Data silos are a natural occurring phenomenon in business. They exist whenever departments use different systems and have unique reporting needs.
Shippers often use separate IT systems and databases to support similar reporting functions in sales, sourcing, finance, and transportation and logistics. Breaking down data silos across departments is a critical first step to achieve better transportation results.
Creating a single source of truth for supply chain and transportation reporting can pay major dividends. With a cohesive dataset, transportation departments can achieve greater success in more areas than managing budgets.
Static data creates problems, especially when datasets are siloed. If transportation datasets are static and not integrated with real-time sources they can’t account for dynamic factors like spot market rate fluctuations. Taking the time to create a single source of truth during more stable periods of business is therefore critical.
To help guide this effort, consider a two-step process to align and benchmark data across your organization.
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1. Create data alignment
Integrating systems alone does not solve the problem of data silos. Enterprise Resource Planning (ERP) systems, for instance, connect to Transportation Management Systems (TMS) to feed orders and other data for shipping. Where disconnects – and silos – often appear is when departments use various tools, like spreadsheets, to build and distribute custom reports that cause people to interpret data differently from separate systems.
Transportation departments may be using spreadsheets or have their own database of historical rates and lane costs, for example. Likewise, finance may have an accounting system that connects to the ERP to create stand-alone budgeting documents. In the end, each department has different views of data across different systems or perhaps no view of a system at all.
Creating a single source of truth requires aggregating, centralizing and validating separate data sets for a start. Data taxonomy and alignment are also key concepts to prioritize, taking focused leadership to align data with stakeholders and across systems to drive results.
Aligning transportation data requires understanding all the nuances for how data flows behind the scenes and giving it the proper definitions and structure.
As an example of where data may be misaligned, a sales executive may want a report that compares orders from a customer to shipments the customer received. The ad-hoc report may pull data separately from the ERP and the TMS. A data alignment problem may surface when a transportation analyst confuses “shipments” with “loads” and produces a report that does not account for loads that contain multiple orders and shipments.
Load utilization is another example of where a single source of truth can be valuable. When building loads in a TMS, the order data from the ERP may not accurately represent the dimensions (cube and weight) of the products being shipped. As a result, trailers may not be getting fully loaded to achieve maximum efficiency.
Having an accurate rate database is one of many useful tools for transportation and other departments to create data alignment. If the supply chain engineering team wants to add more vendors, warehouses or DCs, using rate benchmarks from a trusted source can show the expected savings, or increases, of the freight lanes to be served by new locations.As another example, using rate data from a trusted source can help the inventory or purchasing department understand how negotiating pricing with vendors connects with the realities of the transportation lanes required to work with those vendors. A custom benchmark report could show how working with that vendor impacts transportation costs.
2. Connect centralized data to external benchmarks
Besides strategic and tactical advantages that come from a single source of truth, shippers can also benefit from comparing performance to internal and external benchmarks. However, you can’t benchmark performance if the numbers from one system do not align with the next.
As part of your strategy, consider ways to improve the flow of information between departments and provide a scorecard that shows if transportation strategies are winning or losing. A scorecard can benchmark performance in critical areas to help everyone adjust the strategic goals of an organization to reflect current market realities.
One of the most important questions that a single source of truth will answer is how your transportation costs align with the market. Crucial benchmarking data for this type of analysis is not available from internal metrics alone.
By using business intelligence (BI) tools, transportation analysts can pull data together from internal and external sources and create intuitive scorecards and benchmarking reports. A dashboard could show how transportation is performing in price relative to the broader shipper market, and to industry peers, across regions or even down to specific lanes.
Intuitive reporting tools can also help transportation make the most of limited face time with senior leaders by focusing attention on pressing matters before they hurt the bottom line.
For some lanes, a shipper may be paying over market to ensure that a top customer is getting the highest service levels. In other instances, a shipper may be paying more because of excessive detention time at facilities. By digging deeper, analysts can share insights with other departments and help devise strategies to be more carrier friendly to get better rates.
By sharing useful reports with internal associates, transportation can play a leading role in helping organizations respond more quickly to changes in the market and drive continuous improvement.
Data-driven resources
Low volume shipping periods are perfect times to tap deeper wells of freight data and analytics to make transportation variables more transparent to all stakeholders. With this visibility, shippers can more successfully plan and execute network optimization strategies.
If you are interested in this topic and want to learn more about data-driven strategies for transportation network optimization, talk to an expert at DAT.
