How FedEx Dataworks uses analytics and artificial intelligence to strengthen supply chains

One shock absorber that every business needs today is to gain new insights that are hidden in real-time supply chain data. Companies can leverage this insight to make their supply chains more resilient. And the more resilient the supply chain, the greater a company’s ability to absorb unpredictable disruptions.

FedEx is on a mission to help its customers absorb supply chain and market shocks with the help of data-driven insights gained from analytics, artificial intelligence, and machine learning. FedEx also sees data as critical to its business and the foundation of its competitive strength in the highly competitive global logistics, supply chain and shipping services sectors.

Robust data analytics drives innovation

“It was Fred Smith, the founder of FedEx, who said 45 years ago that the information on the package is just as important as the package itself. And, you know, it’s taken a while for the industry to catch up with that vision and it’s reflected in its tools and technology, but it’s always been a part of the FedEx culture,” Clayton Clouse, director of data science at Fedex data works, he told the audience during a VB Transform Fireside chat titled “Analytics in the Modern Supply Chain: Data-Driven Success.” GamesBeat lead writer Dean Takahashi moderated the session.

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FedEx collects data on its 18 million daily shipments in 220 countries and uses the data to power various analytics, predictive modeling, and AI- and machine learning-based initiatives. What differentiates the company’s digital transformation initiatives is how they take every aspect of a package’s transit movements, including information about the environment the package is traveling through, weather and other external factors, and use this data to create new customer-facing solutions that deliver immediate value.

“As we are creating more and more data throughout the lifecycle and more granular and richer insights, we have seen that many companies have struggled to figure out how to leverage all that information and turn it into value,” Clouse told the audience.

How the FedEx Dataworks platform drives digital transformation

The FedEx Dataworks project began to materialize when COVID-19 was straining global supply chains. Clouse explained that the small group of people who met in early 2020 has grown into an organization with hundreds of members.

FedEx Dataworks combines the company’s digital and physical networks to create a scalable platform of interconnected data, insights and information. It is designed to improve supply chain visibility and increase predictability by capturing real-time data on every package, shipment, delivery route, environmental condition, customer delivery location, and delivery date.

“To be successful, we knew we needed to build a next-generation data platform that was free from operational silos and where data, models and digital capabilities could be reused over and over again, across more use cases. And that’s exactly what we did,” Clouse told the audience.

Clouse explained that the Dataworks team needed to create a centralized data platform to integrate all available data sources within the global FedEx network. “The digital platform (Dataworks) is a centralized hub that provides connective tissue. We bring data and information from all our operations from across the network globally. And bringing all of this together enables seamless data exchange, encourages cross-functional collaboration, and provides the connectivity needed to ensure that we can deliver these solutions to our customers.

Clouse and his team at FedEx Dataworks have excelled in building a next-generation data platform that is driving transformative change across supply chains, logistics and operations. They are achieving this by expanding the platform across more use cases, expanding its core capabilities while strengthening new capabilities, and adapting and remaining flexible in response to rapidly changing market demands and rapidly changing customer expectations.

THE Dataworks Platform delivers during COVID

One of the best examples of how Dataworks’ platform adds value for customers is the Package Fingerprint. The Fingerprint solution was built as a core feature of a customer-facing solution called Surround, designed to provide predictive analytics and real-time information to customers about the network, package and environment in order to mitigate risk throughout the lifecycle of package life.

Clouse explained that Package Fingerprint provides the long histories of package transit movements in the network to help identify the differences between packages that were on time and those that were late. This level of visibility shows FedEx exactly when and where a package has started to deviate from its intended or planned route.

This has been critical to the supply of life-saving COVID-19 vaccines. “Vaccines entering the FedEx network have resulted in a fivefold increase in packages needing priority tracking by our service agents. So, if you look back on the COVID job market, increasing the size of our service agent team fivefold was not an option; we did not have this capability. So it was called FedEx Dataworks,” Clouse explained.

Dataworks built a vaccine tracking and intervention tool in a week using Package Fingerprinting. Support agents were able to use this tool to focus on fewer packages at risk. This is how FedEx extends its Dataworks platform by breaking down new use cases into core functionality.

As Dataworks becomes more experienced in turning use cases into features, the process becomes more streamlined, resulting in faster time to market. Clouse says the goal was to “build a FedEx-scale tool that we knew would enable accurate decision making and increase productivity such that these service agents would be able to make sure all of these packages got to where they needed to.” arrive on time and I am proud to say that our service levels for vaccine shipments were near perfect, over 99 percent,” said Clouse.

Clouse provided a second example. A customer was interested in carbon footprint management. FedEx leveraged its ability to identify different modes of transit for packages sent from one location to another to create a tool that would allow customers to manage their carbon footprint while still receiving packages on time. Last month this FedEx Dataworks tool, FedEx® Sustainability Insights for monitoring customer emissions, it was presented. It allows customers to track their carbon footprint, understand their carbon footprints, and make better shipping choices.

Digital transformation lessons from FedEx

Following the Fireside Chat, Clouse shared lessons learned in FedEx’s successful digital transformation, highlighted by the continued growth of Dataworks and the platform approach the organization has adopted to successfully launch digital services for FedEx customers.

He advocates the following six areas as essential to success in any digital transformation effort:

• Embrace Change: Creating a culture of experimentation and failure is key. Encourage employees to think outside the box, challenge the status quo, take calculated risks, learn from mistakes, and move away from perfection towards continuous improvement.
• Adopting a customer-centric point of view: Understand your customers’ needs and create tools and technologies to deliver highly customized solutions that meet those needs. As customer needs change, be nimble and adaptable.
• Flattened hierarchies: Enable cross-functional teams to make data-driven decisions. Ensure that data-driven decision making occurs at all levels of an organization.
• Create a continuous learning environment: Train your staff members on the latest tools and technologies, then give them the authority to use those tools.
• Have strong leadership: Leaders must be willing to put themselves out there, embrace change, encourage their teams to make mistakes and grow from those experiences, and work toward a continuous improvement environment.
• Always strive to improve sustainability: See reporting and compliance requirements as a catalyst for innovation and learn how customers can get more excellent value from captured data.