How a Data Strategy Becomes the Enabler of Your Transportation Business Strategy

In recent years the transportation and logistics industry has become increasingly customer-centric, offering customers transparency in the supply chain with on-demand delivery and tracking options. All of which is possible due to effective data strategies that empower transportation and logistics organizations to deliver hyper-personalized services. But is it possible for transportation and logistics organizations to further utilize their data strategy to increase their competitive advantage in the market?

The Drivers for Data Transformation

As there are almost no switching costs for customers, it is vital that transportation and logistics organizations find a way to create carrier loyalty. While technology has already revolutionized the way the industry operates, with carriers using hyper-personalization, customer as a partner, and pay-as-you-go models, there is still room for improvement. Organizations that implement a digital transformation and change management program can help differentiate themselves from their competition. These differentiations can include increased sustainability, faster last mile deliveries, optimized operations that notify customers of delivery windows, and a smoother omnichannel experience across multiple touchpoints.

Other external drivers for data transformation include:

• A Complex and Connected Supply Chain
  Data/information and speed are critical to ensuring deliveries are made on time, every time.
  
  
• Customer Expectations
  Customers increasingly expect to have items delivered their way when it is convenient for them. By better understanding your customer, organizations are better placed to be able to come up with solutions they appreciate.
  
  
• Need to Diversify
  Generating new revenue sources by leveraging new ecosystems, including the connected data from their own organization as well as from their partners in the ecosystem, will enable transportation and logistics organizations to thrive, and in some cases survive.
  
  
• Sustainability
  By optimizing loads or changing transportation modes based on data, organizations can contribute to a better and more sustainable environment.
  
  
• Advanced Technologies
  The increase in advanced technologies can generate faster and better insights from consumed data.
  
  
• Lowering Costs
  Effective data usage can streamline supply chain operations, which not only helps lower costs, but also reduces the carbon footprint by contributing to minimal wastage.
  
  
• Uncertain Macro-Economic and Geopolitical Environment
  Events around the world create risks that need to be managed. Enhanced efficiency, visibility, and agility across the value chain is essential to compete.

Why Data Strategies Should be Part of a Transportation and Logistics Organization’s Business Strategy

Data has always been an invaluable resource in business, but organizations have always found it challenging to unlock that value due to the high volume of data and the challenges associated with gathering, organizing and activating it.

The volume of data that exists and is available to organizations is increasing quickly. In fact, 90% of the data in the world today only became available in the last two years. This rapid growth in the volume of data has increased the challenge of managing that data, amplifying the need for a data strategy. Developing this data strategy is one way that organizations can overcome these challenges and access the value of their data while efficiently using their resources. 

Challenges to Using Data Strategies as Part of a Business Strategy

When it comes to integrating a data strategy into a business strategy, there are several challenges holding organizations back. These include:

• Data Growth Issues
  One of the most pressing challenges of data is storing these huge data sets and making sense of them. The amount of data being stored in data centers and databases is increasing exponentially, making it difficult and expensive to handle.
  
  
• Lack of Skilled Resources to Manage Data
  Organizations face a lack of data professionals. As data handling tools have evolved rapidly, the number of skilled data professionals has not kept up. Transportation and logistics organizations need to upskill and reskill their employees to keep up with this trend.
  
  
• Data Literacy
  In addition to the data professionals that gather, store and analyze the data, there needs to be greater data literacy throughout the organization. Every employee needs to become a data steward and understand the value and importance of the data they come across, have access to and use.
  
  
• Data Security Issues
  Transportation and logistics organizations focus on gathering, storing and analyzing data, with security often being an afterthought. This can be a large threat to organizations as unprotected data repositories can be a target for hackers.
  
  
• Data Integration Issues
  Compatibility and data integration can be tedious when handling multiple sources of information. Organizations need to find the right IT solutions or integration tools to solve their data integration issues.
  
  
• Organizational Cultural Issues
  Transportation and logistics organizations have been traditionally hesitant to share data- believing that it will increase competition or provide insights into inefficiencies in the supply chain handling process.

How Can Transportation and Logistics Organizations Become Even More Data-Driven?

Being data-driven requires an organization to base its strategic business decisions on data analysis and interpretation. This data-driven approach can enable organizations to utilize data with the goal of improving their processes, product portfolio, customer service and quality. A strategy which is focused directly on business outcomes, combined with the presence of a cloud infrastructure can help achieve this target.

Some approaches that transportation and logistics organizations can use to become even more data-driven include:

• Establishing Data-Driven Growth Strategy
  A data-driven growth strategy can accelerate an organization’s transformation journey. It can also virtually self-fund through operational improvements, simplifications and the ability to apply automation and AI.
  
  
• Start Small and Scale Up
  Build up your internal knowledge, experience and skills by starting with smaller questions before investigating and solving more fundamental issues. Tangible results from the smaller projects increases trust among all stakeholders, facilitating the acceptance of future projects.
  
  
• Empower Frontline Employees
  Cloud-native front-end low code applications can be matched to frontline employees, enabling them to collaborate across the organization’s value chain.
  
  
• Training Employees
  Training, upskilling and reskilling employees to be able to utilize and apply machine learning, robotic process automation (RPA), and AI will help your organization in the long run.
  
  
• Single Source of Truth
  A single, centralized source of truth should be secure, democratized and easily accessible to the right people to ensure that data flows in the right way around the organization.
  
  
• Collaborations
  External collaborations can assist the transformation process. Partners like digital transformation or AI consulting firms can enable organizations to tap into cross-industry expertise without worrying about sharing confidential information with competitors.
  
  
• Creating an Information Catalog
  AI can be used to create a common repository of data that can visualize all data (at rest, in most, historical, transactional and external) and normalize it into an information catalog.

Looking to the Future of Data Strategies in the Transportation and Logistics Sector

As we have seen, the transportation and logistics sector has led the way in utilizing data to deliver a better customer experience. The challenge for the sector is now to introduce data strategies into their business strategies that empower improved business outcomes and support organizations to obtain a competitive advantage in their market.

Is your organization ready to fully benefit from the potential of integrated data strategies? Learn more about how MLOps can play an important role in staying relevant and seizing business opportunities in the future.