Big data analytics technology: disruptive and important?
Of all the disruptive technologies we track, big data analytics is the biggest. It’s also among the haziest in terms of what it really means to supply chain. In fact, its importance seems more to reflect the assumed convergence of trends for massively increasing amounts of data and ever faster analytical methods for crunching that data. In other words, the 81percent of all supply chain executives surveyed who say big data analytics is ‘disruptive and important’ are likely just assuming it’s big rather than knowing first-hand.
Does this mean we’re all being fooled? Not at all. In fact, the analogy of eating an elephant is probably fair since there are at least two things we can count on: we can’t swallow it all in one bite, and no matter where we start, we’ll be eating for a long time.
So, dig in!
Getting better at everything
Searching SCM World’s content library for ‘big data analytics’ turns up more than 1,200 citations. The first screen alone includes examples for spend analytics, customer service performance, manufacturing variability, logistics optimisation, consumer demand forecasting and supply chain risk management.
The common thread is use of a two-stage logic for systematically finding answers to complicated business problems. Stage one is about classifying information sources according to their data structures, and stage two is about searching for correlation and/or causality among the variables assumed to be important to doing the work better.
A helpful example comes from Dell, where its customer service solution, dubbed ‘Support Assist’ illustrates how this works. Help desk troubleshooting naturally touches many possible information sources to diagnose and fix a problem. Is it user error? Was it a quality problem in manufacturing? Has it been serviced before and if so, how? The service information for one customer can amount to 25,000 log files and 400 GB of data.
In this case, Dell is not on a fishing expedition for some eureka moment. It’s simply trying to get the customer happily off the phone faster, which it has done to the tune of an 84percent improvement. Big data analytics in this case works by sorting and crunching information with a specific goal in mind. Dell is only taking a bite of the elephant, but it sure tastes good.
The same can be said of General Electric, Cisco and Intel improving manufacturing cost and quality; BMW, IBM and BorgWarner in supply chain risk mitigation; Trenitalia, KoneCranes and Honeywell in preventive asset maintenance; and of course, Facebook, Google and Amazon in choosing which ads to show to each of us as we browse their content.
The takeaway is simply that big data analytics is less about mysterious mathematics and more about using our fast-evolving computing tools to answer the questions we care about.
First ask the question
For those old enough to remember, Will Robinson on Lost in Space made a habit of asking a lot of open-ended but important questions of the Robot. The naïve sci-fi mindset of the age was that future computers could answer any question. Reality today is not so far off, but only if the computer has access to the right data and an analytical logic tuned to the question at hand.
Big data analytics in supply chain depends above all on asking the right questions. This means focusing first on what you need to know and building forwards, rather than creating a massive data repository, hiring data scientists and exploring for insight.
Nestlé’s use of big data analytics for demand insight is a good example of this. Its approach uses a stack of information sources and analytical methods to answer the critical but open-ended question of what customers want.
Fully evolved, a big data analytics solution for demand insight might one day work a bit like Will Robinson’s Robot, but like an elephant, it won’t go down in one swallow.
Obvious, but unfamiliar
This all may sound obvious, but it’s the opposite of how we approached the first wave of digitisation in supply chain. Process automation and ERP was essentially eating the elephant all at once.
Big data analytics won’t go down that way.
By Kevin O’Marah, Chief Content Officer, SCM World
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Driver shortages: Why the industry needs to be worried
While driver shortages are a global problem, with a recent survey from the International Road Transport Union suggesting that driver shortages are expected to increase by 25% year-on-year across its 23 member countries, the issue has very much made itself felt for UK businesses in recent weeks.
A perfect storm of factors, which many within the industry have been wary of, and warning about, for months, have led to a situation wherein businesses are suddenly facing significant difficulties around transporting goods to shelves on time, as well as inflated operating costs for doing so.
What’s more, the public may also see price rises as a result due to demand outmatching supply for certain product lines, which in turn brings with it the risk of customer dissatisfaction and a hit to brand and stakeholder reputation. Given that this price inflation has been speculated to hit in October, when the extended grace period on Brexit customs checks comes to an end, the worst may be yet to come.
"Steps must be taken to make a career in the industry a more attractive proposition for younger drivers, which will require a joint effort from government, industry bodies, and the sector as a whole"
That said, we have already been hearing reports of service interruption due to lack of driver availability, meaning that volumes aren’t being transported, or delivered, to required schedules and lead times. A real-world example of this occurred on the weekend of 4-6 June with convenience retailer Nisa, with deliveries to Nisa outlets across the UK affected by driver shortages to its logistics provider DHL.
But where has this skills shortage stemmed from?
Supply is the primary issue. Specifically, the number of available EU drivers has decreased by up to 15,000 drivers due to Brexit alone, and this has been further exacerbated by drivers returning to their home country during the COVID-19 pandemic, as well as changes to foreign exchange rates making UK a less desirable place to live and work. This, alongside the recent need to manage IR35 tax changes, has also led to significant inflation in driver and transport costs.
COVID-19 complications have also meant that there have been no HGV driver tests over the past year, meaning the expected 6,000-7,000 new drivers over the past year have not appeared. With the return of the hospitality sector we understand that this is a significant challenge with, for instance, order delivery lead times being extended.
It is little surprise, therefore, that the Road Haulage Association (RHA) earlier this month became the latest in a long line of industry spokespeople to write to the government about the driver shortage for trucks. The letter echoed the view held by much of the industry, that the cause of this issue is both multi-faceted and, at least in some aspects, long-standing.
So, many in the industry are in agreement as to the driving factors behind this crisis. But what can be done?
Simply enough, outside of businesses completely reorganising their supply chain network, external support is needed. In the short-term, the government should consider providing the industry with financial aid, and this can also be supported more widely with legislative change.
Specifically, immigration policy could be updated to place drivers on the shortage occupations list, which would go some way towards easing the burden created by foreign drivers returning to their home countries. Looking elsewhere, government should also look for ways to increase the availability of HGV driver tests after the blockage created by the coronavirus lockdowns.
Looking more long-term, steps must be taken to make a career in the industry a more attractive proposition for younger drivers, which will require a joint effort from government, industry bodies, and the sector as a whole. As it stands, multiple sources suggest that the average age of truck drivers in the UK is 48, with only one in every hundred drivers under the age of 25. We must therefore do more to increase the talent pipeline coming into the industry if we are to offset more significant skills shortages further down the line.
On the back of a turbulent year for the supply chain industry, it has become increasingly clear that the long-foretold shortage of drivers is now having a tangible and, in places, crippling effect on supply chains.
Drivers, and the wider supply chain industry, have rightly been recognised for the seismic role they played in keeping the nation moving and fed over the past year under unprecedented strain. If this level of service is to continue, we must now see Government answer calls to provide the support the sector needs, and work hand-in-hand with the industry to find a solution. If we do not see concrete action to this effect soon, we are likely to be in for a turbulent few months.
Rob Wright is executive director at SCALA, a leading provider of management services for the supply chain and logistics sector