Business Intelligence in the logistics industry
Business Intelligence in the logistics industry should be a priority in every company in the field.
Day by day logistics companies collect a wealth of valuable information to their database which can be used to improve their business. However, many of them don’t know how to use data in their favor and end up not using them at all.
That is one of the biggest mistakes a logistics and freight forwarding company can make.?
Companies in the logistics and freight industry need to invest in automation and digitization, which comes from Business Intelligence usage.?
Business Intelligence: is the collection of databases that drives a company to make tactical business decisions. BI tools access and analyze data sets and present analytical findings in reports.
Why is Business Intelligence so important in logistics?
Like any other business, developing a good relationship with your customers and partners is extremely important.
That’s because the happier your clients and partners are the more they will come back to make more business with you.
There are many ways to establish a good partnership with your forwarder partners, unfortunately, there are also many ways to lose a forwarder partner.?
But what if you knew what you could do to increase your client’s and partner’s retention??
I believe you would say you would do it, am I right? Investing in a BI for freight forwarders will help you with that.
Knowing the volume of cargo you are exchanging with your partners and knowing the amount of profit you are generating is a great way to start improving your partnerships.?
Business Intelligence will help you make the right decisions and understand where you should take risks and where you shouldn’t.
Another important touchpoint a Business Intelligence tool can help you figure out is if you are leading a commodity in a specific country, or city.?
If you understand that you are, you can start taking even more customers on that field, and to do so you can show them the great work you’ve been doing so far.?
So, the big importance of Business Intelligence in logistics is to know the best ways to improve your business – through incontestable data – how to do it, when to do it, and with what partner.
How can Business Intelligence help logistics companies?
Using Business Intelligence in logistics helps in getting insights into issues or new opportunities you might have and the ways to improve them.
For example, you might find out that one of your customers is giving you much more cargo than you are giving him, or the other way around.?
Along with transport routes, documentation problems, on-time deliveries, etc.
The other way around, you can find out that you are missing a big business opportunity with some of your forwarder partners, or a potential new commodities field.?
To sum up, Business Intelligence can help forwarder companies make better decisions by presenting both current and historical data in their business context
Here are some ways that Business Intelligence can help forwarder companies make smarter, data-driven decisions:
How to make data-informed decisions in your forwarder
Now that you know what Business Intelligence is and how it can help your business make data-informed decisions, it’s time to move on to the next step…
What exactly data-informed decisions are and how can you make data-informed decisions in your forwarder?
So, let’s dive in:
Being data-informed means that you are going to use data in your forwarder to help you understand the performance of your partnerships and inform new possibilities of tactical strategy to improve them.
It means you should use data to improve your forwarder business and your other expertise and experience.?
With a data-informed strategy, data is just one part of your decision-making process.?
When you are data-informed you can contextualize strategies to understand the success or failure of your forwarder partnerships.?
Once you are data-informed you can test the quality of your partnerships and understand every single component that makes a forwarder partnership successful or not individually, and their evolution.
To start making data-informed decisions in your forwarder you must begin by:
Once you start implementing these 6 steps in your forwarding business you will be able to visualize the results of your team’s effort and understand what works and what doesn’t.?
And that will give you the power to improve your business operations and be more successful.
Your KPIs must be based on the SMART strategy, and that means:
Ok, but how can your freight forwarder, measure and analyze all the data your forwarder company provides to you?
Steps to Analyze Your Forwarder Partnerships
Learning how to analyze freight forwarder partnerships and make data-informed decisions is not an easy task.
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However, here are a few things that might help you:
Gather information about each of your forwarder partners
To start you must collect as much information as possible about each forwarder partner you do business with individually, for example:?
Analyze your forwarder partnerships
After mapping your forwarder partnership’s data it’s time to start your freight forwarder analysis
You can start by comparing the partners that offer you the same services in the same country or city.?
This is how you will know if you are indeed making win-win partnerships.?
For example, let’s say that you have two freight forwarder partners in Mexico, from forwarder A you are receiving no business, but you are giving them around 18 cargos per month.?
From forwarder B you are receiving around 16 cargos a month, but you are not giving them anything.?
So the smarter improvement would be to give forwarder B the business you usually give to forwarder A.
This way you would be making a win-win partnership with the forwarder B, which leads to more business generation.
This is not an easy analysis to make, especially when you don’t have your data gathered visually.?
That is when an analysis tool for freight forwarders helps to escalate your business.
Once you have better visibility of your partnership’s data you can make faster improvements.
Improve your forwarder business through partnerships
It’s time to make decisions to improve your freight forwarding company, after you have analyzed your current partnerships it’s time to get down to business.?
Get in touch with your current forwarder partners and propose the improvements.
If it’s the case for you to give your partner more business ask him if that is ok, or if it’s the other way around, show him how much you are sending to his forwarder, and how poor you receive from his company.
Besides that, you can always look for new opportunities in a new city or country.?
For example, if you understand that you are sending many ceramic commodities to Iran you can get in touch with freight forwarders in Iran and show them how great you are at dealing with this kind of commodity.
How Business Intelligence can benefit logistics and freight forwarding companies?
As mentioned before, the biggest advantage of using Business Intelligence inside your forwarding company is the ability to improve your freight business through data.
However, there are more benefits to its use, check it out:
Automated reports lead to faster decision-making
Implementing Business Intelligence tools to your logistics and freight forwarding company helps reduce employee effort and time spent on multiple reports generation, along with the errors that can be made when managing spreadsheets.?
More accurate information
Usually, logistics and forwarder companies have a person to take care of generating reports, and sometimes it can lead to mistakes and delays.?
With a Business Intelligence tool, you can avoid potential errors due to misleading calculations, and information.?
Using a BI tool you can define Key Performance Indicators (KPI) and provide related information to get the results.?
Therefore, Business Intelligence solutions improve efficiency by reducing information blockages.?
Along with that, it allows you to make faster decisions to improve your freight business.?
Effective decision making
Business Intelligence tools provide insightful databases through a data model, thus avoiding conflicts and unmatched reporting data.?
BI solutions have a big influence in leading your forwarding company into making data-informed decisions in real-time, due to its centralized information.?
In addition, it offers a detailed investigation of the available information.
To sum up
Learning how to analyze freight forwarder partnerships is the main way to start improving your forwarder business.?
Many forwarders think that to increase their business they need new forwarder partners and that is not true at all.
Remember that, choosing the right fit Business Intelligence tool for your logistics and freight forwarder company will allow you to make data-driven decisions in real-time.
Which leads to optimization of various processes inside your organization, and the improvement of your partnerships.
To start increasing your forwarder business generation start with your current partners, analyze them, and then start the improvements.?
After you cover the partner’s ground you can start looking for new partners.