Big data, data science and machine learning

Company portrait

Hermes Germany, based in Hamburg, is a leading logistics service provider in Germany and a partner to numerous online stores and multi-channel retailers in Germany and abroad. The focus of Hermes Germany is on national and international parcel delivery and the handling of upstream goods flows with supply chain management services for customers and retailers. With over 14,000 Hermes ParcelShops in Germany, the company has the largest nationwide network of acceptance points in Europe, which can also be used by mail order companies as an alternative delivery address. At these collection points, which are set up in kiosks, petrol stations or drinks markets, for example, Hermes Germany offers flexible opening hours and focuses on personal contact with customers.

Hermes Germany is one of twelve companies in the internationally active Hermes Group, which is part of the Otto Group. The range of services offered by the companies operating under the Hermes brand covers the entire retail value chain: sourcing, quality assurance, transportation, fulfilment, parcel service and two-man handling. In the 2016 financial year, the Hermes Group increased its total turnover to 2,640 million euros and currently employs 12,618 people.

Business Intelligence at Hermes Germany

Today, the Business Intelligence department at Hermes develops models for reports and analyses based on existing company data, which enable better operational or strategic decisions to be made. The focus is on further development towards explorative data analysis. The Business Analytics service in particular is intended to support the company in making data-based decisions with its iterative, systematic analysis methods. This includes advanced statistical analysis beyond existing company data to gain insights that influence business decisions and automate and optimize business processes

The challenge

Hermes stores large volumes of data in its data warehouse every day. Many millions of new data records are added every day from over 30 connected source systems. These offer enormous potential for data analysis. In the past, however, the data was still insufficiently evaluated. This had to be changed. New evaluation/information requirements are, for example

Hermes aims to continuously offer its customers and recipients more extensive services as the focus of its business interests. To this end, every Hermes department should be able to approach the BI department with its business cases (use cases).
The aim is to support the entire value chain with analyses and to use them to control company processes. The growing information needs of Hermes and its customers are to be optimally met. This is an important contribution to ensuring the company’s success in the future.

Creating new structures together

The symbiosis of project marketing, implementation of requirements and application of suitable modern mathematical methods and technologies is the key to success:

  • Competence marketing – publicizing competence as a new BI service in the company, arousing interest and establishing the service
  • Ready for immediate analysis – parallel establishment of the Business Analytics organizational unit as a results-producing unit
  • Fast response – From recording the requirements and questions of the specialist department to data procurement and analysis using data science methods, through to data visualization and presentation of results.
  • Attractive presentation – introduction of modern visualization concepts
  • High user satisfaction – introduction of agile (timeboxed) working methods (iterative approach: First baseline model, then continuous improvement of the baseline)
  • Suitable big data architecture – support in setting up the big data infrastructure incl. Technology evaluation (Teradata Aster, Teradata Listener, Hadoop, …)

Project ID: 4405

Forecasting shipment volumes with artificial neural networks

Project ID: 4406

Address duplication through fuzzy matching

Project ID: 4412

Determination of influencing factors for location optimization in logistics

Project ID: 4420

Expansion of data warehouse reporting with modern visualization concepts

Analysis examples

Using suitable methods from the field of machine learning and adding historical data from the data warehouse, measurable improvements in forecasting quality are achieved compared to the previous forecasting approach. By using machine learning methods (e.g. artificial neural networks, random forest), shipment volumes were forecast for selected logistics locations (HUBs) with low to moderate errors. It has been proven that methods based solely on historical data lead to improved forecasts even without the addition of expert knowledge.

The ParcelShop analysis looks for influencing factors that have an impact on ParcelShop shipment volumes. Using suitable methods from the field of data science (correlation analyses, significance tests, etc.), correlations between ParcelShop characteristics and shipment volumes were established, which will be taken into account in the future when planning and selecting ParcelShop locations.

PTA advises and supports the expansion of operational data warehouse reporting to include modern forms of visualization based on GEO information. In Hermes ParcelRadar, anonymized shipment data is linked with GEO coordinates and polygons and processed visually.

The recipient analysis determines how many consignments a recipient receives from HERMES on average per year. There is no unique recipient identification in the current delivery process. The challenge is to identify recipients based on anonymized, incomplete and non-standardized address data. Such big data problems are known in the literature as duplicate recognition/object identification (record linkage). The performance of the Teradata Aster analysis platform was tested for address matching.

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Gerd Minners

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