There have been huge advancements in the field of supply chain technology in recent years. Technological capability has been democratised beyond the preserve of very large enterprises and unheard-of levels of investment have flooded into the hands of progressive thought leaders, clever folk with neat algorithms and, inevitably, some chancers!
Integrated digital concepts can be sold easily. However, to fully digitise a supply chain, you must successfully digitise ALL of the transport components. In particular, road transport – often overlooked – which ultimately connects the producers and consumers in most modern supply chains. Without this consideration the data picture will always be sub-optimal and reliant upon spreadsheets and human beings…but it’s only road transport…it can’t be that hard, right?!
Wrong! Transport is the last bastion of the 1980’s in the modern supply chain, surviving on human knowledge, spreadsheets, admin functions, telephone calls, favours and, of course, paper! Most shippers struggle to truly understand, at the click of their mouse, the cost of transport at any meaningful level and at any given time.
Robots, Cobots, ASRS, Voice, AI, AR are all common parlance in supply chain meetings the world over. Some of the modern warehouses, ironically not built by 3PLs (the perceived experts), but by disruptors such as Amazon and Ocado, are truly outstanding collections of highly integrated technologies and assets, with few human beings in sight. These disruptors looked at a staid industry and decided to do things differently, leveraging technology.
However, when it comes to many road transport operations in Europe, there has been very little true technology adoption. Whilst every part of the supply chain can be digitised up to the back door, the whole supply chain is only as good as its weakest link. In this case, a bum on a seat in a vehicle which hasn’t fundamentally changed in four decades.
But it’s not just the vehicle journey which is digitally isolated. It is not uncommon to see the following in many transport operations:
· Orders are changed by people after a computer generates them, often because of demand and inventory planning deficiencies – but that’s another topic!
· Reference data is maintained (or not) in out-of-date spreadsheets and people’s heads!
· Plans are built by poorly paid planners, working 12-hour days, in spreadsheets or rudimentary TMS.
· Gatehouses are still manned by people 24 hours a day and mostly have no affiliation to either the shipper or operator!
· Yards are still managed by human shunters with bits of paper stuffed in top pockets.
· Despatch bays are often uncontrolled and inefficient (with dodgy traffic lights!).
· Traffic and despatch offices still shuffle paper like it’s just been invented.
· It’s often not what you know it’s who you know – “I need to get tipped”.
· Real-time visibility is (if you’re lucky) “it got there…I think, well I didn’t hear to the contrary”.
· Customer service consists of retrospective phone calls, emails, and lots of stress.
· Paper(!) PODs signed by ‘Daffy Duck’ with no defence for retrospective claims.
· Finance spreadsheets have no idea what the true cost of transport is, was or should be!
Obviously there have been some improvements and many regional carriers ‘out-tech’ the household names. However, in most cases, there is still a patchwork quilt of technology glued together by people and spreadsheets across the transport industry. All of this human-based activity creates a huge amount of grey area through which a digital process must drive if transport is to be truly digitised. After all, the clue is in the title – in a world of black & white (or more accurately 1s and 0s) the grey cannot exist.
Whilst people, and what they do (consciously or otherwise), are part of the issue, they are also a critical part of the solution. All system deployment relies on these humans to share, test, adapt and work with technology to ensure success. The sheer volume of possible scenarios in any transport operation means that, unfortunately, when transforming a 20th century transport operation into a 21st century one, the devil is always in the detail. Those tactical operators, with the knowledge built over many years, know far more than the individuals managing or those ultimately responsible for delivering the service to their customers/delivering the system change programme.
Flexibility and ‘greyness’ are liked by human beings because they can manipulate situations. This can simply be to make their lives easier (the majority of cases) or for other more Machiavellian reasons such as to protect margins or just good old fashioned self-interested survival. After all, knowledge is power (or at least job retention).
And then there’s the other key stakeholder to consider – the carrier(s). They have a vote in this transformation too. For without their willingness to participate in the change, it will simply fail to deliver the full benefit. With slim margins to be earned amongst smaller carriers, their ability to invest in technology is often hampered. It is not generally a lack of wanting to but rather an inability to procure the right solution at the right price.
For this reason, many shippers have consistently opted for the mainstream solution of giving it all to a 3PL to manage. They’ll deal with everything, including load plan, sub-contract and managing customers…after all they are experts, aren’t they?
However, the 3PL model, so prevalent in the UK, does not deliver transparency. Most commercial models are either hiding the true cost (closed book) or adding cost in full view (open book). Neither model incentivises better utilisation, collaboration or efficiency and individual P&Ls must operate as a collection of islands, much like Norway.
After all, who wants to land the job of Business Unit Director and then deliver the news “We’re going to reduce our margins significantly because we don’t need all of these vehicles or people”?! It simply doesn’t happen.
In addition to those key stakeholders who like it just the way it is (and has always been!), there are the negative impacts of:
- corporate memory loss
- the internal talent gap
- decades of underinvestment (in people, places and technology)
- IT departments struggling to keep up with rapidly changing IT landscapes, technology and deployment methods
- the contractor gravy train, as we call it, all making the job of successful deployment that much harder
- and, of course, the nasty surprises (known/unknown) lurking behind every corner or, more likely, in every project meeting!
Deploying a TMS is key to digitising the transport component of any supply chain. Customer orders must flow through an end-to-end system to be digitised…but it’s only transport, right?! The dream of digitising transport is sold to board rooms across the continent. Huge procurement programmes are launched for complex, multi-country, multi-modal scopes of work. Committees of internal stakeholders and SMEs are gathered and months and even years go by with nobody agreeing. And yet TMS is still purchased with large implementation budgets overspent, and ultimately under delivering. The result is often an underwhelming one with the business case missed, original sponsors having moved on and the intent and will superseded by apathy and fatigue. Why? Because despite a board room desire to complete the digital picture, the key stakeholders still aren’t ready to accept the change…transport doesn’t need to digitise does it?!
Well, it does! Transport MUST digitise. It is far too inefficient, with average vehicle utilisation at <60%. It’s negative environmental impact is too high, fossil fuels are far from being marginalised by alternatives and there is an ever-increasing human labour shortage. We simply must do more with less in the future. The only way we can achieve this is by connecting assets and their owners and by using technology to work smarter and more dynamically. Transport cannot continue to operate outside of the rest of the digital supply chain. Those who choose not to participate will simply be left behind, unable to be a part of the 6th wave and reminiscing about the good old days before ‘bloody computers’ came along!
Introducing a TMS and successfully digitising a transport operation can be truly transformational. It also happens to deliver double-digit benefit to the bottom line – not many projects can do that these days! It also delivers a far-reaching positive impact in a business. It turns a pure cost centre into a hugely positive corporate contributor, enhancing internal and external service and enabling commercial and market agility.
With 20+ years of experience, our advice for a successful deployment of TMS technology is keep it simple:
- it’s best to start with a single site
- ensure all humans (internal staff and other stakeholders) are on-message
- factor in the inevitable migration of people in and out
- throw away your old ideas on how these programmes are approached (no gravy trains here!)
- embrace the refreshing challenge that this will bring to your 20th century processes and human-imposed constraints.
The positive change is transformational. All those who have successfully implemented a modern TMS with 3T have enjoyed the considerable business benefits, and their people have enhanced their careers and not just lived to tell the tale!
Just remember you are moving from a world of 1980s Beta-max and cassette tapes to Netflix and Spotify and we are all comfortably enjoying those, regardless of age, location, and tastes!
About 3T Logistics & Technology Group
3T is a global transport management technology vendor with a proven track record and enviable reputation in delivering innovative supply chain and transport management solutions. Since 2001 3T has been on a mission to reduce empty running through shipper- carrier collaboration by using technology, and this remains the business’ north star to this day. Through its collaborative digital transport platform, Event, 3T is working with many other midmarket and large businesses within both the shipper and carrier segments to generate significant value for all. 3T has been recognised in the Gartner Magic Quadrant for Transportation Management Systems for the past 5 years consecutively.
3T’s technology delivers significant transport cost reductions and service improvement through automation, optimisation and data insights to businesses across the world. The award-winning digital transport platform enables supply chain digital transformation for businesses of any size and type, any transport mode, anywhere in the world.
About This Author
Rob Hutton is CSO at 3T Logistics & Technology Group.
Rob has 25 years’ experience in operating, consulting and commercial logistics roles since graduating in Logistics from Huddersfield University. Rob has worked for some of the largest businesses such as IBM and Kuehne+Nagel and with household names in a customer capacity including Marks & Spencer, British Airways, Crown Paints, E.on, The MOD and Kraft Heinz.
Rob is firmly of the belief that outdated operating models need to be challenged with 21st Century technology which drastically transforms logistics operations for the better through automation, visibility and data.
