Data Science for Good: Beyond Profits, Towards a Better World
Data Science can support business transformations that go far beyond financial gains.
It can improve working conditions, reduce inequalities and promote an inclusive working environment.
As a senior supply chain engineer, I've mainly used analytics to improve operational performance and cut costs.
However, an engineer's duty is not just about maximizing profit; she can also help make the world a better place.
As a Data Scientist, how can you improve working conditions of logistic operators?
In this article, I will share examples using data science to improve logistic operators' working conditions (and bonuses).
Productivity & Profitability
Profitability of Logistics Companies
As a former supply chain solution designer, I spent the early years of my career helping logistic companies optimize productivity to boost profit.
I've witnessed the immense pressure our customers (Retail, Fashion, Luxury, Cosmetics) face to deliver goods on time while minimizing costs.
As third-party logistic providers, this pressure was directed to us with a constant fear of having our contracts not renewed.
In this stressful environment, the lure of cutting corners and adopting aggressive management tactics to reduce workforce costs is ever-present.
Let's find a smarter way to work!
By embracing the power of data science to improve processes, we can avoid transferring this pressure on operators and drive positive change.
Definition of Process Productivity
Let's take a hypothetical scenario of a major international fashion retailer building its distribution network with logistic companies.
I&N is looking to outsource its warehousing and transportation operations to deliver its stores in Shanghai.
The logistics team organizes a tender, also called a Request for Proposal (RFP), inviting global logistics companies to submit their solutions.
As part of the RFP, I&N's logistics team provides
- Data and process requirements
- This quotation sheet outlines the different service prices for storage, receiving, box picking, piece picking, loading, and return management.
As the solution design manager, I was responsible for proposing solutions and calculating the price for each service.
The price was determined by considering the equipment and workforce costs driven by operators' productivity and the margin on sales.
P.S: The margin on sales is defined as the percentage of the turnover that represents the margin.
Warehouse and transportation teams would run the operations for three years to preserve this margin.
This could be achieved by either increasing the price (which was nearly impossible) or reducing costs.
The latter option usually came down to one key factor: increasing productivity.
But how do you increase productivity?
This can be done with aggressive management tactics using high individual productivity targets, salary cuts and illegal labour practices.
It often leads to increased employee stress and dissatisfaction which may impact your company's ESG score.
❓ Do you want to know more about Esg scoring?
The second method is to optimize processes, layouts and goods flows to help operators become more efficient with the same amount of effort.
This approach not only benefits the company but also improves the working conditions.
To illustrate my point, I will share examples that I have implemented in my career for operations in the retail, fast fashion and luxury industries.
