Five reasons for data-driven logistics

July 2, 2020
Five reasons for data-driven logistics

Making the right decisions is the prerequisite for business success. Martin Ebel, Head of Business Intelligence at Seven Senders, sees immense potential in the inclusion of data for logistics optimization. You can read his five arguments here:

Reason 1: Data does not lie

The idea of using data to make decisions is behind numerous catchwords, such as “predictive analytics” or “smart data”. In the end, however, they are all based on the same idea: Data does not lie –  but interpretations and gut feelings sometimes do. Which is not to say that decision-makers should disregard their intuition.

On the contrary, they are the ones who can use the data either to confirm or refute their own opinion. It is also the decision-maker who knows exactly which KPIs to use – the interpretation of data cannot be taken away from them. Data-driven decisions are therefore not about blindly relying on facts and figures, but about integrating them into the process and making good decisions based on a balanced combination of experience and analysis.

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Reason 2: Data-driven decisions are fast

Especially in a dynamic environment like logistics, decisions often have to be made quickly. Since data-driven decisions can be democratized or delegated better than gut feelings (see also reason 3), the decision-making process can be accelerated.

Decision paths are thus automatically shortened. As a result, the supply chain is shortened overall. This in turn creates competitive advantages. This is particularly true for the topic of shipping because shipping logistics is relatively easy to quantify and “hard facts” are often the key.

A very classic decision would be, for example: Which carrier is best suited to my specific requirements? To do this, I need data on (potential) quantities, transit times, available capacities, and of course costs. All this data is available and helps to decide on the best carrier – with minimum effort and time delay.

Martin Ebel“Data-driven decisions are not about blindly relying on facts and figures, but rather about integrating them into the process and making good decisions based on a balanced combination of experience and analysis.”
Martin Ebel, Head of Business Intelligence at Seven Senders

Reason 3: Data helps to democratize and optimize

Since data-driven decisions are not made purely “from the gut” and are therefore bound to one or a few people, these decisions are more democratic. It is also important, however, that not only data leads to decisions.

Ultimately, KPIs help to understand what the reasons for a decision are. A prerequisite for this is that decisions are based on correct and correctly calculated/modeled data. Of course, mistakes can happen. It may occur that data does not suit the decision or was calculated under the wrong factors. In order to minimize sources of error, constant monitoring is necessary.

Reason 4: Data creates transparency – and therefore trust

Supply chains are a very complex construct with numerous participants and process steps. Data creates transparency. In terms of decisions, this means: No individual decisions are made, but they are comprehensible and understandable for everyone.

To achieve this, all participants must be networked with each other and have insight into the data relevant to them. There is a responsible person behind each KPI. Acting in this way creates long-term trust across the entire supply chain and across all partners because decisions are then made for the benefit of the entire supply chain.

Reason 5: Data-driven decisions reduce costs

Data enables better forecasting of events within the supply chain and thus planning reliability. An example of this: Targeted monitoring of lead times allows problems to be quickly identified and measures to be taken.

Shippers can benefit greatly from this possibility, for example in the current corona crisis. Similarly, forecasting shipping quantities for times of limited capacity enables the timely and best possible planning of capacities. This also applies to regularly recurring events, such as Black Friday or the Christmas season. These optimizations of capacity planning through data and data- driven decisions not only improve operational processes but ultimately also reduce costs.

Improved shipping performance

Seven Senders builds on data-driven decisions. Martin Ebel, Head of Business Intelligence, explains how this works:

“We use our knowledge and experience in the various markets to find the right solution for the customer. To this end, we combine data of different types and qualities from various sources in a standardized way, thus enabling, for example, the flexible measurement of lead times. This offers numerous advantages for our customers: They can access the data directly via analytics and proactively measure the performance of the carriers – and make the right decisions for their products to achieve an optimized shipping result for their customers. This creates competitive advantages – Europe-wide.”

About Martin Ebel

Martin Ebel has been Head of Business Intelligence and Head of the BI Teams at Seven Senders since August 2017. He joined the company in September 2015. Prior to his current position, he worked for the company as Head of Operations and as Supply Chain Analyst.

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