US Postal Service Sees Benefits of Big Data. Procurement Should Too
US Postal Service Sees Benefits of Big Data. Procurement Should Too
07-Jul-14 10:00
In case anyone had doubts, it’s now official that the “big data” revolution has gone mainstream: The US Postal Service is looking at big data and the analytical capabilities it promises to develop and implement its planned “Internet of Postal Things.” If the Postal Service, which probably collects more data than most other organizations of any kind in the world, thinks analytics can help improve performance, there’s no excuse for the rest of us to think otherwise.
And, in fact, most CPOs share the Postal Service’s enthusiasm. In a recent Procurement Leaders’ poll, 61% of procurement executives said that they would be investing in such technology during 2014. Twenty-two percent said they were considering doing so while just 17% said they had no plans to make such an investment. One must ask what that 17% are thinking.
Perhaps, they are skeptical that the ROI is valid. There is some debate about that. A recent article in CFO Magazine stated the obvious: The results obtained from analyzing big data depend on the results factored in or omitted. Or, as the saying goes, “garbage in, garbage out.”
But that’s more of an indictment of the users of big data than of big data itself.
Fortunately, the majority opinion is that big data is critical to effective decision making, for CPOs as well as their peers throughout the organization. A detailed explanation of the overall benefits can be found in a recent book promoted by the Harvard Business Review entitled “Why Big Data is Important to You and Your Organization,” by Thomas H. Davenport.
But, really, you don’t need a book to envision the benefits of the analytical possibilities of big data. Just as marketing can use data to predict technology shifts, emerging markets, and even pricing trends, and manufacturing can use data to eliminate process flaws, you can use it to better understand and even predict cost trends, rationalize the supply base, predict supplier financial problems before they happen, and minimize inventory without affecting the ability to deliver products. Many other possibilities will no doubt present themselves when you look at the data you’ve collected.
You might even be able to use big data on supplier markets to turn the tables on suppliers during negotiations. They often seem to know more about your company than you do. Big data can help you know more about them than perhaps they know about themselves.
There’s an interesting inscription on the front of the main Post Office in New York City. It says, “Neither snow nor rain nor heat nor gloom of night stays these couriers from the completion of their appointed rounds.” It’s a knock off of an ancient quote from Herodotus describing the courtier service of the Persian empire. It’s not actually the motto of the Postal Service–good thing, because many Americans will say it doesn’t apply–but it at least expresses a goal. For procurement, you could change it to “Neither inertia, nor lack of data, nor lack of analysis of data will stay CPOs from applying the science of statistics to develop strategy and improve performance.” Not very poetic, but a statement of commitment that all CPOs should make.
Paul Teague is US contributing editor for Procurement Leaders. He is the former editor-in-chief of Purchasing Magazine and has provided quality journalism to the US purchasing community for more than a decade.
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US Postal Service Sees Benefits of Big Data. Procurement Should Too
