Business Intelligence for Competitive Advantage

Using BI tools to view dashboards and KPIs can save valuable time and will also take less time in decision making. It will also reduce the human intervention and dependency. As there is progress in the activity, it will be visible by click of a button.

 

What is BI?

•       Business intelligence (BI) refers to skills, knowledge, technologies, applications and practices used to help a business to acquire a better understanding of the market behavior and business context.

•       Business Intelligence includes both data access and reporting & analytics

•       The purpose of business intelligence is to support better business decision making as it not only does the statistical analysis but also does forecasting, predictive analysis and helps in optimization.

 

What are Analytics?

•       Analytics means extensive use of data, statistical and quantitative analysis, explanatory and predictive models and fact-based management to drive decisions and actions

•       Analytics are subset of Business Intelligence

 

What are the Benefits of BI?

•       It cuts through the clutter of multiple data reports and presents actionable information on one dashboard.

•       It helps to combine various sources of data into one single repository to offer ONE VERSION OF TRUTH

•       It improves productivity of analytics team by cutting down time to gather, clean and process data. With BI, the team can spend maximum time on analysis and arrive at better business decisions

•       BI helps to correlate various business dimensions as compared to linear single dimension MIS reports

•       Graphical and intuitive presentation of facts helps to focus minds on a problem rather than getting lost in mountains of boring numbers



 

Logistics Cost - Concern for Automobile Industry

 

Indian Automobile industry is rapidly growing and is expected to grow by 8% by 2020. There are various factors that affect the growth rate which should be controlled in order to accelerate it.

But in current situation, not only the rising fuel prices have made it difficult to control the logistic cost, but there are various other reasons which contribute to high expenditures on logistics.

One of the major hurdles in curbing this expense is India’s poor infrastructure, which is a known fact to all of us.

Every manufacturing industry faces a challenge in keeping prices low because of huge logistics cost, which is a prime parameter for distribution of their product.

 Below are some of the major challenges faced in logistics by automobile Industry: 

1.      Delay In Delivery- due to slow movement and stoppage at multiple checkpoints

2.      Tedious Documentation Process- due to different rules and permissions required in different states

3.      High Expenditure On Tyre Prices, Toll Taxes And Insurance Cost - due to high inflation rate

4.      Cost Of Security And Tracking Equipment - required for avoiding any damage & loss of high value Automobiles

5.      No Alternate Mode Of Transportation - inland waterways and railways,  lack of proper connectivity from plants to ports

6.      Long Idle Time Of Vehicle – due to the reason that vehicles are not allowed in city area during daytime

Despite of all the challenges faced and limitations encountered in Indian automobile industry, many steps are taken in favour of this industry.

With the introduction of GST, there is hope that most of the problems will addressed.

Completion of road projects like Delhi –Mumbai corridor may give some relief to logistics cost.
 In addition to this, completion of Rail projects like dedicated rail network and 6-corridors for high speed rail transit system is also expected to reduce the burden on roads. The new rail network would link industrial clusters with transportation hubs and logistics centres to reduce costs and ensure the hassle-free transportation of goods. 

With the implementation of above mentioned plans we can expect logistics cost to reduce considerably and accelerate the growth of automobile industry.

Reducing Empty Miles- best way to reduce Carbon Footprint

Here is a very interesting presentation by David Leifsson on how Coca Cola reduced carbon footprint in Iceland.

 

Who should pay for visibility in supply chain?

Everyone agrees that visibility in supply chain helps to reduce overall costs and make supply chains more reliable.

But who will foot the bill?

An auto manufacturer mandates that all vehicles should be fitted with GPS. But who will pay for installation and maintenance of the same? Typically a transport partner is expected to do the job.

But who benefits MOST from this visibility- Transporter, Supplier or Auto Manufacturer? the answer is fairly obvious-- Auto Manufacturer is the biggest beneficiary.

Thus, the principle should be that one who benefits most pays most. In fact, the HUB who attracts goods to itself or distributes from its locations has a much larger stake in visibility.

A dealer is interested in delivery of say 20 cars at a time- but Auto maker needs to track 1000s of cars for delivery. The benefits from knowledge of any delay or issues or actual delivery are much more to Auto Maker than anyone else.

 

Visibility in Supply Chain

In supply Chain “Visibility” means to have knowledge of where is your inventory or assets (Fleet) at any given time.

Providing end-end visibility or real time information to all the stakeholder is one of the most important metric or Key Performance Indicator (KPI) in defining the service level of a logistics provider.

But most of the logistics and SCM player concentrate on capitalizing more on their core competencies of managing end to end to supply chain activities and ignore information flow across the value chain.

The only way to drive better visibility is to invest in technology infrastructure. Logistics and SCM players thus, need to tie up with technology partners who can help them to store, manage, communicate and analyze necessary information.

These technology partners can thus provide 24/7/365 days real time information to all stake holders. Some of the best tools of managing information flow are as follows:

• Online portals to track consignments: This provides  partners to be aware about the status of their shipment and plan their further actions in a better way.
• Auto emails and SMS: Alerts are sent via emails and SMS to inform interested partners about various events .
• Two way SMS: User can send consignment note number and SMS comes with consignment status, it shows GPS location on Google Maps if the vehicle is GPS enabled.
• Send and receive PODs (Proof of Delivery): Sending and receiving PODs is just a matter of second and thus the entire billing process can be carried out in much lesser time as compared to physical transfer of POD.
• GPS Systems: GPS devices help to track current location of the consignment and also predicts its dynamic ETA (Expected Time of Arrival) which again helps stakeholders in better planning
• Android Devices: Android applications to track status of consignments and check location of vehicles on maps will now become the most used tool  to provide supply chain visibility as android devices have now become a part and parcel of almost every individuals life
• CRM Tool: To enhance customer relationship in the best possible way

It’s the era of real-time and accurate information that drives the logistics organizations and is thus a challenge for all stakeholders to exploit the benefit of the information provided by technology partners and augment their bottom lines. Technology partners like WebXpress will thus, make your journey easy.

Visibility in logistics will see more involvement of IT in coming years; no customer wants its consignment to be out of sight at any point of time.

E-POD can save transporter Rs. 1 crore every year !!

E-POD is Electronically Scanned copy of Proof of Delivery (POD). In India, POD is a physical paper where customer stamps his acknowledgement of receipts of goods. In case of any problem- same is mentioned on the paper as well.

Billing department of customer requires a copy or original of POD to be attached to each invoice. They use the same to audit the transaction and approve invoice.

Many transporter are trying to introduce a concept of e-POD where a scanned copy of POD is made available to a shipper online. This requires that POD can be scanned at delivery location. With advent of mobile devices, it is also now possible to take a photo of POD and send over network.

Many people see e-POD as a tool to help customers. But as we will see below- it has much more benefits to transporter than customers.

Here is how-

In absence of e-POD, a trucker is dependent on driver/ broker/ delivery branch to get the POD physical copy. What does he use POD for? He checks the details of delivery and ensures there are no adverse comments.

He then clears such a booking as CLEAN and bills the customer. But he can not bill customer every day so he waits till billing cycle arrives and then generates a bill.

Now the paper system has a problem that PODs do not arrive in time or get missed or need to be manually searched and checked and mapped to correct customer etc.

Once you have e-POD, it can be audited easily online without paper to arrive. Also, approved transactions can be parked separately awaiting billing. Problem transactions can be identified and interaction with delivery branch/ broker/ customer can start to get full facts.

This way, we are ready for billing much before bill cycle date. We then just press a button and bill is ready!! Chances of rejection go down as proper audit was done for all transactions.

This seemingly simple concept can cut down 15 to 30 days from working capital cycle.

For a company with 100 Cr turnover that is savings of almost 10 L per month or Rs. 1 cr a year on working capital interest cost alone !!

Good link to monitor Fuel Prices

Here is a good link to Monitor Fuel prices

http://www.mypetrolprice.com/diesel-price-chart.aspx

In Nominal terms- price of fuel has jumped almost 300%.
Of course, in real terms (that is adjusted for infaltion), the rise is much more modest

Fuel Price Rise is GOOD for Logistics Industry- Version 2

 

Consider this-

2008: Crude- USD 148, Diesel at Delhi- Rs. 35

2013: Crude- USD 99, Diesel at Delhi- Rs. 52

 

Imagine the reduced burden of subsidy on Indian Government. This also means that irrespective of how low the crude price goes- high Diesel prices are here to stay.

 

Back in 2008- I argued that this is in a way for good. This makes people think more about cost of logistics and thus helps to drive efficiency. In many ways this has happened- average size of truck capacity has gone up from standard 9 ton to 16 ton and we often see 40 ton plus vehicles.

 

This automatically means more consolidation of cargo is required to fill a truck.

 

Also, the paucity of long haul drivers will mean that it is better to pay him more, give him better comfort and thus make him driver longer. This will of course mean that he should drive larger vehicle- even a 50 tonner !!

 

These dynamics will play out over next 5 years and we will see a great impact on the way supply chains are organized.