Analytics is the topic du jour in the media, your organization and likely your meetings with supply chain partners. There is likely no bigger buzzword in business today, other than perhaps “big data.” And when there are buzzwords, the hype is soon to follow.
The challenge with any buzzword or strategy of the moment is to cut through the fog and determine what value can be derived from analytics. During this process, you need to be wary of two types of individuals who can skew your perspective. Watch out for the eternal optimist who believes that anything is possible with analytics and looks to deploy it everywhere. Also, be wary of the pessimist who thinks that analytics is a new name for statistics and has limited relevance to solve transportation challenges.
Your challenge is to avoid both the inflated expectations and disillusionment perspectives to become an analytics realist. The realist recognizes that opportunities exist to achieve transportation productivity improvement and cost reduction using analytical tools. The realist takes ownership of these opportunities and doesn’t treat analytics as someone else’s responsibility. Active engagement with your organization’s number crunchers or analytics center of excellence is necessary. And, the realist understands the need to build fundamental data skills. They are necessary to take an active role in defining requirements, creating analysis plans, crunching data and interpreting results.
Being able to use analytics to proactively drive transportation and supply chain excellence sounds like a tall order. However, you don’t have to become a data scientist or a technology expert. Rather, you need to find the sweet spot where domain knowledge, IT capabilities and analytical skills intersect. With a bit of training, you can blend your extensive transportation knowledge — a keen understanding of the data, KPIs and goals — with basic proficiency in analytics and technology. This allows you to deploy the self-service analytical tools embedded in Excel, supply chain software and enterprise resource planning systems. Your goal is to interpret the data — something that the data scientists may not be able to do — and use the insights to drive stronger decision making.
Essential Individual Skills
To achieve proficiency in transportation analytics, you need to pursue three skills. The first is data mining, or the ability to logically manage and manipulate data to convert it into information. This involves collecting, cleaning and organizing the vast mountains of transactional scans, dashboard results and process feedback into a usable structure for analysis. You must learn to assemble a logical data set and ask the right questions to derive information-rich results. That means graduating from simply sorting data to using query tools that can categorically summarize data in a manner that provides clear insights.
Once you have learned to consolidate and distill the data, you need to build analysis skills. Data analysis focuses on generating knowledge and those “ah ha” insights to support forward-focused planning. To glean the valuable insights from the data, you need to learn and practice a three-step analysis process:
- Investigate the data mining results to uncover pertinent facts and issues for your situation. Dive into the data to study key segments, recognize patterns and identify relationships.
- Assess the situational impact of those facts on your operations — that is, understand how the data mining results affect transportation performance.
- Target your resources and energies toward performance improvement. Prescribe strategies and recommendations based on your critical assessment and your transportation domain knowledge.
The final analytical skill is data visualization. You need the ability to quickly share your analysis with key stakeholders because their buy-in drives acceptance of your recommended transportation strategies. To gain their support, don’t bury stakeholders with reports and spreadsheets. Instead, learn to use content-rich images like trend charts, heat maps and dashboards to quickly boost situational awareness and provide the call to action. Many business analytics packages contain these data visualization tools to help you deploy the “picture is worth a thousand words” concept.
Required Organizational Capabilities
Certainly, these three skills will make you more valuable to the organization and they can also make your organization more effective. Analytics allows companies to move beyond the historical data and descriptive analysis that tell you what happened last week, last month or last quarter. That’s good, factual information but it does not provide future-focused insights to support decision making.
To become more proactive users of data analytics, transportation companies need to pursue three advanced analytical capabilities. The first is diagnostic analytics that are used to understand why results happened or didn’t happen. A doctor uses medical tests to detect why someone is ill, and then identifies a logical remedy. Likewise, your company can diagnose why delivery failures occur, and then choose a corrective response.
Another advanced set of tools called predictive analytics help organizations anticipate what will happen in the future. A meteorologist uses tools to study weather patterns to create tomorrow’s forecast. Similarly, your company can analyze transportation demand patterns, relationships and causal factors to predict how much service capacity will be required at various times and locations.
Finally, prescriptive analytics help the most innovative companies pursue optimal future performance. Increasingly, professional sports teams use descriptive, diagnostic and predictive analysis results to craft prescriptive game plans. Your company should do the same: Use multiple types of analytical tools to drive network optimization.
Collectively, these analytical tools empower transportation companies to build data-driven models for testing and decision support. The tools also support real-time performance improvement. And, the advanced tools drive the development of novel solutions that promote competitive differentiation.
Analytics are essential to the success of companies across the supply chain and their transportation professionals who manage the flow of freight. The ability to effectively translate terabytes of unstructured data into insight and action leads to greater performance consistency, customer satisfaction and organizational growth. Developing these skills will position you to drive organizational success — and boost your career prospects in the process!