Utilizing Big Data and Analytics

Data collection and analysis is taking on greater importance for 3PLs and 4PLs as they optimize the supply chain, increase end-to-end visibility and launch new capabilities for their customers.  In this year’s survey, nearly all 3PLs—98%— said improved, data-driven decision-making is essential to the future success of supply chain activities and processes, and 93% of shippers agreed. Both groups—86% of 3PLs and 81% of shippers—said the effective use of big data will become a core competency of their supply chain organizations.

Logistics providers are getting more operational and tactical with how they use their insight into the supply chain and are creating value by optimizing networks and processes. Among 3PLs, 71% said the greatest value data provides is in improving process quality and performance, 70% said improving logistics optimization, and 53% said improving integration across the supply chain.

Shippers are increasingly interested in data, which could create a competitive advantage for logistics providers that have invested in technology and expertise to gather and analyze information. Shippers were asked to list the attributes they find the most important regarding big data: 60% ranked improving integration across the supply chain, 55% said improving data quality, and 52% said improving process quality and performance.

There appears to be a slight disconnect between logistics providers and their understanding of big data’s importance to shippers. Among shippers, 79% said their supply chain organization sees significant value in the use of big data compared to 65% of 3PLs who reported that their customers’ supply chain organizations see significant value in the use of big data.

This year’s survey also showed that shippers have softened on what they think 3PLs can achieve with big data. In the current survey, 35% of shippers said 3PLs can support their big data initiatives, down from 44% who felt the same way in 2014.

Both parties—97% of shippers and 94% of 3PLs—feel alignment is important to drive the effectiveness of big data initiatives. The need to freely share data also contributes to success, but privacy concerns, the necessary infrastructure for obtaining data and usability of data remain roadblocks that need to be addressed. However, shippers appear to be more comfortable with sharing information than they have in the past. In this year’s study, 20% of shippers said they would not share proprietary information with 3PLs, down from 26% in 2014.

To draw value out of data, shippers and 3PLs will need to continue focusing on improved data accuracy, which could pose a challenge.  An estimated 80% of relevant information is unstructured, and organizing, scrubbing and storing data is time-consuming and costly.