Actionable Data in the Fuel Supply Chain
This article is the next of a series on how the final mile of the energy supply chain is changing. In the State of the Fuel Supply Chain infographic below you will note several rising business costs that are leading to the margin squeeze in the supply chain, including little actionable data.
In the previous blog post, The Revolution of Customer Experience (https://fuelnownetwork.com/2020/04/27/the-revolution-in-customer-experience/) the notion that being able to meet customer’s increasing expectations will be a key battle for surviving in this market. Consolidation will happen in the supply chain around who is best at using data to understand more about improving business and understanding what customers want.
Increasing Technological Capabilities
There are many opportunities for fuel wholesalers to modernize their supply chains through digital transformation. Even before the current pandemic, technological capabilities were and are continuing to increase at an exponential pace. These changes are pushing wholesalers, carriers, and those who offer logistics software solutions towards improvements that boost productivity, reduce costs, and increase customer satisfaction. Research from McKinsey indicates that companies that aggressively digitize supply chains can expect to boost annual revenue growth by 2.3% (https://www.mckinsey.com/business-functions/operations/our-insights/digital-transformation-raising-supply-chain-performance-to-new-levels). In our industry with extremely thin margins, 2.3% is significant.
Unfortunately, many companies in this industry are still using paper or if they are more ‘advanced’ have some software systems (often disconnected), a few have started connecting systems, and even fewer are doing anything with the data being captured. But, those few have realized something critical – all this increase in technology is creating an immense amount of data and whoever harnesses the data and insights has a sizeable competitive advantage.
What is (and is not) Actionable Data?
There are several technology vendors in the fuel supply chain industry. Most are fairly outdated with their technology, but several are starting to provide powerful and user-friendly analytical tools to make it possible to compile and analyze all this data. Alternatively, if you use systems that have open API’s or other mechanisms to pull out data, you can use an off the shelf Business Intelligence tool to combine your data for analysis. Whichever way you go it allows you to create insights to put major actions into decisions more quickly. It allows companies to transform the way their business operates. But, how do you know what data is actionable and what is just noise?
Unfortunately, that is not an easy answer. It depends on many, many factors. But here are some questions to ask in order to figure out what data is useful:
- What decisions do I make regularly? What data gives me the information to make that decision?
- What data do I wish I had? How would it help me if I did have it?
- Is data locked in organizational silos? What data from one system I have would provide insight for another system or department? For example, combining inventory, logistics, and accounting data to find system trends.
- What are my customer expectations from me? What are the expectations from their customers? Can I capture those expectations in electronic form? Can I measure if I’m meeting those expectations?
Once you have figured out the data you have and the data you need, you need to integrate it into once place so that you can take that critical next step – generating insights. The insights may not come immediately, likely you will need some trial and error until you see the data that actually measures what it needs to so that you can use it to forecast or see key trends. Keep in mind that generating reports is not the same as generating insights.
The future of this industry supply chain will be dominated by those who are best at using data to understand more about improving business and understanding what customers want. NOW is the time to improve your maturity in this area and overtake your competition.