than ever. The growing number of production sites and span of operations has introduced new challenges that were not faced earlier by the traditional logistics firm.

Logistics has always been the key in the world on on-demand and e-commerce in order to ensure quick delivery and smooth flow of operations. The Logistic space in India is growing at a very fast pace as per ‘Logistics Market India 2015-2020’, Logistic space in India is close to $300 billion and will grow at a CAGR of 12.7% by 2020.

Use of Technology and Innovation is very crucial in this sector in order as it will always strive for increasing the reach for diverse and distributed customer base and faster shipping at a minimum possible cost. Also logistics is the backbone for supply chain in any industry and therefore efficient logistics network is necessary to make supply chain more efficient.

Today with expanding proliferation of data the logistics space is transforming itself by use of Big Data and Analytics in order improve the efficiency and lower the cost associated with various operations carried out in the logistics industry. Using data-driven decision making it is now possible to minimize the logistic cost by finding out least expensive route for shipping the product on a route-by-route level and by guaranteeing optimal utilization of available resources such as vehicles, delivery boys etc. This in turn also helps in ensuring service levels promised to the customers and also makes the available resource more efficient. Real time services can provide real-time data which can be collected, cleaned, analysed and integrated into the operational activities at any time and at any location.

There are many different ways in which there are tangible impacts on logistics using data analytics. Some of the ways are as follows

Effective and automated Scheduling

Data analytics can be used in more effectively scheduling the deliveries by deciding on the mode of transportation (truck, tempo, bike etc.) and volume of items to be carried in it. Based on the capacity in terms of unit and weight vehicles are allocated automatically and also delivery boy has the exact route and delivery schedule to be followed thus automating the entire delivery process. This aids in faster delivery of goods and delivering the goods within a stipulated time frame. This is possible because of the application of managing and optimizing delivery in real time based on the nearest available delivery boy instead of any random delivery boy. It can also save from the tedious task of running behind the delivery boys and help in more efficient resource utilization and better planning for each day.

Backhaul optimization

Also using data analytics it is possible to find potential synergies with the supplier of goods and various other customer networks through backhaul optimization. This will ensure that after delivering the good from point A to B, there will be another shipment from B to A or some other location say C instead of transporting your vehicle empty load back to point A. This will help in reducing in the overall cost of transportation.

Route Optimization

For reaching from point A to B, there can be multiple routes that can be taken. Different routes have different cost involved based on various factors such as distance, traffic density, time etc. and so it is very important to plan the delivery route in advance in order to make the transportation more efficient and cheaper. Now-a-days the cost associated with routes have become very dynamic in nature due to multiple factors such as construction of new roads within the city, increase in fuel charges, increase in number of deliveries etc. The solution for this is real time delivery route planning and optimization. In this way it is also possible to send accurate Estimate Time of Arrival (ETA) alerts to end user thus building relationship and trust with them.

Real Time Vehicle Monitoring

With the emergence of Internet of Things (IOT) it is now possible to monitor your consignment in real time. You can micromanage it with information such as speed of vehicle, Tyre pressure, battery percentage etc. These multiple data from the vehicle can be analysed and can predict the safety issues in the cargo. This can also provide an early warning that a part is about to fail and an estimated time to failure so that it can be sent for repair before it breakdowns. This saves on the delays and inconvenience that could have occurred otherwise to customers.

Risk Management

It is very important and crucial aspect in case of valuable material or when quality of goods to be transported are important such as ice creams. Real time information helps in monitoring the quality and thief reduction. With the help of IOT devices changes in condition of the goods can be monitored and can be intervened to reduce the risks involved. For example if you want to transport ice cream from one place to another, it is important to maintain the temperature of ice cream to be transported in order to sustain its quality. So a continuous checking of quality of ice cream in real time is important so that the risk can be averted in case of delays or machine downtime.

Change is coming in the way various logistics operations are being carried out by exploiting all of the data that is available that is routinely generated through various operations and through interconnected world of smart products. Successful adoption to this change will definitely give companies particularly e-commerce and on-demand delivery a competitive advantage by better engaging themselves with their partners and customers.