Big Data, Big Promises
Through years of technological innovation, companies have amassed vast volumes of information on their business activities – everything from structured data on production, marketing, sales, HR, finance, facilities and operations to transaction-level data on suppliers, customers and partners. But the convergence of major technology shifts like cloud computing, mobility, and social and business networks has sparked a new class of data – texts, tweets, blog posts, web-based videos, and other social postings.
And as I found in the course of conducting research for a report on big data , bringing all the data together for results is a both a science and an art. There is risk, but also opportunity. And as leading organizations demonstrate, if managed well, it promises profound advantage. Consider the following:
COSCO’s Logistics Networks
Firms often face tough trade-offs at the margin: safety for speed, speed for accuracy, accuracy for volume. Instead of trading off one highly sought outcome for another, new data helps firms get more of everything. They push the possibility frontiers out, optimize better, and get more value from the same or even a reduced input mix.
Take China’s Ocean Shipping Company (COSCO). The company faced a quandary. Its global distribution network was growing by acquisition. Managing for cost, COSCO had to reshape and resize networks and nodes to take best advantage of the new flows now possible.
But COSCO had more goals in mind from the acquisitions – from great customer service to reduced carbon footprint. Modeling with “real-time” data on thousands of flows, products, and customers, COSCO struck gold. It closed 60 of 100 distribution centers without, it reported, losing service quality. It also reduced logistics costs by 23%, and reduced carbon emission by 15% – or about 100,000 tons annually.
“We see the work we’ve done to optimize our supply chain as a ‘win-win’ proposition,” COSCO’s chief supply chain officer told reporters. “We are stronger competitively. And better able to meet our goal of corporate social responsibility as we grow.”
In my next post, I’ll look at another example of how big data is helping to keep the wheels rolling at Union Pacific.