As an industry, transportation and logistics (T&L) is lagging behind other business-to-business (B2B) communities. As individual companies, many T&L providers are also being left in the dust by new competitors. For example, Amazon’s entrance into the transportation industry has changed customer expectations and industry standards dramatically. According to a new McKinsey Institute study, T&L providers must start innovating through data and analytics.
The Necessity of Innovation in the Industry
In response to recent data, including the McKinsey Institute study, Freight Waves associate editor John Paul Hampstead said in an article, “What’s clear is that transport and logistics companies perceived as technology laggards will be discounted against their peers.”
Tim Lefkowicz, Managing Director at AArete, told Target Marketing, “Businesses face a critical need to adjust to the realities that will, sooner rather than later, transform the transportation industry.”
Industry Standards that Must Improve
Just two years ago, the T&L industry began making inroads into big data to shape operations more efficiently. Today, operations teams in most competitive T&L companies have access to data and implement it to design routes, improve supply chain management, and more. Where the industry currently lags is using advanced analytics to drive growth.
According to the McKinsey Institute Study, T&L companies need to:
- Harness existing data for sales purposes
- Find ways to analyze and relate data practically to sales personnel
- Embed analytics into everyday T&L tasks
Harnessing Existing Data
Business intelligence company Sisense explains the challenge and opportunity of harnessing existing T&L data as there being, “a lot of internal, partner, and customer data which can either be incorporated together and investigated for highly specific information or lost in the mess.”
As a solution, Sisense recommends using software and other digital tools to integrate the various forms and sources of data T&L companies have access to. This would offer insights that allow optimization in sales decisions, increasing profit margin.
Presenting Data to Sales Personnel
Trends for T&L sales in 2018 include account-based sales and using predictive analytics to prescribe next steps for sales personnel. Apex IT, a consulting firm focused on improving efficiency for their clients, says that “Sales people just want to know what their next move should be to move their funnel forward.”
Hampstead explains that automating processes and simplifying data presentation to sales personnel allows those professionals to focus on clients, delivering a better, more competitive customer experience.
Embedding Analytics Into Daily Activities
Machine learning can lead to automatic data processing, which advanced analytical data companies can use to make predictions and identify both issues and opportunities in the supply chain. For this type of learning to happen, and for data to be effective at all, T&L companies must start incorporating data collection into everyday activities.
Sales reps, drivers, operational managers, and other members of T&L companies need data collection built into their invoicing, planning, record-keeping, and interactions with customers or business partners.
Competing in a Rapidly-Changing Industry
To meet the changing expectations of customers and keep up with industry standards, T&L companies must begin integrating and innovating with the data they already have (as well as by finding new ways to collect, organize, and leverage data).
Motivation for this kind of change is strong. As the McKinsey Institute study concludes: “Up to 5 percent return on sales is achievable for firms that are able to make creative use of their existing data, keep insights simple for their sales teams, and embed analytics into their daily routines.”