Eric Johnson, Research Director and IT Editor of American Shipper, presented a comprehensive overview of the “Amazon Effect” in Jacksonville, Florida on October 11. He led members of the Roundtable of the Council of Supply Chain Management Professionals in a lively discussion of what Amazon’s plans mean to logistics providers.
Johnson discussed how Amazon is using data and analytics to gain competitive advantage at every point in the product chain: sourcing, manufacturing, shipping, marketing, retailing, and distribution.
What struck us most are the parallels between the impact Amazon’s big data analytics is having on the logistics industry and the nascent growth of people analytics.
Amazon is building automated distribution centers around the world and using anticipatory shipping to deliver products where and when customers in those locales will buy. The company then offers rapid delivery that few can match. It is only a matter of time before consumers and businesses come to view same day or next day delivery as routine. Companies that can’t meet that expectation will have a tough time competing.
Shippers and third party logistics (3PL) companies at the meeting saw this both as an opportunity and a threat. Amazon provides a platform and sales channel for thousands of sellers and competes with them at the same time (and on the same web page). In the same way, the company will provide opportunities for logistics companies as it vies with them for market share.
Beyond Predictive Analytics
The ability to keep delivery promises in fast-moving markets requires that businesses know where their products are in the distribution chain and anticipate where and when buyers will act. Yesterday’s inventory report will only create broken promises.
In today’s mobile workforce, having the right people in the right place doing what your company needs to get done is a complex task. It requires knowing the capability of every individual in your workforce, your contingent workforce, and your recruiting pipeline. You must find out who is likely to leave and what you can do about it. You need to know where the right talent is, what it will take for them to join and stay with your team, and how to prepare them for the future.
The analytics that drive the future are already moving beyond prediction to prescriptive analytics where machine learning and artificial intelligence develop the best allocation of resources. Amazon manages its delivery model with data, and the same applies to managing workforce requirements, talent availability, and development needs. Reactionary methods will leave companies at the bottom of the talent pool.
Competing in Analytics with Partnerships
As we have seen in the past few years, building a robust analytics ability requires developing the right team, allocating significant resources, and time. For the GE’s of the world, a major investment in internal analytics makes sense. For a niche B2B company, a partnership in the growing cadre of providers is a welcome resource.
In the world of analytics, we have a few established providers led by the venerable SPSS, SAS, and Tableau. A growing number of startups have entered the market as the supply of data scientists and analysts grows to fill the analytics vacuum.
Johnson sees startups as the best partnership opportunity for logistics companies just now getting into the fray, provided the new providers know the business. We recommend the same caution in human capital analytics. The most important factor in getting value out of big data is asking the right questions, and that requires in-depth knowledge at the intersection of people, work, and technology.
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