Using Data and Predictive Analytics to Drive Labor Management Solutions in the Warehouse

Data intelligence and predictive analytics are key terms in supply chain management today, but how do you harness these new technologies to deliver business value, especially in labor management? This is the important topic I discussed with Jason Judd, Group Director of Analytics at Ryder System, during an episode of Talking Logistics.

The role of analytics

I had read a quote by Jason that “reporting is the death of analytics,” so I began our discussion by asking Jason what he meant by that and what the role of analytics is in supply chain.

Jason says, “Reporting is often the starting point of analytics. There is a huge need for information in the supply chain, which is always changing, like the ‘flavor of the week.’ Sophisticated transportation management systems, for example, have a lot of data, but it’s usually not accessible in a user-friendly way. We create a clean, curated data model that is usable by the business. Rather than provide reports, we give users easy-to-use tools and technologies they can use to create their own versions of reports as their needs change. The business loves the self-serve approach and it frees the analytics team for deeper dives on predictive analytics.”

Data maturity

Most companies today are drowning in data, but complain that they don’t have enough good information. I asked Jason how companies can better leverage the data they have. He says it all starts with automation. “You have to build a data model you can trust and rely on, and automate the feeds into it,” explains Jason. “Then you give users the tools and technologies to easily pull and leverage the data to do their own analysis.

Understanding the operational metrics you’re trying to improve is also important. “The reality is that even though these tools make it look easy, it takes a lot of work behind the scenes to decide which KPIs are important and which data and systems are needed to create them,” continues Jason.

Prescriptive analytics

Going beyond basic reporting and analysis, the use of predictive analytics is showing a lot of potential. Jason says this is a journey as the field matures. “Where you used to have a single data analyst, now you have data engineers, data scientists, data architects and data analytics experts all putting the solution together. But we’re only halfway through on this journey. In the near future you’ll see people who are data-savvy today become predictive-savvy, and they will become advisors to the business users so they can run predictive algorithms from a drop-down menu.”

Using analytics in labor management

I asked how they apply all of the analytics we just discussed to labor management in the warehouse. He notes that when most people think of Ryder, they think of trucks. But Ryder operates 143 warehouses around the United States and they have gotten sophisticated in how they use data to drive labor efficiencies.

“We have automated the data feeds from RFID tags, conveyors and other automation in the warehouse to provide a ‘wrapper’ around the data that the business can use for analysis,” says Jason. “Pickers can see how they’re doing against goals; we have leaderboards throughout the building so people can compare their results; and we use the data during meetings for performance leaders to explain what they are doing to get high productivity. As a result, when we come into a site that isn’t yet using this labor management system, we can confidently predict that we can reduce their costs by 3%-5%, and sometimes as much as 10%-11%. Thus, the ROI is fairly high.

“And because we have this data transparency, we can offer workers incentives to improve productivity. Management can also use the data to compare site efficiency so the whole organization can learn from top performers and become more productive.”

Getting started and next steps

With the obvious benefits that analytics can provide a business, the question for many is how to get started down this path and what the next steps are to profit from this journey. Jason shared some great insights and advice on these topics, so I encourage you to watch the full episode for all the details. Then post a comment and share your thoughts and experiences on this topic.