In today’s challenging supply chain environment shippers face the problem of information overload while attempting to make informed business decisions. Data coming from multiple systems at multiple times creates a constant struggle to make sense of it all. This is especially true for parcel shippers, who sometimes receive package level data that reaches thousands — or even millions — of data points in a month creating an information glut.
The wealth of information produces a great deal of consternation too for the time-strapped logistics professionals who are tasked with deciphering the data, extracting that which matters, and sharing such information in ways that are both meaningful to, and actionable for, company management. Most of the shippers I’ve encountered just don’t have an army of business intelligence experts to properly analyze the volume of data received each month.
This is not to suggest that the data is so voluminous that it’s generic or lacks applicability. The data presents several pieces of useful information, such as understanding the impact of origin-to-destination distance, package weight, and the ever-growing list of parcel carrier accessorial charges. There are many data elements logistics professionals must consider as they aim to balance meeting customer expectations, which have increased in intensity in the last two years, and managing important carrier relationships.
Which Way Is Up?
Interpreting parcel data is not only difficult and a drain on company resources, but it also comes with considerable risk. Because of the limited amount of available time and the overwhelming amount and frequency of data, the potential to make a costly business decision based on an analysis of data that is neither thorough nor accurate is significant. These otherwise unavoidable errors can cause significant disruption and delay in making business decisions to mitigate cost, maximize efficiency, and enhance customer service.
The challenge of parcel data analysis often creates unactionable reports and false key performance indicators (KPIs), which do not support business needs. I’ve seen instances of companies needing to hire additional analysts to produce “emergency” reports, without fully understanding the problems these reports were expected to address, and still others that spent a lot of staff-hours generating reports that were never used. The result of these: increasing company costs without decreasing the company’s confusion.
Put simply, the parcel industry is a complex logistics model to explain to stakeholders as-is, without using manual and time-delayed internal reporting tools. And it’s not just the volume of data coming in or ineffectual reporting that can present problems. There’s also the need to store and secure the data, which can dramatically increase a company’s costs in hardware or software and the needed IT resources to support these new technologies.
A Compass — or a Map — Might Help
While there may be any number of solutions or stopgap measures a company could deploy to manage information overload, my experience has shown that when companies try to navigate to success alone, they often find themselves off-course, or worse, at an entirely different destination.
Parcel shippers may want to consider additional solutions support from trusted partners who possess the deep industry expertise to move goals and objectives forward. There is no shame in asking for help. A knowledgeable partner can be critical in helping you uncover areas of opportunity, such as managing through a complex RFP process, selecting regional carrier participation, and developing robust incentive programs that offer long-term value. Building a collaborative project management-focused relationship with a partner, beyond parcel invoice audit and payment, reduces complexity and increases efficiency to achieve goals sooner.
Given that parcel supplier contracts can be quite complex, another consideration might include outsourcing contract management for your small parcel processes. It’s important to consider the effectiveness, and customizability of the contract retention process with a goal of allowing the shipper to have real-time access to active rates and terms on-file for each parcel supplier. Not only does this process offer convenience via a means of retaining rates, but also acts as a security redundancy to complement the shipper’s internal systems.
Best results are realized when a partner is actively involved, not only in specific parcel projects, but alongside the organization on a regular basis to identify additional areas of opportunity. An effective partnership will be one in which shippers are encouraged to question company assumptions, where they fully understand the problems they’re trying to solve through the effective use of data, and where there is organizational alignment on KPIs to incrementally chart their course over time.
You’ve Reached Your Destination
Success — a shipper’s ability to manage through the complexity of today’s supply chain tumult — depends on the company’s ability to manage through a wealth of data quickly and accurately, proactively identify opportunities, and monitor compliance and future trends. Creating actionable KPIs in an iterative manner to support decision making is critical in servicing customers and managing parcel expense. Having the support of a collaborative partner, who brings the appropriate knowledge and experience of the parcel industry, helps to ensure that you remain on course and reach your destination.
This article originally appeared in the September/October, 2022 issue of PARCEL.