How to Plan for Optimal Data Capture

Data is abundant but having them in a way that is readily consumable could be challenging. Distilling useful business insight from data often requires some work.

When businesses implement applications to digitize their operations, a lot of focus is placed on processing transactions. This encompasses tasks such as order entry, work assignment, and registration of transaction completion. In order to evaluate productivity and cost, managers seek intelligence that often requires extensive data preparation.

To minimize the effort necessary to prepare data for analytics, let’s take a look at what could be done in the design for data capture. Let’s use a 3^rd-party logistics business for illustration.

Productivity

The 3^rd-party logistics company offers warehousing, order fulfillment, and delivery services. Their prices are set on a per unit basis. This means it is important to drive the service delivery cost per unit as low as possible.

Receiving goods and putting them away quickly are key daily activities. When a shipment arrives, workers inspect the goods, count and log the information, then store them in the appropriate locations. Tardiness in the process would hold up the dock and space, creating a jam for other activities.

To evaluate the performance of the receiving process, the manager would look at the dock-to-stock time, dock utilization, and supplier errors. Data required for performance evaluation include the start and end time stamps for various tasks, dock assignment for each shipment, worker assignment, and types of supplier error.

Understanding the data needs helps to determine whether what is available from the warehouse management software is sufficient. Otherwise, additional data fields could be incorporated to minimize data preparation later on.

Cost evaluation

There are fixed and variable costs. Fixed costs for the business include warehouse lease, insurance, fleet, and equipment. Variable costs include labour, transportation, packing supplies, and so on.

In order to determine whether the current service fees are adequate to achieve a target margin, it is necessary to allocate the fixed and variable costs in a rational manner.

This requires a more granular analysis. For instance, costs of activities performed. The exercise to track costs associated with different activities could be done utilizing time reporting, appropriate accounts in the finance application and the transactions recorded in the operations applications.

It is straightforward to cost an activity when it is feasible to associate the related costs. When the available data are lumped together, it becomes more challenging. For instance, the labour associated with picking and packing certain types of orders.

Normal time reporting would track time worked on different activities only. In this case, the best tracking would be to identify the orders and client too. If the time reporting tool is not able to capture the additional details, other options would need to be explored.

The example illustrates common challenges with data. Without planning ahead and incorporating the capabilities as part of the application implementation process, it would be finding a needle in the data haystack when the need arises. The data preparation effort necessary then might only provide crude estimates at best.