How FedEx Dataworks is using analytics, AI to fortify supply chains

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A shock absorber every business needs today is to gain new insights that are hidden in real-time supply chain data. Companies can capitalize on these insights 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, AI and machine learning. FedEx also sees data as core to its business and the basis of its competitive strength in the highly competitive global logistics, supply chain and shipping services industries.

Robust data analysis drives innovation 

“It was Fred Smith, the founder of FedEx, who said 45 years ago that the information about the package is just as important as the package itself. And, you know, it took time for the industry to catch up to that vision and have it 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 Dataworks, told the audience at a VB Transform Fireside Chat titled “Analytics in the modern supply chain: Data-driven success.” Dean Takahashi, lead writer for GamesBeat, moderated the session.

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FedEx collects data on its 18 million daily shipments across 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 through which the package is traversing, the weather, and other external factors, and use that data to create new customer-facing solutions that deliver immediate value.  

“As we are creating more and more data across the entire lifecycle and more granular and richer insights, we saw that many businesses struggled to understand 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 started coming together as COVID-19 was straining supply chains globally. Clouse explained that the small group of individuals who came together 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’s designed to improve supply chain visibility and increase predictability by capturing real-time data about every package, shipment, delivery route, environmental condition, customer delivery location, and delivery date.

“To succeed, we knew that we needed to build a next-gen data platform, one that was free of operational silos, and one where data and models and digital capabilities could be reused over and over again, across multiple use cases. And that’s precisely what we’ve done,” 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 FedEx global network. “The digital platform [Dataworks] is a centralized hub providing connective tissue. We bring data and information from all over our operations from all over the network globally. And bringing this all together allows seamless data exchange, encourages cross-functional collaboration and provides the connectivity needed to ensure we can provide these solutions to our customers.”

Clouse and his team at FedEx Dataworks have excelled at building a next-gen data platform that is driving transformational change throughout supply chains, logistics and operations. They’re accomplishing this by scaling up the platform on more use cases, expanding its core capabilities while at the same strengthening new functionality, and adapting and staying flexible in response to fast-changing market demands and rapidly evolving customer expectations. 

The Dataworks platform delivers during COVID  

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

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

This was crucial for delivering life-saving COVID-19 vaccines. “The vaccines coming into the FedEx network meant a full five-times increase in packages that needed priority monitoring by our service agents. So if you think back to the COVID labor market, increasing our service agent team size five times over wasn’t an option; we didn’t have that ability. So FedEx Dataworks was called upon,” Clouse explained. 

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

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

Clouse provided a second example. A customer was interested in carbon footprint management. FedEx used its capability to identify different modes of transit for packages sent from one location to another to create a tool that allowed customers to manage their carbon footprints while still receiving their packages on time. Last month this FedEx Dataworks tool, FedEx® Sustainability Insights for Customer Emissions Tracking, was introduced. It enables customers to track their carbon emissions, understand their carbon footprints and make better shipping choices.

FedEx Sustainability Insights for Customer Emissions
Earlier this year, FedEx launched Sustainability Insights for Customer Emissions Tracking, a new machine learning-based solution that uses predictive APIs to enable customers to more efficiently manage their supply chains, boost operational compliance, and integrate emissions estimates into their shopping carts for their customers. Source: FedEx Launches FedEx Sustainability Insights for Customer Emissions Tracking, May 24, 2023

Digital transformation lessons from FedEx 

After the Fireside Chat, Clouse shared lessons learned in FedEx’s digital transformation success, evidenced by Dataworks’ continued growth and the platform approach the organization has taken to launch digital services for FedEx customers successfully.

He advocates the following six areas as essential for succeeding in any digital transformation effort:

  • Embrace change: Creating a culture of experimentation and failure is crucial. Encourage employees to think outside the box, challenge the status quo, take calculated risks, learn from mistakes and move away from perfection toward continuous improvement.
  • Adopt a customer-centric point of view: Understand your customers’ needs and create tools and technology to provide highly personalized solutions that meet those needs. As customer needs change, be agile and adaptable.
  • Flatten hierarchies: Enable cross-functional teams to make data-driven decisions. Ensure that data-driven decision-making occurs at all levels of an organization.
  • Create an environment of continuous learning: Give your staff members training on the most recent tools and technologies, and then give them the authority to use those tools.
  • Have strong leadership: Leaders need to be willing to put their necks on the line, embrace change, encourage their teams to make mistakes and grow from those experiences, and work toward an environment of continuous improvement.
  • Always strive to improve sustainability: View reporting and compliance requirements as a catalyst for innovation and see how customers can receive more excellent value from the data captured.

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