Case study – Digital adoption in Logistics

Aims and benefits

This is a case study about a transport company that successfully reduced its insurance premiums and claims and also delivered sustainable change through the use of data.

FiguringOutData.com was commissioned to build a digital platform for a specific aim.  To help reduce insurance premiums and claims.

It didn’t go quite as expected.  Outcomes, however, were considerably better than planned.  In addition to reducing both claims and premiums, the whole organisation has changed its relationship with data such that it now permeates all aspects of management thinking and operational planning.

Background

The company is based in South London and serves customers throughout the Capital and all points north to a line that extends from Liverpool across to Leeds, and south west as far as Exeter.  It is also a member of the Pallex pallet distribution network.

The problem that the platform needed to help solve related to a high number of insurance claims, and persistently high insurance premiums.

A generous bonus scheme was devised for drivers, that was linked to their accident record, in the hope that it would promote more careful driving and fewer prangs. 

On its own however, it had limited impact, therefore some form of digital assistance was needed.

Plan

The company asked for a platform to harness all there is to know about a driver’s performance, their vehicle and the journey. 

We therefore capture telematics records from the vehicle, fuel records, start of day vehicle checks, Pallex service delivery records, Tachomaster shift and infringement records – and insurance claim records.

The plan was to calculate performance scores for each driver taking all of the above into account, which would then be linked to a system of rewards. 

If good performance scores could be turned into some form of reward for good driving, it should lead to fewer insurance claims and lower premiums.

Delivery

Things didn’t, however, go to plan.  Thanks to events such as an urgent switch to a new provider of telematics information, the fuel provider undertaking a major technical upgrade, and the Pallex system undergoing a major overhaul, it was a while before the data used by the platform could settle down.  This delayed the full suite of performance metrics from becoming available.

In the meantime, however, the dashboard containing the metrics that were available was displayed in the main transport admin office, and in the foyer to the building.  It was therefore visible to everyone – company staff and visitors alike.

The outcome from this simple act was that those metrics started to climb – and have remained high ever since – with insurance claims and premiums falling to their lowest level ever.

Outcomes

The platform had been designed for managers to ‘manage’.  The change required to insurance costs had been planned as a top down initiative – involving measures intended to serve as both carrot and stick.

But the positioning of large monitors such that everyone could see what was being measured meant that people could now see for themselves what needed to be fixed and why.  They could recognise themselves within the problem, and they could see what needed to be done to solve it. 

They could also see why the original plan to use data to leverage change made sense, even though the data laid bare every transgression by a driver, with little supporting information about the context or cause.

The company has made the same information available to everyone.  They have also ensured that the data presented can be trusted.  This is therefore a major signal to everyone in the company that they are trusted to use the information to help do the right thing.

In addition to lower insurance costs, the outcome is therefore a workforce that is fully engaged in decisions about how they should perform.  One that has also accepted fully that data has an essential role to play going forward – in terms of the day to day decisions made in the yard and on the road, and in setting the direction to be taken by the company going forward.