Leveraging Analytics in Transportation to Create Business Value
Vijitha Kaduwela · 2012
In this paper, we discuss how Analytics is leveraged in the transportation industry to create business value. The reallife case studies presented in this paper cover Rail, Trucking and Airline. In each case study we discuss the business problems, the specific applications of Analytics to solve the business problems and the business value created in the process. We discuss the descriptive and predictive Analytics developed, and how they are used by the customers to gain a competitive advantage by optimizing capital expenditure, reducing operating costs, improving profitability, improving reliability, reducing risks and achieving compliance. We also discuss the specific SAS ® solutions and the products used for solving these business problems. We are planning to invite several of our clients to join this presentation. CHALLENGES IN TRANSPORTATION INDUSTRY Demand for freight transportation is projected to nearly double by 2035—from 19.3 billion tons in 2007 to 37.2 billion tons in 2035 (1). Additional capacity comes at a very high price, both financially and environmentally. This will put tremendous pressure on transportation providers to be more efficient in their operations while controlling costs as they scale. The Industry as a whole has to be creative and innovative in generating business value in terms of, reducing operating costs and improving reliability, making Analytics a necessity. Companies that leverage Analytics to compete in the market place will have a significant advantage over those who do not. In the following sections, we discuss the challenges and offer real-life examples of how few companies are leading the way with Analytics, as they try to better manage their operating costs. The transportation modes considered in this paper include Rail, Tucking and Airline. We also limit the operating cost discussion to opportunities for reducing maintenance costs while improving reliability.