Change to Data-Driven Strategy in Warehousing and Logistics
Demand growth
Current demand growth on online ordering and e-commerce operations is encouraging logistics and warehousing businesses to invest more in technology and improve their process to be able to address the demand and stand out in the competition.
For the logistics operation, one of the main goals is to increase the loading rate and maximize resource usage. For the e-commerce operator, it is essential to give high-quality customer experience and create loyalty among them to push the sales further. And for the merchant is vital to sell more through the platform and increase revenue and cash flow. In the end, the customer wants to get the goods at the right price, good condition, and timely manner.
At the center of this quartette is the warehouse operator that can impact all of the parties. To address the Warehousing business needs to look to the business strategy and shift more toward data-driven decision making to improve the operation efficiency and address the growing demand. This shift might require changes in assets, procedures, and business’ requirements.
Or, optimizing the asset usage and improving the processes. It all depends on where the business is standing in the sense of digitized resources and data-centric processes.
Strategy improvement
The availability of the data from assets and processes is critical to establish a data-centric strategy. In many businesses, the data are not online, and usually get collected in batch. The batch data collection creates a
gap between events in the business and decision making at the end of the processes. This gap is the most crucial part to be covered and switch the operation data collection from batch to online.
Switching to online data processing will impact both assets in the warehouse and processes. The demand growth will increase the volume of transactions and will justify the automation and improvement of the methods.
Collecting, monitoring, analyzing the data in real-time from assets and processes will help to create a dashboard and alerts from the online data. For example, the online data processing can improve the followings:
- Detecting technical problems
- Addressing technical issues promptly to avoid a decline in performance
- Better estimating the amortization pace
- Lower cost of operation due to preventing loss of materials
- Optimizing the warehouse capacity
- Reducing the order processing speed
- Build a better connection between processes, such as receiving, storage, picking, distribution, handling, etc.
- A better picture of the operational capabilities to address existing and new clients and their demanded business volume
The list of benefits can go on. In this way, the business can achieve a higher level of productivity.
Besides the above improvements, the business can achieve better planning based on realistic KPIs and establishing data-driven decision making. The outcome of the strategy improvement will be the better bottom line for the business and better experience for the quartet I named in the beginning.
Conclusion
Applying changes in any business is difficult and painful in the beginning, but the outcome resulted from the changes is worth the pain.
