Michael Bouari, Chief Executive Officer, 1-Stop Connections writes:
The phrase ‘data is the new oil’ has entered the world of freight logistics to suggest a commodity without which the industry grinds to a halt.
That’s certainly one interpretation – many sectors of industry would become redundant if data stopped flowing.
But there has always been data, and to understand the impact of the phrase, it needs to be put into context. The quote was attributed to UK data scientist Clive Humby, in 2006. Michael Palmer, of the Association of National Advertisers, later expanded on it:
“Data is just like crude. It’s valuable, but if unrefined it cannot really be used. It has to be changed into gas, plastic, chemicals, etc. to create a valuable entity that drives profitable activity; so must data be broken down, analysed for it to
The importance of big data to freight has grown over the last decade. However, some people – while acknowledging there’s more data around – have failed to realise there’s a difference between ‘lots of data’ and ‘big data’.
The former is a relic of a time, when data was a commodity companies sourced from accounting records. Having ‘lots of data’ meant a company could answer questions like:
“How much fuel did our fleet consume last quarter?” or “How much does it cost us to send freight from A to B?”
This type of data is called ‘look back information’. It was used to solve problems like: “We’re using more fuel for the fleet than we did last quarter? Let’s get rid of a few vehicles to reduce our costs to what they used to be.”
The effect of making a decision like that, based on that level of data, will be obvious to anyone who has worked in a company with a complex infrastructure.
But what’s driving big data that makes it more valuable? What makes data ‘the new oil’? The answer is the Internet of Things. This refers to the transformation of the internet from a network of information fed into it from external sources, to a network that gathers information from its own sensors.
The advantage of the IoT is that the data is being updated in real time.