Finding Supply Chain Savings with Data Analytics & Reporting
If there was a way to identify areas that could improve your bottom line, wouldn’t you want to know them? With big data analytics and reporting through your 3PL, you can pinpoint numerous places in your supply chain that can be improved for greater efficiency and savings.
In this article, we will review the ways data analytics and reporting can help you make better business decisions that optimize your supply chain.
What is Data Analytics?
Data analytics is the science of examining raw data to help gain insight and draw conclusions about information. It is used to determine whether the systems in place successfully protect data, operate competently, and succeed in achieving an organization’s overall goals.
Data analytics allows companies to make better business decisions. It gives you a predictive instead of a reactive view of the data.
Ideally, you want to strive for predictive analytics. Predictive analytics goes beyond current data collection. It entails understanding data that is absent but is required to make progressive changes. As time passes, and you obtain more and more data, your predictive analysis will become more and more accurate.
Data analysis can seem overwhelming to a company; who is going to collect this data? Who is going to analyze the data? The great part about data analytics is that it can be fully automated with little to no employee interaction. If you are already partnering with a 3PL for other outsourcing, talk with them about handling your data analytics and reporting as well. Chances are, they will have all the technology needed to handle this request, with little or no cost to you.
Reviewing your Data Analytics with Report Cards
With personalized data analytics, your 3PL can also create custom dashboards to show you exactly what data you are interested in. One of these is very similar to a report card, giving “grades” to each of your shipping locations. Essentially, this keeps track of mistakes that could be costing you money.
Custom report cards can show you how many errors were made that month, based on locations. How many times was the wrong weight entered? How many times were a duplicate bill of ladings used? How many times were you missing accessorial charges? All of these errors can not only drastically skew your forecast, but can hurt your bottom line.
Knowing where these mistakes are being made, gives you the opportunity to fix them. For example, if you know that your Ft. Myer’s location has very few mistakes, but your Richmond location is riddled with errors, then you know where logistics managers need to focus their attention.
Identify Trends with Data Analytics
Data that you collect from your freight management 3PL can be used for much more than just analyzing the shipping portion of your supply chain. This data can also show many different trends in your sales, both geographically and from month to month.
Since the reports will show you comparisons of say last January and this January’s shipping data, you can tell if your outgoing shipments have increased, decreased or remained the same. If they have decreased, this will trigger that you may need to dig deeper into why there would be a drop in sales. If it remains stagnant, you may want to look into additional marketing or advertising to increase sales. If they increased, you could think about implementing practices made in this market, into another one.
This information can also show you month to month what you’re sending out of each location, showing you your peak sales months and lulls. This data can help you strategize, we need to up our marketing in X, Y, and Z months as they are the months with the lowest sales.
Additionally, this data can show geographic information. It can show you how many shipments are made to each state per month. This data can help you identify what regions are doing well, and what regions may need some focus. It can show you where your growth opportunities lie.
There are so many possibilities when it comes to data analytics and reporting with your freight, which is why finding the right 3PL for your company is so important. If you’re interested in learning more about how data analytics can improve your supply chain and save you money, contact us here at LTX for a free consult!