Since the dawn of online shopping, there have been yearly articles in the national press telling tales of families failing to get their deliveries in time for the holidays. The public relations nightmare that can ensue for retailers and delivery services who have left a small child without their present can be devastating.
The UK’s second biggest parcel delivery service, Yodel, for example, raised the ire of shoppers across the country last year when it failed to deliver a number of orders from major retailers like Amazon and Tesco in time for the holidays. British consumers spent in excess of £2billion in just four days leading up to the festive period - up 50% on expected levels - and the delivery system was left unable to cope because of its lack of foresight and preparation.
Avoiding such a scenario again this year requires that business analytics be applied to the tremendous amount of data that retailers and delivery services produce every year, and especially every holiday period. This should constantly be in the minds of retailers throughout the year because of the sheer importance of the holiday period. John Lewis, for example, reportedly makes 80% of its money over the holidays.
A number of metrics need to be looked at to ascertain the likely demand for certain products, and most importantly, where this demand will occur, so goods can be brought to warehouses and depots in the correct areas. Not only will this help guarantee that products get to where they are supposed to be on time, it will also significantly cut down on the cost of getting it there. One of the largest costs currently encountered by haulage companies is fuel, and reducing the distance that needs to be covered by having goods at the right warehouse can save a vast sum, and help the environment.
It is also important to examine the data in relation to certain routes in order to establish how long deliveries will take. Data can pinpoint any circumstances that could arise which could potentially cause delays, such as where accidents are most likely to take place. Plans can then be put in place to mitigate against this, and help reduce delays in that area. It can also help establish other causes for delays, such as whether there are any significant losses from one particular distribution hub, and potentially ramp up security there, or find out if the systems are faulty.
Last holiday season, many delivery drivers complained that the harsh working conditions imposed upon them meant having to leave deliveries unsigned for. One Yodel driver even left a package under a car on the street. Keeping track of orders is, by its very nature, data-intensive, meaning big data’s contribution is potentially significant. It can greatly help in cutting down the thousands of hours lost simply trying to access, integrate and manage product databases that provide information on where products are in the field needing to be recalled or retrofitted.
According to ‘The Big Data Analytics in Supply Chain: Hype or Here to Stay? Accenture Global Operations Megatrends Study’, embedding big data analytics in operations leads to a 4.25x improvement in order-to-cycle delivery times, and a 2.6x improvement in supply chain efficiency of 10% or greater. Data can drive improvements through the supply chain to help ensure that families get their holiday orders. Retailers that fail to do so could find their goose is cooked.
To learn more about business analytics that can help you prepare for next holiday season a bit further in advance, check out the Business Analytics Innovation Summit, taking place in Las Vegas on January 28 & 29 2016. Use the code HOLIDAY400 for $400 off.