From the point of view of computing, all the movements around us produce data that can be monitored by control systems. These data, for example, the number of passengers boarding a bus on a Monday morning, can be translated into valuable information for, let’s say, transport companies who need to know how many new bus lines are needed in some city. This information, when analyzed and interpreted from different technical perspectives, acquires an instrumental value and can become knowledge. Knowledge, then, is what helps all organizations and individuals to implement important changes in their processes and to make decisions that allow them to develop those changes.
Here we are talking, essentially, about Big Data. What is that, and how does it relate to Logistics? Well, Big Data is the storage of such tremendous amount of data produced by human interaction and its derivatives (here we could also include Artificial Intelligence,) as well as the procedures used to find repetitive patterns within such data. As I pointed out, the purpose of such storage is the production of information, which will then become applicable knowledge. Big Data is said to be one of the most relevant assets today, the one with the greatest economic value since it actually affects any commercial, political, cultural or social process. That, of course, includes industry, supply chains, and all its logistics processes.
How Big Data affects Logistics is in fact considered as one of the most important and current trends in this field. After all, Big Data allows companies to know their customers in depth (how they deal with products and services.) All business sectors use this new technique, including fields such as medicine, stock exchanges or construction. Having a wide variety of data on the mechanical problems of cold chains can significantly improve the transport and preservation of food and medical products in ways that can’t be noticed by implementing other monitoring means.
The way to use data and to turn it into knowledge in Logistics is not very different from the way it’s done in other fields. In fact, any device capable of storing and processing information is a source of data. What has to be done is to organize them so that they acquire a useful meaning for the companies. In this way, the type of data that you could analyze is, besides the web content obtained from your website, apps or social media, the records of invoices, details of phone calls, biometric information (fingerprints, facial and voice recognition,) e-mails, or the data produced by motion sensors, which let you know what, when and by whom has anything been taken in or out from a warehouse. This can influence, for example, how to minimize damages to merchandise at any stage of the supply chain.
Logistics experiences many changes and adaptations to the new digital environment. The logistics sector demands, necessarily, the constant collection of data for optimizing its processes. Currently, many distribution and logistics companies have already incorporated this revolutionary technology, introducing tools that store and process information for obtaining more accurate and reliable data and designing strategies to ensure effective decision making.
Big Data aims at achieving five fundamental values. The first one is volume. The incoming data from machines or automated devices is massive. The second value is variety. Nowadays, the origin of data is diverse. It may come from multiple media and platforms: cameras, sensors, GPS, damage reports, Internet purchases, etc. The third one is veracity. The great variety of data produces communication problems, which can make us doubt the veracity of all of them.
The fourth value is velocity. We live in a hyper-connected era, so data is generated every second passing. This large volume causes the data to become out of phase quickly and to lose their value, while new ones are constantly produced. Finally, we have value. The data once converted into information, have a value that companies take advantage of to get the most out of them. This is probably the most important element of Big Data.
In short, taking advantage of Big Data in logistics is a definitive must. Efficient asset control, demand segmentation, more agile distribution, product and machine tracking, advance pricing, and the optimization of distribution routes are all aspects that simply can’t be developed and improved only by collecting and analyzing data by human minds and means. Above all, due to the great and rapid production of information.
The application of Big Data in the logistics of companies will undoubtedly allow a more efficient management of all production processes. If companies begin to incorporate these new technologies into their work dynamics, their supply chain will be more profitable and will surely offer a better customer shopping experience. This means an important optimization of the sector in general: Besides obtaining profitability, the number of clients will increase and future commercial possibilities will be evident.
* Featured Image courtesy of luckey_sun at Flickr.com