Many businesses want to leverage big data in supply chain initiatives to drive efficiency, cost savings and unparalleled operational visibility. In order to do this, however, a business must have an enterprise-wide infrastructure for information gathering. Only 35% of organizations use a transportation management system (TMS), meaning most companies do not have much visibility into shipping processes, but more importantly, don’t have access to data that’s part of the end to end supply chain insight that’s necessary for big data initiatives.
Use a TMS for Data Collection First
There’s more data available now than there’s ever been, and the potential applications are endless. The problem comes in collecting and analyzing all this data in a timely manner. The first and easiest step is to collect the information, but many companies overlook the impactful data available from transportation.
A TMS will constantly monitor shipping processes and gather data for analysis. Typically, a cloud-based TMS is best for data gathering, as many shippers and carriers are providing information through the same portal, making data collection easier and more accurate.
TMS software is great for cost savings, even immediately after implementation, but its true value comes in the data it provides. It collects information from a variety of internal and external sources, enabling historical data analysis and optimization in freight transport. But most importantly, it contributes a crucial portion of data for end-to-end visibility.
With the help of a TMS, any business can begin collecting transportation data. There are numerous metrics available for analysis and it can be difficult to decide which is most important, especially for those companies still building a foundation of data collection in freight transportation.
What are the best metrics to collect and analyze?
Start with the Basics
It’s best to start with simple data collection – large amounts of information can be overwhelming to manage at first, and you’ll want to take the time to ensure you’re gathering quality data. Most shippers, even with manual processes, will collect some information from the shipping process. Usually, they know overall freight costs, on-time pickups and freight cost by location.
These metrics provide you with an idea of overall performance in transportation, but not much else. You know something is wrong if your overall transportation costs skyrocket for a few months, but you probably won’t know why.
There are a few simple TMS metrics that can expand your understanding of your transportation processes. These 3 reports are the building blocks of transportation visibility:
- Light Load % – This metric reveals what percentage of shipments are sent under the minimum weight requirement of a truckload trailer. If there’s a minimum of 40,000 lbs. on a trailer and a company consistently only loads 35,000 lbs., they will still be charged for a 40,000 lb. shipment. A TMS collects this information through its automated billing features. With this data, you can better understand freight costs and focus your attention on trailer utilization. Light load percentage can be a starting point to start tracking other related metrics like the efficiency of truckload versus less-than-truckload (LTL) shipping, or the effectiveness of freight consolidation.
- Total Loading Time – This metric refers to the amount of time it takes for a trailer to be loaded, starting the second a truck enters a facility’s gates and ending the moment it leaves. A TMS collects this information through EDI scans at a loading facility. Total loading time is important because it provides insight into the efficiency of the loading dock and the entire facility. A company may be efficient at the dock but could keep a driver waiting for hours before they actually start loading. This metric is a foundation for creating more efficient facility procedures, staff scheduling and can help you leverage lower costs since carriers prefer working with shippers who get their drivers in and out of a facility quickly.
- Fuel Detail Reports – Fuel, either calculated as a cost per mile or percentage of freight costs, is a major cost component in transportation. A TMS captures this information through automated billing procedures. Visibility into fuel costs helps create a clearer picture of overall costs, but can also go hand in hand with light load percentage, as fewer trucks will use less fuel. Fuel surcharges and pricing structures are not the same between carriers and across the industry. Consistently reported fuel costs to help you compare carriers pricing methods and can even help you leverage lower base rates in the future.
Tracking these metrics will enable you to branch out into more data, and gain close visibility into a crucial aspect of the supply chain.
Collecting this type of information in transportation is not technically a Big Data initiative, but can provide a foundation for more intensive data gathering in the future.
Want to learn more? Keep reading:
- Create Visibility through Reporting
- New Technology is Providing New Forms of Supply Chain Visibility
- Why Supply Chain Visibility Isn’t Enough