Fixing your

supply chain with

BIG DATA
Distilling millions of granules of information into operational
decisions will separate tomorrows winners and losers
By Alexander Klein

September 2017 | ISE Magazine 39

 W
Fixing your supply chain with big data
What is big data and why is it so important in
supply chain management today? How do we
get past the mere buzzword appeal in captur-
ing an audiences attention with trendy apho-
risms? The term big data is being applied to
situations where analysts, managers and con-
tinuous improvement teams need to weed through massive
amounts to support decision-making. But on the quality side
of the fence, it is important to make good quality data avail-
able to decision-makers in a format that is ready and available
for them to use. Wikipedia defines big data as a term for
data sets that are so large or complex that traditional data
processing application software is inadequate to deal with
them.
Both the quantity and quality aspects of big data are im-
portant, and real-world examples can show where it plays a
key role in the efficient management of typical supply chains.
With respect to quantity of data, our enterprises are now col-
lecting more data than ever before. Why? Because we can.
The evolution of data retrieval, storage and analysis allows
us to quickly but maybe not very efficiently collect any
amount of data with extraordinary amounts of granularity.
The trick is knowing where this data is and how to get at the
information when it is needed.
Data quality/quantity
The quality end of the spectrum offers a completely differ-
ent view. Trust and diligence must be placed both in the
originator of the data and the processing and storage of the
information. Even in this advanced age of data manipulation,
a lot of work must happen to ensure stable and accurate data.
Its not uncommon to experience situations where you need
to remove more than 70 percent of a massive data set due to
missing or corrupt data elements within the population.
Is that data really useable? In some situations, you might
have no other choice and will forge ahead with heavy dis-
claimers. In other cases, you would merely have to wait out
another cycle of activity using the data set analysis to direct
improvements in the collection, storage and manipulation
process.
As an example of the due diligence required to harness
big data into useful information, consider the example of a
large international active wear retailer interested in convert-
ing reams of columnar data into a comprehensive monthly
executive-level report. The raw data are provided by all of
its vendors and supply chain managers. The scope included
measuring the timeliness of the retailers merchandise from
the original purchase order to the store shelf.
It sounds simple enough, but consider that the project
might involve many factories with several ocean carriers
for millions of units shipping on thousands of containers
through multiple destination ports and distribution centers
40 ISE Magazine | www.iise.org/ISEmagazine
with many domestic carriers. Each one of those stakehold-
ers at each point in time must send information to a singular
system or data repository for analysts to capture the perfor-
mance. That repository is simultaneously capturing other
data elements for performance reporting of their distinct
components of the supply chain. Each one of those stake-
holders most assuredly has a different level of technological
ability when it comes to sharing information.
The result in some cases is the occurrence of bad or miss-
ing data that skews the results and leads to poor decision-
making. Aligning the stakeholders with the expectations of
the shipper and the capabilities of the data repository made
the management of this big data reliable, predictable and use-
able.
Technology
After addressing the quality and quantity aspect of big data as
it relates to the raw data, our next challenge is presenting this
information so it can help make quick decisions with high
levels of confidence.
Imagine having a years worth of Targets, Walmarts,
Costcos or any other big box retailers point of sale (POS)
data at the purchased item level and needing to make a fore-
casted buy decision or any other budgetary decision in a short
period of time. Imagine the millions of data records detailing
every aspect of every consumer purchase.
As recently as 10 years ago, even if that detail was avail-
able, statisticians would be called in to help define a reason-
able and meaningful sample to analyze, followed by analysts
using rulers and highlighters against greenbar paper. And in
the end, all that effort and personnel would only come up
with a guess. In the past, there was a higher probability that
the immediate future would closely represent the immediate
preceding months or years, so number crunchers could get
away with rolling averages of high-level data, and the deci-
sions made were typically close to meeting expectations or
at least backed into through creative data manipulation.
That doesnt cut it any more. Because data are available
and we are more comfortable with how to store and retrieve
those numbers and because consumerism is more fickle and
demanding than ever before, we want to use all of the data
we can get our hands on and be confident in its quality.
Enter the operations research field, which appears to be la-
ser-focused on querying and using data. Advanced tools and
knowledge of database management can harness the power
of analytics at the appropriate level. At the same time, enter
the newly marketed presentation methods like dashboarding
and live views of activities taking place in the supply chain,
and we find ourselves meeting the definition of big data head
on. Over the past several years, reporting capabilities in Excel
have developed almost to the point of a maximum threshold
that was screaming for more. Along came dashboard tools
like Xcelsius and Tableau that understood the shortcomings
of traditional workbook data reporting and offered not only
an alternate but an unbeatable capability. No more static re-
ports that would need to be generated daily, weekly, month-
ly, quarterly or annually instead, now we have live views
of the actual data in any format the user or decision-maker
wanted.
While available technology has brought the idea of a dash-
board to the forefront of corporate technology, the concept
has been around for a long time. Dashboards have been used
expertly by some of our example-setting corporate entities
in the guise of tools like the A3. Isnt an A3 report, a format
used heavily in the 1990s and 2000s, a kind of dashboard?
A3 reporting is a systematic approach to problem-solv-
ing developed by Toyota Motor Corp. Using a step-by-step
process, this system examines how a problem came to be,
identifies what its effects are and then proposes ways to ad-
dress the problem. Ideally, thats what we want a dashboard
to do, but its effectiveness is controlled by the ability to har-
ness big data. We need to take advantage of what we know
works and the tools and advances in technology that allow us
to get to this point of decision-making excellence.
The most common use of big data in third-party logistics
freight management is found in generating the data and re-
porting performance.
Typically, the two entities agree upon performance mea-
surements and levels at the outset of their relationship. You
could say that measurement and performance levels feed on
each other, and, as the old saying goes, you cannot fix what
you cannot measure. So the idea is to collect all of the data
regarding everything: every movement, every time stamp,
every dimension, every reason code, etc. The data needs to
be collected in a systemic and systematic way to permit easy
retrieval and manipulation. In short, a lot of thought needs to
go into the upfront work.
Once that is completed, then you turn your focus to how
you present the output. You need to understand how the cus-
tomer wants to view the data to make decisions or improve-
ments. Lessons learned from the old A3 format tell us to put
as much information as possible on one page. This permits
decision-makers to view trends that normally wouldnt be
seen and pick out how certain performance indicators cor-
relate to others.
More specifically, the decision-makers, supported by keen
data managers and capable vendors, are gaining access to
cycle time information, facility utilization, conveyance per-
formance and most every type of documentation efforts that
allow them to manage the bottom line. Any manager who
can do this expertly and consistently will lead the way.
Operationalize that data
As a comprehensive example of how to corral a big data ef-
fort, lets examine a customized program that stands in place
today only due to the commitment of resources and planning
efforts. The business needed to develop a key performance
indicators (KPIs) program and operationalize it for monthly
reporting and review. Bulk data are to be delivered to the
core team by the fifth working day of each month. The core
team would be held responsible for creating a consolidated
KPI presentation for monthly management meetings.
Data analysts worked with the shipper to orient themselves
with the specific processes in the supply chain, to define the
KPIs and to identify the data sources that contained the nec-
essary data elements that would be used to populate the KPIs.
Data analysts then turned to information systems and key
stakeholders to confirm that those data elements were avail-
able and could be extracted into a database management sys-
tem that could generate reports, either with the appropriate
programming or directly into specific reports.
Information systems determined that extracting data from
multiple operating systems, including enterprise resource
planning, warehouse management systems, land/logistics
transportation systems, etc., would not provide the most ef-
ficient means for a repetitive and replicable process that could
collect KPI information in the future. Instead, that depart-
ment recommended pulling as much data as possible from
the purchase order management system (more of a planning
system) and then filling in the gaps afterward from opera-
tions. This would require writing queries to pull data from
the various systems mentioned above and cross-referencing
using common key data elements that occurred in each of
the systems.
A test of the designed data extraction process was con-
ducted using a 90-day shipment cycle population. This de-
termined that in two of the inherent systems, all the data
could be retrieved automatically. In addition, data required
to complete the report that was not available in those systems
could be collected in an ad hoc manner and connected by
existing key fields data.
Next, a template for presenting the KPIs was created and
gaps between the connected data and the reporting data were
identified. The final step was creating a standard operating
procedure document to complete the report generation work
on an ongoing basis in as automated fashion as possible.
Here are some of the issues that the team encountered dur-
ing this initial process:
Freeform comment fields containing pertinent informa-
tion on container load planning decisions required exten-
sive data cleansing work. This information was critical in
reporting the cycle time performance.
Specific routings created double counting and missed
events based on how the shipments were entered into the
system manually and systemically.
September 2017 | ISE Magazine 41
Fixing your supply chain with big data

Dont go hungry
Big data analytics can be a useful tool in curbing food waste and meeting regulatory requirements, according
to Quantzig, a global analytics and advisory company.
The United Nations Food and Agriculture Organization recently reported that approximately one-third of
the food produced in the world gets lost or wasted, which affects not only world hunger but carbon emissions,
water and land use. And European countries Italy and France have passed laws that require supermarkets and
grocery stores to donate unsold food to food banks and charities.
But analyzing a businesss waste stream by combining what goes out (waste) and what comes in (supply
chain) can provide a clearer picture of sustainability and profitability. And big data can help manufacturers
use sales information, weather forecasts and seasonal trends to determine optimum inventory, predict
consumer demand and aggressively promote products that are close to their sell-by and expiration dates,
the company reported.

42 ISE Magazine | www.iise.org/ISEmagazine

 Some of the time stamps were available for certain rout-
ings, while others were not just by the nature of the
processes involved.
Several key time stamps were being overwritten by pur-
chase order changes, and the automated data extraction
was only picking up the latest change, losing sight of the
original data, which was critical to capturing true time
events.
Some data required manual collection. This created a
burden on resources and had the potential to make the
data collection process lack standardization from month
to month.

For the first five years, this effort was actively managed.
Then the process improvement team was able to transition
the process to a dashboard, which permitted a more auto-
mated data extraction and cleansing process and nearly on-
demand performance measurement availability, all based en-
tirely on the original process.

Reading the granules for better decisions

Consider the hundreds of thousands and perhaps even mil-
lions of lines of related data that are generated. Some of this
information is generated weekly, some monthly and some an-
nually. Being able to turn the most granular data into mean-
ingful and useful reports is powerful. Third-party logistics
providers and other enterprises must focus on supporting
their customers needs for big data analysis with dashboards
that feature any required or requested performance indicator,
landed cost calculations, scorecards, inventory management,
vendor performance, carbon dioxide emissions and even
peer analysis, to name a few measurable activities.
All this information exists, and we should understand how
to use it, making it invaluable not only to us in shaping our
future, but to shippers who can continue to focus on shaping
their own future with high-quality big data management.

Alexander Klein is the senior manager in the supply chain solutions

and engineering group of APL Logistics, a global provider of logistics
services. His efforts include working with sales and business develop-
ment to create supply chain solutions. He also works with the client
base, analyzing supply chain processes and making recommendations
for improvement. His bachelors degree in logistics, operations and
materials management is from George Washington University. His
MBA in general and strategic management is from Temple Univer-
sity. Klein was certified by the International Import-Export Institute
as an international trade logistics specialist in 2001. He previously
worked in warehousing and transportation management for a small
privately owned public warehousing company in New York and Chi-
cago as well as in corporate strategic management for Conrail, a U.S.
domestic freight railroad.

September 2017 | ISE Magazine 43

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