Global trade has been transitioning into the digital age, slowly but steadily. Businesses understand that technology deeply impacts the movement of goods, customer satisfaction and the bottom line. In a fiercely competitive industry, technology has come to differentiate top performers from the rest of the pack. For smaller businesses, this means working harder to attract and retain clients and ensure compliance with constantly changing regulations. Businesses also face rising customer demands, shorter business cycles, and pressure to streamline operations, reduce costs and swiftly adapt to change.
Business intelligence (BI) is more important than ever in this challenging environment. Forrester Research defines business intelligence as a set of best practices, processes, architectures, and technologies that extract meaningful and useful information from raw data. Information is then used to improve decision-making at the strategic, tactical and operational levels. Business intelligence encompasses processes as well as technologies like data warehousing, data management, data analytics and other information management tools. Business analytics, the use of quantitative and statistical tools for predictive modeling, is a subset of business intelligence. Business intelligence is usually applied to different business processes to drive value. BI can be applied to measurement, analytics, reporting, collaboration, knowledge management and monitoring processes.
It can be expensive to build business intelligence capabilities in-house, particularly for small businesses. It’s common practice for businesses to partner with BI service providers to access technology, talent and best practices cost-effectively.
Business Intelligence and Global Trade
Using business intelligence tools, trade participants, service providers and government agencies can facilitate the movement of goods and better analyze the vast amount of data available to them. Companies use BI technologies to extract meaningful insights from huge data sets and use these insights to drive competitive advantage, boost supply chain efficiency and lower operational costs. BI tools also allow businesses to evaluate different strategies and services with “what if” analysis.
BI tools are now a must-have for businesses engaged in global trade and logistics. According to a recent survey of transportation management solution vendors, business intelligence is the highest-ranked functionality requested by customers. Experts attribute the rising demand for business intelligence services to a need for more detailed visibility into spending. Businesses want to pinpoint root causes of poor performance and rising costs as early as possible to be able to control processes more effectively.
BI tools are critical to make sense of the huge amounts of data that other technologies generate daily. Data comes from warehouse management solutions, transportation management systems (TMS), import/export management tools, trade processing tools and compliance tools. Business intelligence tools allow data to be easily accessed, analyzed and managed.
Business Intelligence in Action
Companies aim to reduce costs, improve efficiency, and improve customer service with business intelligence tools. A shipping company may use business intelligence to generate a very detailed view of supply chain costs that was not previously possible with legacy systems. A large third party logistics (3PL) provider, on the other hand, may use BI to analyze every single aspect of the supply chain to uncover the smallest inefficiencies and their root causes.
Boost Delivery Speed
A shipping company consistently achieved above average delivery rates (over 90 percent) for its shipments, but wanted to dig deeper to find out why it wasn’t 100%. Using business intelligence tools from a third-party provider, the company was able to analyze multiple variables that were delaying shipment and identify geography as the main problem. Shipments on certain lanes were delayed more frequently than others due to risk. The company’s transportation planners used this knowledge to minimize late shipments. They avoided congestion by sourcing clients from a different distribution center and adding lead time to buffer shipments in the risky lanes.
Optimize Supply Chain Performance
Business intelligence tools provide a granular view of supply chain processes. One retailer used BI tools to access reports and improve the visibility of transport operations. The retailer can easily track and access 50 different key performance indicators and transportation metrics using the BI platform. These metrics include delivery times, service levels, cost, trends, volume, and weight per shipment. Information was organized and presented using formats such as graphs depending on the type of data and method of analysis. Because data can be viewed in real-time using dashboards and reports, managers are able to make decisions on the fly and more efficiently.
The level of detail generated by BI tools is unmatched even by enterprise transportation management software. Instead of sifting through mountains of information, users can simply look at the dashboard to retrieve the information they need. For example, the company decided to use a different carrier when the dashboard showed a sudden drop in delivery performance in a certain lane. Managers were able to monitor costs associated with the switch and determine whether performance improved with the new carrier.
The company also uses business intelligence to avoid overreacting to red flags that turn out to be exceptions, not large problems. When a delivery is late, managers can determine whether it is an isolated case or a symptom of a bigger problem. With BI tools, improved visibility means improved results.
Improve Customer Satisfaction
A North American shipment consolidation company that offers cross-border services to multiple countries uses business intelligence tools to maintain high service levels and continuously improve business strategy. However, it wasn’t always this way. Back in 2007, the company lacked a comprehensive BI system. Less than 10 percent of business data was captured, and it took almost 30 minutes to retrieve simple information (even longer for historical data). The company decided that it was time to invest in business intelligence.
The company had specific goals for a BI system. It had to be comprehensive (capture data from all areas of the organization), granular, flexible, easy to use, and fast. The company partnered with BI specialist providers for reporting, data warehousing and analytics. One provider handled front-end reporting, while another provided data warehouse services and an analytic engine.
The BI platform’s granular data reporting allowed the company to achieve a deep understanding of its customers and make better business decisions. The company was able to analyze over 50 percent of all business processes, reduce staffing expenses, and enable ad-hoc data retrieval within seconds by multiple users across the organization,
Increase Data Access Speed
One of the biggest advantages of using BI tools is quick access to relevant data. Instead of sifting through information to find insights, trends and issues, users can view results in a matter of seconds. One firm used BI to give its fleet managers real-time data on pickup, delivery, truck and driver performance. For many years, the company’s employees mined data to figure out what was happening. With BI, employees spend less time digging for relevant data and more time on managing the fleet.
To optimize efficiency of its trucks and drivers, the company relies on BI for reports that compare planned routes to actual routes. Managers can immediately spot drivers who make too many stops or take too long on the route, while not worrying about drivers who are only a bit off the route. Managers can tell whether the route was poorly planned or the driver went off route deliberately. When genuine red flags appear, managers can analyze the data, choose the appropriate corrective measures, and address the issue more effectively.