International Journal of Pure and Applied Mathematics

Volume 117 No. 20 2017, 911-916

ISSN: 1311-8080 (printed version); ISSN: 1314-3395 (on-line version)
url: http://www.ijpam.eu
Special Issue
ijpam.eu

Big Data: Transforming Logistics and Supply Chain

Smriti Mohan
Dept. of Management, Kochi, Amrita Viswa Vidyapeetham, India.
[email protected]
.

Abstract— this paper aims to explore the applications of Big Logistics refers to the management of flow of things between
Data in Logistics and Supply Chain Management by a point of origin and a final point of consumption. Logistics
pinpointing various challenges that may have to be faced by of physical items includes the following:
logistics companies employing Big Data. This paper reviews the  Material handling
importance of Big Data in Logistics based on scholarly articles.
The paper also highlights different challenges faced by logistics  Production
operation by employing Big Data and how Logistics Cost  Packaging
Optimization is achieved using Big Data. Moreover, Big Data in  Inventory
Logistics is an emerging aspect which has both pros and cons.  Transportation
But the future growth of Big Data in Logistics cannot be
predicted. Applying Big Data in logistics can have positive
 Warehousing
impacts on cost and inventory management, customer  Security
satisfaction, route optimization etc. thus increasing the overall The business efficiency and performance of logistic
efficiency in performance of logistics operations. management lies in the ability to manage; access and analyze
. vast volumes of data. Optimizing the routing of goods and
services can have a high influence on the profitability of any
1. INTRODUCTION firm [1]. More complex data is to be managed as logistics

B ig data refers to capturing and storing of a large volume

of data that can be used for analysis. A very large
amount of data is being generated globally on an everyday
management and transportation becomes more data driven.
Today’s data sources include sensors, operational systems,
social media, websites, forecast systems etc. [2]. With ‘big
basis and traditional data application software is inadequate data’ solutions, data can be ingested at higher rates, stored
to deal with such complex data [1]. Big data is characterized longer and can be analyzed faster and it will enable logistics
by 5 dimensions described below: companies to meet all these requirements [3].

 Volume- There is no sampling done in big data it just 2. APPLICATIONS

captures and tracks every data. Therefore the volume of data  Last mile of shipping can be quickened
collected is huge. Most of the present enterprises have The last mile of shipping accounts for almost 28% of total
storage systems to store terabytes and petabytes of data. The cost of delivery [8]. It is highly inefficient and may have
challenge lies in efficiently managing this large volume of many obstacles like increased time of delivery, difficulty in
data. parking vehicles in urban areas, ability to efficiently handle
 Velocity- The data movement in today’s world is real time the package by professionals without damage etc. However,
and is on a fast pace. The data keeps getting updated within track of the packages can be kept up to this point [2]. The
fraction of seconds. Big data is represented by this high spread of Internet of things and usage of Big Data enables
velocity of data. the shippers to view the delivery process from start to finish.
 Variety- Data can be in multiple forms. It is necessary to Big Data can be used to optimize delivery strategies thus
arrange these data into a single format in order to make it improving performance.
applicable. Therefore this variety of data also represents Big
Data.  Transparency in reliability
 Veracity- Veracity refers to the orderliness, messiness or Transparency is an important characteristic that is always
trustworthiness of available data. considered by shippers, carriers and customers. To achieve
 Value- The value aspect in Big Data refers to the non- transparency in the whole process, sensors are provided in
exploitation of datasets and it is a more subjective aspect. vehicles. Data obtained from these sensors can be used to
estimate time of delivery thus avoiding bottlenecks down the
supply chain process [1]. Further, logistics companies can
use this data when bidding for new contracts.

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and services in Supply Chain thus avoiding recalls.

 Route Optimization  Supply Chain and inventory risks are minimized using Big
The best use of Big Data in logistics is logistics optimization Data.
[7]. Optimization of routes helps in reducing cost and  Improves decision-making process in Logistics thus
avoiding late shipments [2]. For instance, if too many vehicle making the decisions precise.
are put on one delivery route, it may lead to usage of assets  Exact time of delivery can be determined by leveraging
unnecessarily that may have been better utilized elsewhere. Big Data to track delivery routes and to provide information
On the other hand, if enough number of vehicles are not regarding weather conditions and traffic conditions along the
allocated in one delivery route, it may lead to late shipments delivery routes.
which can negatively affect the brand image and client  Detail analysis of vendor performance can be performed
relationship. Other challenges in optimization of routes like aspects including vendor profitability, customer
include change in fuel costs, highway repair works, weather complaints and feedbacks and on-time service.
conditions and other environmental factors. Big Data helps  Improves service quality and enables personalized service.
to overcome these challenges by integrating data obtained  Helps to establish customer purchase behavior by
from sensors in vehicles, road maintenance data, weather analyzing data from all channels including social media
forecast etc. into a system so that decisions can be taken websites and mobile websites.
accordingly.  Development of data-driven new business models can be
done employing Big Data.
 Shipment of sensitive goods  Next generation products and services can be improved.
Maintenance of perishable goods is a key challenge for  Generate more profitability by predicting future outcomes
logistics companies in the case of food manufacturing having greater confidence level.
industries. Big Data and internet of things helps in retaining
the freshness of such goods by different techniques. For 4. BIG DATA FOR CUSTOMER SATISFACTION
example, a truck carrying dairy products can have Big data has proven to have significant impact on customer
temperature sensors installed within the storage space so that satisfaction. Companies use data generated from social
a record of temperature can be kept. Traffic condition media like Facebook, Instagram etc. to gain understanding
forecast is also another technique and it ensures that a higher on consumer preferences [9]. In this way, demand and sales
quality of sensitive goods are shipped and delivered. can be anticipated and supply chain can be coordinated
accordingly so that wastage of money in shipping
 Automation of Warehouses and the Supply Chain superfluous units can be avoided. There are other techniques
Integration of Big Data with technology has a very high that logistics companies adopt in order make customers
potential to enhance logistics performance. It leads to the happy. Delivery of tangible goods requires a face-to-face
automation of Supply Chain system as a whole. Many contact with the customers [1]. Big Data helps in ensuring
business organizations are adopting automation technologies that this criterion is achieved in the most efficient manner
for example Amazon has robots to grab items from shelves and makes the whole process user friendly. Amazon has
and automated drones for delivering goods. Self-driving adopted the method of ‘anticipatory shipping’ to improve
vehicles are another example. customer satisfaction in which the demand is anticipated
considering purchase patterns of customers, time spent in
3. BENEFITS OF BIG DATA IN SUPPLY CHAIN viewing a product and search patterns [9]. Some companies
MANAGEMENT like DHL provides options like ‘My Choice’ to the
Big data has high potential for improving efficiency and customers that enable customers to manage delivery points
effectiveness thus producing higher quality outputs [1]. The via mobile devices and can avoid the inconvenience of
concept of intelligent supply chain has arisen from Big Data staying home for receiving a package. Big Data is being used
Analytics [10]. The following are the benefits offered by Big for precise customer targeting and differentiation to optimize
data: interaction with the customers. Big Data, in general, helps
 More accurate operational information is provided. logistics industries in decision-making which is data-driven,
 Supplier change and timely corrections are enabled. formulate strategies and implement innovations.
 Transparency of information is allowed.
 Gives greater visibility throughout the Supply Chain. 5. INTEGRATION OF 5V’s OF BIG DATA WITH
 Traceability of products and services is improved which is SUPPLY CHAIN MANAGEMENT
an important aspect of Logistics. Big data is a trending concept in today’s world. Estimates
 Helps in identifying supplier problems. show that almost 90% of the data present today was created
 Early warnings are provided regarding defects in goods in the last two years. Thus to describe this overwhelming

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amount of data it is divided into five dimensions as described reducing cost of transportation.
earlier in this paper [1]. GPS data is used to analyze vehicle speeds and to determine
The integration of 5V’s of Big Data with Supply Chain bottleneck ratios. This enables smart city to track
management is described in brief: problematic routes and locations to minimize bottlenecks in
traffic conditions [2]. Another method used is passenger tap-
 Volume in data. Passenger transactions are determined using these
A very huge amount of data is generated every second. This data to establish passenger behavior patterns throughout
data can be easily managed and controlled using devices like origin destination and waiting times [4]. Even though GPS
sensors, bar codes and other means like ERP (Enterprise enables to determine bottlenecks, cause of bottlenecks
Resource Planning) and database technologies. cannot be determined using the same which is one of the
major drawbacks [13]. However, useful models related to
 Velocity origin-destination can be developed using the data extracted.
In Supply Chain management, the velocity of data relies on
the speed with which data is collected, how efficiently the 7. METHODS AND TECHNOLOGIES IN BIG DATA
data is stored, how useful data is excavated from existing Big Data is the backbone of Intelligent Supply Chain
available data, algorithms and decision-making models. management system. Data quality and data processing
capability is improved using Big Data. Predictions for future
 Variety are
made using Big data by deploying various predictive
The data generated from Supply Chain is highly variable in analytical methods like statistics, data mining and modeling
nature as they are generated from diverse sources in by analyzing past and existing data [8]. Correlation analysis
heterogeneous formats using various sensors used in can be done using Big Data to establish the type of
highways, manufacturing plants, retail shops etc. relationship between different variables. Data quality is an
important aspect for analysis as far as Big data is concerned.
 Veracity Five technologies make Supply Chain management more
The verification of quality and reliability of data is effective and they are: Internet of Things (IoT), Mobility,
performed under different circumstances and it is highly cloud computing, Big Data and predictive analysis. The
complex in nature. above mentioned technologies are highly inter-linked [6].
Sensors are provided by Internet of Things and Mobility
 Value which enables real time data acquisition even while moving.
The examination of the impact on data insights and business Thus Big data is produced by these sensors in one form. The
processes within the Supply Chain is highly challengeable. analysis of the collected data is done using predictive
This should go hand in hand with the value of reports, analytical techniques [8]. Cloud computing refers to the
statistics and interpretations. process of performing these analysis [12]. In this way cloud
computing and Internet of Things are inter-connected. All
6. BIG DATA FOR SMART CITY TRANSPORT these technologies perform in integration to make data
The concept of smart city integrates two main aspects storage and retrieval cheaper in Big Data analysis [8].
namely the logistics (transportation) aspects and emerging The major tools used in Big data analysis are:
technologies which is made use of to implement all the  Query and reporting
activities of smart city [2]. Logistics in smart city focuses on  Data Mining
disaster and emergency management. All the activities are  Data Visualization
considered from a sustainability point of view. This includes  Predictive Modeling
capturing and analysis of data. Big Data helps in extracting  Optimization
data either from sensors or households, having all the five  Simulation
characteristics. Integration of city systems is an important  Natural language text
aspect for smart city development. Big data enables to  Geo-spatial analytics
manage the large quantity of unstructured data collected by  Streaming analytics
interlinking it [13].  Video analytics
Dealing with CO2 footprint is an important aspect from  Voice analytics
logistics point of view [2]. Every individual firms focus on An estimated data shows that about 91% of companies use
transportation optimization, reproducing landscapes, local Query and reporting, 77% of companies use Data Mining,
productions control thus leading to a distributed logistics 71% of companies use Data Visualization, 67% of
system rather than centralized logistics system [5]. This has companies use Predictive Modeling, 65% of companies use
the potential to increase the profitability of the firms by optimization, 56% of companies use simulation, 52% of

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companies use Natural language text, 43% of companies use goods flow in terms of cash [7]. For instance, shipping small
Geo-spatial analytics, 35% of companies use Streaming quantity of goods may be optimally inefficient but it can
analytics, 26% of companies use Video analytics and 25% reduce delivery time, decrease in-transit inventory and make
of companies use Voice analytics [8]. the most out of working capital.
Cloud services play a vital role in Big data analytics. Core
architectural principles of Cloud service in Big data are  Warehouse and Distribution center networks
described below [8]: Identification of number and location of warehouses and
distribution centers can be done using Big Data. Decisions
 Broad network access on whether to serve different customers from a particular
Enables Big Data cloud to be made accessible and available warehouse or to have distribution centers for hosting
over a wide reach of network by diverse client platforms multiple products can be made and this will optimize asset
through standard mechanisms. utilization and enables negotiations for lower shipping rates
[7].

 Multi- tenancy  Shipping Rates

Enables allocation of Big data cloud resources so that Big Data can be used to establish transparency in pricing and
multiple tenancy can be achieved and data isolation can be cost structures across routes and modes. Overpaying routes
guaranteed. can be effectively avoided thus optimizing cost employing
Big Data.
 Resource pooling
Allows allocation of Big data cloud resources in a location- 9. CHALLENGES
independent fashion so that it is accessible by multiple The major Challenge in employing Big Data is that it is often
tenants for simultaneous allocation and re-allocation of wrong, outdated or incomplete. On an average almost half of
resources through simple abstraction. the working time is spent in handling and maintaining huge
volume of data that is available in the form of Big Data. This
 Rapid scalability and elasticity can adversely affect the time that can be utilized for
Enables Big data resources to be automatically and rapidly innovation [10]. Poor data quality can lead to higher cost of
scaled up and down on demand. functioning of Supply chain leading to a steep increase in the
wastage of resources and money[14]. Low proficiency in
 Measured service technology by professionals will end up in manual data entry
Enables transparency in monitoring, controlling, billing and and handling, ultimately leading to less accuracy in data.
reporting of Big data cloud resources. Critical points in supply chain are often disrupted by manual
and faulty data entries [1].
Other than cloud infrastructure services, the following are The visibility of Big Data in supply chain is often low as
required to support Big data in general: logistics experts may have large volume of data in hand but
 Hadoop related services and tools they may lack expertise to analyze it due to the absence of a
 Cluster services user-friendly graphical interface [15]. Another major
 Special data analytics tools like events, logs, data mining challenge includes the volume of data available.
etc. Volume of available data may differ based on regions, for
 Databases with good data quality instance, in small economies and rural areas, only a small
 Servers volume of data may be available unlike metropolitan cities
 Massively Parallel Processing (MPP) databases and urban areas [10]. This can have an impact on logistics
and supply chain activities in these regions. To overcome the
 Security infrastructure
above mentioned challenges, Big Data analytics should be
carefully embedded with supply chain operations [11].
8. LOGISTICS COST OPTIMIZATION USING BIG
People with adequate knowledge in Big Data analytics
DATA
Employing Big Data in logistics is one of the most effective should be employed to work in pace with logistics so as to
ways for cost optimization [4]. The three levers for obtain actionable insights [14].
optimizing cost are described below:
10. CONCLUSION
This paper presents an overview of applications of Big Data
 Mode and route Mix
in logistics and Supply Chain management including a brief
Big Data enables the determination of the most suitable
description of how Big Data impacts customer satisfaction
mode of transportation and junction points that will optimize

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and cost optimization in logistics. It also discusses various [14] Branka Mikavica,” Big Data: Challenges and Opportunities in
Logistics Systems”, in 2nd Logistics International Conference, Serbia,
challenges in the domain. Big Data analytics is in the initial 2015.
phase of development and the tools, techniques and [15] Eiichi Taniguchia,” New opportunities and challenges for city
knowledge to handle these tools is a major challenge and logistics”, in 9th International Conference on City Logistics, Canary
therefore is not able to entirely meet all the requirements. Islands, 2015.

However, efforts are being made from different fields by

experts to explore all the hidden values in this domain. Data
quality, technical feasibility, privacy etc. are some of the
challenges to be dealt with. If these challenges are correctly
addressed, Big Data can create a revolution in Logistics
sector [5]. The future growth of Big Data analytics is
however unpredictable. Big Data in logistics has a great
potential for increasing competitive advantages of firms.

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