Big data is not good information

Roger OakdenGlobal Logistics

Lots of data.

In keeping with the consumer space of social media and apps in the cloud, the IT industry is pushing the benefits of instant data (called big data) as one of the new ‘big things’ for industry (the other appears to be cloud computing).

To emphasise the point, a coffee shop chain in the UK has stated that its management at head office will receive updates of sales by each outlet every four minutes! How they intend to respond to this amount of data was not explained.

An article concerning another retail situation stated  “…in a business that thrives on daily sales feedback, there are also long term trends- negative trends are not always immediately apparent.” An example of lots of data but minimal information.

Recently there were media reports of a retail chain in Australia that diversified into the hardware sector. The new division built retail outlets and implemented the latest in computing systems. However, they struggled with operational issues, such as not knowing the range of products and quantities to order for the pre-Christmas sales season. Lots of data but no information.

A better approach

While IT is an integral part of a business, how pervasive should it be – do you really need inputs every four minutes? Instead, ask what operational and strategic decisions are required and how often? There is a balance between volume of data and decisions. It depends on how quickly your business can respond to events; an integrates steel mill has a very different response time to a retail outlet.

Effectively using data to generate information for decisions is core as you work towards a more unified business. Being effective relies on three ‘Cs’ that are underpinned by technology:

  1. Co-operation between people inside the business, such as achieving the sales & operations planning (S&OP) objectives
  2. Co-ordination between parties to the business, such as implementing data and messaging standards to assist with sharing data. Contact GS1 in your country about global data and messaging standards
  3. Collaboration through sharing of information between parties to your enterprise, based on common data and the few performance indicators that really are ‘key’ to the ongoing survival of your business

Technology developments are always exciting; the difficult bit is deciding how and when to use the new products and not be swayed by all the breathless brochures and articles extolling their benefits but few of the challenges.

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About the Author

Roger Oakden

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With my background as a practitioner, consultant and educator, I am uniquely qualified to provide practical learning in supply chains and logistics. I have co-authored a book on these subjects, published by McGraw-Hill. As the program Manager at RMIT University in Melbourne, Australia, I developed and presented the largest supply chain post-graduate program in the Asia Pacific region, with centres in Melbourne, Singapore and Hong Kong. Read More...