Logistics is all about efficiency. In order to make sure your business is firing on all cylinders, you need to track and understand huge amounts of data. And it doesn’t stop there; you need the right tools to turn that data into actionable information. You need a plan. This is where data visualization comes into play.
By creating scorecards and reporting that compile and display data in a singular, easy-to-understand place, you can see how your business stacks up against its most important KPIs. With a data visualization plan in place, you can transform virtually unlimited amounts of information into tangible and effective improvement strategies.
Data visualization on the psychological level
Did you know that data visualization is psychological? It’s true! As a general principle, seeing data in the form of a chart or graph is better than trying to understand spreadsheets or reports. Your data tells a story, and the most effective medium is a picture book. It might sound simple, but the psychological benefits of data visualization go far beyond the pretty colors and stylish graphs. It’s all about the way our brains process and understand information.
Pre-Attentive and Attentive Processing
Pre-attentive processing is the secret sauce of data visualization. It’s what makes pictures (such as graphs and charts) easier to absorb than Excel spreadsheets. Imagine a poster filled with blue squares. Somewhere on that poster is a cluster of red squares. At a glance, your brain will automatically identify these unique elements. In other words, you don’t have to actively think about finding a discrepancy; your brain does it for you. That’s the beauty of pre-attentive processing.
On the flipside, attentive processing requires concentration. A word search, for example, requires attentive processing because you have to actively search for the information (or letters) you want to find. Data visualization allows you to maximize pre-attentive processing so your brain can skip the line and get right to the good stuff: the story within the data.
How data visualization improves KPI reporting and monitoring
Key Performance Indicators (KPIs) are the backbone of business intelligence. They are (or should be) the strongest indicator of whether or not your business is successful. If your KPIs are on track, your business is too. This isn’t to say you should only track one or two performance indicators, but simply that your KPIs should reflect the overarching goals of your logistics business. Once you understand what those metrics are, you can build additional data visualization for smaller, supporting metrics.
Data visualization improves performance monitoring for several reasons. First, it saves time. Time is money, especially for logistics experts, so any tool that helps you streamline reporting is a good thing. Here are a few ways data visualization can speed up the data reporting process:
- Provide instant reporting (no lag time)
- Is available to stakeholders at every level, even on-the-go
- Viewable from multiple devices (computers, tablets, smart phones, etc.)
Turning information into useful information
Most importantly, data visualization bridges the gap between “what information do we have?” and “how can this information help us become more efficient?” When you send a static paper report out, the data is instantly outdated. It’s also easy for important information to get lost or buried. By integrating dashboards that are easy to understand (thanks to pre-attentive processing), your reporting can eliminate the middleman and help you spend more time using data and less time trying to understand it.
There are several practical ways to accomplish this on your dashboard:
- Proximity: Pair related metrics next to each other. By doing so, you can more easily spot trends and patterns that share a causal relationship. The number of deliveries within a given month and the average number of minutes it takes to unload shipments, for example, could relate to each other in ways you didn’t notice before.
- Choose the right charts: Not all graphs are created equally. In fact, specific types of data visualization are best suited for specific metrics. If you want to track the number of deliveries in a specific region throughout the month of January, a pie chart probably isn’t your best option. If you want to know the percentage of deliveries that included no broken merchandise, however, a pie chart might provide the best, at-a-glance view of the data you need.
- Use drilldowns: Drilldowns are like reports within reports. To avoid cluttering up your dashboard with every possible piece of information your business needs, try displaying the most important metrics on the front page. Then, give users the ability to choose their path of analysis. Whether they drill down to charts, other dashboards, or external URLs, they will have immediate access to the answers they need. In short, drilldowns are the best way visualize data that supports your larger objectives.
Which key performance indicators should you visualize?
Picking the right KPIs will shape the way you view your business’ success. In other words, knowing what metrics to pay attention to is a vital step in the data visualization process. In the world of logistics, some common and useful metrics include:
- Shipping and Delivery Times
- Order Accuracy
- Transportation and Warehousing Costs
- Warehouse Capacity
- Number of Shipments
- Inventory Accuracy and Turnover
- Inventory to Sales Ratio
- Percentage of Damaged Goods
- Driver Safety and Incident Metrics
Before you design and launch your logistics dashboard, take these metrics into consideration and prioritize them. Scrutinize the implications of each data set and pair them with related metrics, then begin compiling a storyboard to visualize what you want your dashboard to look like. Additionally, keep in mind that – just like your goals – your dashboard can change over time. If you want to focus on one specific area of improvement, focus on that in your dashboard. If a metric doesn’t seem to give actionable insights, remove it. Your dashboard is a work in progress, just like your processes.
