Predictive logistics – smart future for supply chain

They say that the best way to predict the future is to create it. Well, if speaking about such challenges as stock optimization, timely delivery, customer satisfaction, we do not always influence all circumstances that occur and that can change our bright future into a black nightmare.

The modern ecommerce market is more demanding than ever before, and that’s why using advanced technology to manage all processes is not just an add-on, but rather a must-have. Today we would like to talk about one of the hot trends in the industry: predictive logistics.

What predictive analytics has to do with logistics? What is predictive logistics?

In 2006 Clive Humby said that data is a new oil – meaning that the data itself is just a resource, but only when gathered, analyzed, and used properly it becomes something useful. Predictive analytics use the data to get smart insights from it, analyze trends, correlations, possible scenarios to propose the most probable ones. How can such a tool help 3PLs and other logistic businesses? Which challenges can be addressed with this technology? The spectrum is very wide and there are more and more new areas that can benefit from the digital predictions:

1. Consumer demand and stock levels. Especially seasonal ones – even if the company analyzes the data in a standard way, sometimes it is hard to plan stock levels properly. Demand for some products changes over time and depends on many factors. Some tools perform advanced analytics and are far more accurate with the planning, which brings cost savings in the necessary warehouse areas and money frozen in stocks.
   
   

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   (If you're curious about how Linker Cloud manages stock, be sure to read our Tech Overview series).

2. Shipping routes. Optimization for transport based only on routes calculations is sometimes not enough. When applying other factors like historical data on the traffic, weather conditions, vehicle specification can bring even better results.
   
   
3. Failures, damages, breakdowns. Another situation that can influence order fulfillment is a malfunction of machines or means of transportation. It may seem something unpredictable, but proper monitoring of their functioning, time of use, etc. can help manage the supply chain more accurately.
   
   
4. Environment protection issues. Predictive logistics can help be green, and it’s one of the top priorities for companies that want to build trust and reliability. Reduction of CO2 emissions and other issues related to compliance with environmental protection standards can be addressed with software systems.
   
   
5. Customer satisfaction. Finally: missing in previous points is risking in losing customer satisfaction, makes customer retention very difficult and spreads bad world about the organization. If everything goes as planned and you can properly react to appearing challenges, your customers are happy with the service you deliver to them.

Why should you consider investing in smart technologies to manage your logistics processes?

Investment in smart platforms, order fulfillment systems, new technology like advanced and predictive analytics is no longer an option, but rather a necessity to maintain competitiveness in such demanding areas as the ecommerce market. Well implemented tools, algorithms, solutions are directly reflected in cost savings and business indicators improvement.

Save time on operations and provide a better customer experience. Feeling overwhelmed, or in need of expert advice? We are here to help.

Psst: there's a time of year when predictions matter more than usual - that is, the High Season (Black Friday, Cyber Monday, and Christmas) - download our "How to prepare your e-commerce logistics for high season" ebook and make sure you're prepared for the tough logistical work ahead!