The logistics of the data: what are the challenges over the horizon?

23 / 04 / 2021

Looking at the data market through the lens of product logistics

The 1st industrial revolution brought not only innovation on the manufacturing processes but also on the delivery of the products to the selling points. Since then, the logistics industry hasn’t stopped growing, improving and optimizing every single link in the supply chain with multiple actors in the process – demand forecasting, purchasing, production planning, inventory, warehousing, packaging, distribution planning, transport, customer service, etc. Consequently, it has generated a huge amount of very specialised and synchronized business around it, with tight profit margins: a very mature market, a consolidated value chain where multiple players focus on their portion of the business. The main beneficiary? The customer. We live in a world where we can order a customised item to be manufactured in another country and be delivered at home in 2 weeks, even 2 days if the item is already manufactured.

However, not all the sectors offer the same readiness and high efficiency level. If we compare the data sharing with the logistics of products, it is easy to identify the lack of maturity in the data market.

At first sight, we visualize data providers on the one side and data consumers on the other side, with platforms and initiatives to facilitate their access, sometimes offering data management or analytics services in between. In the overall process, the number of chain links still remains remarkably low with a clear lack of specialization, even a lack of organization and order, entailing a negative impact on the chain’s efficiency.

In the digital era, the data market operates in virtual channels, apparently easier and faster, with no physical restrictions but with the challenges of the digital environment: data quality, security, interoperability (including language) or privacy as few examples.

The European Data Strategy is based on the creation of the digital single market, where private and public entities will have control of the use of the data they generate and easy access to a pool of data. The creation of European Data Spaces will strengthen Europe’s capabilities and infrastructures for hosting, processing and using data. The three main pillars for implementing this strategy are the deployment of the IT systems (platforms, access to cloud infrastructure and services); the governance frameworks with the definition of roles, standards and protocols; and the incubating activities to promote the use and exploitation of data by SMEs and start-ups.

Now the doubt is the place for the DIHs in these sectoral Data Spaces and their alignment with other upcoming EU supported initiatives such as the Testing and Experimentation Facilities (TEF) under the Artificial Intelligence strategy (also with a sectoral approach), and hence the business models we want to generate to add value in the data sharing market.The logistics industry has been growing for hundreds of years, and is still working on its optimization.

Why is the data market so blurred with no clear timeline or defined actors to be involved? Do we have a realistic overview of the link chains that DIHs want to cover in the process?