Business Intelligence (BI) is a hot topic amongst most industry heads, irrespective of the nature of their trade. BI is the use of commercial data to create present and predictive interpretations of business operations. But, can a third party logistic provider benefit from investing in BI? Yes, and here’s why –
Business Intelligence’s Impact on the Logistics Industry
The third-party logistics industry (3PL industry) is highly competitive. Every 3PL company is trying to outshine each other. The use of BI can give companies significant advantages over competitors. For instance, BI can be used to improve warehouse performance. BI tools can assess a company’s historical data to predict future orders.
The services provided by a third party logistic provider are all based on data analysis. The use of BI tools can only improve the quality of their services. Here’s why businesses should only team up with 3PLs that use BI tools.
Data is King in the 3PL Industry
Since top 3PLs handle large volumes of orders, without efficient data analytics, they wouldn’t be able to provide precise services. Each and every stock item needs to be tracked, traced, and recorded on the company’s database.
Only the leading 3PLs can offer the level of analytics capabilities required to manage millions of products. These 3PLs use BI to predict demand, understand their clients’ businesses, and better manage large inventories.
Price-related competition is not effective in the 3PL industry. The 3PLs that offer the lowest prices won’t attract the most clients. Instead, the 3PLs that implement the most data-driven practices will outshine the competitors.
Since BI tools provide warehousing experts with vital understandings of their day to day operations, cutting down costs without affecting the quality of services becomes a lot easier.
BI tools enable large-scale 3PLs to gain a complete outline of their global supply chains. Using this outline, 3PL managers can identify unnecessary expenses, potential opportunities and reduce overall business expenses.
Many top 3PL providers have cut down 30-40% of their operational costs by making data-driven decisions. The introduction of BI tools can only improve these data-driven decision-making processes. For instance, warehouse experts can optimize storage spaces by altering the way certain items are placed. Similarly, BI tools can help these 3PLs cut costs in the fields of –
Setting up transportation routes
Altering the design of warehouse spaces
Choose the cheapest carriers.
Assess the talent pool to select the best candidates
Beneficial for the Customers
Ultimately, the goal of all 3PL providers is to satisfy their clients and their clients’ customers. BI tools can help 3PLs improve customer relationships because –
They enable 3PL experts to share precise data with their clients.
BI tools recognize commercial patterns that can help clients improve their revenue margins.
These tools make sure that the 3PL company’s existing data analytics tools don’t have any ‘gaps’ in their assessments.
Once clients realize that their 3PL partners are doing everything they can to reduce business expenses, their loyalty to these logistics experts will improve. 3PLs can even use their BI tools to differentiate themselves from their competitors.