Logistics Sourcing: Big Data and Logistics

This post is based on material from the 2013 Spend Matters / Procurian research brief, Logistics Category Perspective: Strategies and Trends in Trucking and Intermodal (free, registration required). Contributors from Procurian include Ed Sands, Global Practice Lead-Logistics and Scott Youngs, Logistics Category Management Group Leader. Spend Matters contributors include Jason Busch, Executive Editor, and Pierre Mitchell, Chief Research Officer.

Although logistics activity can generate large volumes of data useful for analysis and decision making, data and analytics capabilities within many logistics organizations are lacking. Logistics teams may have the raw data, but they lack the ability to cleanse, store, analyze, report on, and visualize the data to drive insight and business value.

As one example of the data gap, sourcing has historically centered on lane-by-lane decisions, with category managers awarding spend based on best price. Then, six months following an award decision, organizations discover that actual costs vary dramatically from expected costs based on bids and awards.

Diagnosing the issues correctly is much easier with accurate data and analytics to quickly visualize and draw insight from that data and drill down to the root causes of the problem. Root causes can range from transportation managers not following the routing guide to the top carriers in the routing guide refusing shipments because of changes in market pricing. Without data, catching issues like these quickly and correcting them is nearly impossible.

Visibility and access to data concerning rates and preferred carriers among all internal customers and stakeholders can address this problem – as can “big data” driven sourcing engagements that factor into account the lowest total landed cost per carrier across lanes, not just on a city-pair basis. In addition, optimized network design is emerging as part of overall sourcing and supply chain efforts, with a new breed of bidding tools helping companies deconstruct the entire inbound logistics effort beyond point-to-point sourcing efforts.

For further analysis of this topic, download the complete Spend Matters and Procurian research brief today: Logistics Category Perspective: Strategies and Trends in Trucking and Intermodal.

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