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Don’t be Fooled: Finding True Data Integration

By Shannon Vaillancourt | 04/05/2018 | 9:13 AM

The difference between systems integration and a solution that integrates data is the most misunderstood concept in the market today. Companies sometimes think that systems integration is the same as data integration. However, simply integrating your TMS with another provider’s track & trace system does not provide visibility to the shipments. Also, having your TMS integrated with another provider’s freight invoice doesn’t provide you with financial visibility. While the track & trace integration typically allows the freight invoice integration to trigger a payment to a carrier, in this systems integration scenario the only action that has been performed is matching. The track & trace record and the freight invoice were matched to a shipment.

Data Integration Offers More Value than Systems Integration

Data integration merges all these records together and goes a step further by transforming it into actionable data. The actionable data allows the user to see only what they want to see and makes the data useful by showing only what’s relevant to them. Data integration is also less rigid than systems integration and doesn’t rely on one transaction to successfully occur before moving onto the next transaction. Instead, data integration pulls all the data sets together into one view, standardizing and normalizing the results so the user will see the whole picture.  Therefore, data integration is much more valuable than systems integration.

Data Integration vs. Data Aggregation

Similar to the confusion that exists around Data Integration vs. System Integration, a data integrator and a data aggregator are very different entities. There are many data aggregators in the market today that talk about the hundreds, or even thousands of connections that they have. Data integrators, on the other hand, are focused on the datasets or different types of data that are being integrated together. Every company I’ve ever met already qualifies as a data aggregator because they’ve been getting supply chain data from all their providers for years. Integrated data is a different story.

Data is only valuable if it provides three things:
1) Information,
2) Insight, and ultimately
3) Intelligence.

Integrated data delivers on these three elements by combining the datasets and transforming them into actionable data. The transforming process is what normalizes and cleanses the data to ensure the picture you are viewing is complete and accurate. Integrated data also allows you to make better decisions by warning you about the unintended consequences of your actions before you do something.

Data Aggregation Alone Produces Inaccurate Insights

Imagine a scenario where a shipper runs an analysis on their shipment history. The analysis shows the shipper a large savings opportunity. The shipper makes the recommended change only to save nothing. What happened?

After months of hard work and analysis, they realize that the dataset they used was missing a key element such as order type or customer. After they manually integrate the complete information, they see that all the projected savings was coming from a particular order type, or a customer where they couldn’t make the required change. In other words, the lack of true data integration in their analysis model gave them insights that were not accurate.

Selecting a Solution that Offers True Data Integration.

Here are three specific questions you should ask (and answers to look for) when assessing a logistics management solution that promise true data integration.

  1. What master data does the system require? A data integrator will have an answer; an aggregator will need little to none.
  2. Will you help us fix any data issues? A data integrator will simply say yes; a data aggregator may say no, or assure you that there are no data issues.
  3. Ask a carrier, “What it’s like to work with this provider?” A true data integrator will solve long standing problems the shipper and carrier have had, helping the carrier be successful and earning their respect.

Integrated data is all about pulling multiple sources of data together and transforming it into relevant information. For logistics, this means integrating the order, shipment, track & trace, and freight invoice data together and standardizing and cleansing to provide actionable intelligence, so you the shipper can turn your freight into a strategic asset.

The Evolution of the Visibility Revolution

By Shannon Vaillancourt | 03/02/2018 | 9:47 AM

As consumers we demand visibility. As logistics professionals, it is essential. Accurate and timely visibility is now universally expected, thanks to a few key technology advances during the past 20 years.

Technology + ELD Mandate Advances Visibility

In the late 90’s, small parcel began to take off with the advent of online tracking. What started as a confirmation of delivery has evolved into tracking as we know it today. Eventually, tracking became not only possible but expected in every step of a shipment from the time it is picked up until it is delivered. This type of functionality allowed online shopping to gain popularity. Then about 10 years ago, old technology became new again—GPS. GPS has been around since the late 70’s and in commercial use since the early 90’s. In the last decade, affordable GPS and smart phone technology no longer relegated these logistics tools to high end and expensive devices. Since then, GPS is now a crucial part of the visibility toolset and the ELD mandate and compliance deadline of December 2017 has provided the means to have real-time visibility to more than just small parcel shipments.

No Visibility, No Customers

It’s not just technology that has driven the shipper to demand more and more visibility. It is the consumer. Consumers demand their product is delivered to them quickly and require the ability to view the progress of their package at all points in the shipment. This trend has required the shipper to have visibility to their own freight. The shipper’s visibility needs have matched the consumers. The shipper is tracking their inbound loads to ensure that they have the product needed to fulfill the outbound order to their customer. And on the outbound side, the visibility is a requirement from the consumer. Today, a consumer would never order a product from a company if they don’t have a way to view the progress of the shipment on a web site. No visibility may in time lead to no customers.

Without accurate and timely visibility to their shipments, shippers are at a huge competitive disadvantage in the market. Without automatic tracking, the shipper must have a large staff to manually monitor shipment status and deal with inevitable delays. The shipper also must have a call center that is bombarded with numerous calls asking the question “where’s my shipment”, which then requires customer service to make a phone call to find out (which is incredibly expensive). It’s just good business for shippers to seriously evaluate their current visibility tools and what an upgraded solution can provide.

Look for a Wholistic Visibility Solution

When evaluating a new solution, shippers should be looking for one wholistic solution that can solve the visibility needs that they have, as well as the visibility needs that their customer has. Unfortunately, these needs aren’t the same. A shipper wants to be alerted if a shipment isn’t picked up on time or if an exception occurs that will cause the shipment to be delivered late. Both exceptions will require the shipper to act to resolve the issue. For the shipper’s customer, they need an easy-to-use web site where they can view their shipment’s progress and have an accurate delivery date. This requires the order information to be integrated to the shipment information, and the tracking information—resulting in one clean standardized dataset that clearly shows the customer that their order is on its way.

Three Criteria to Select a Solutions Provider

By Shannon Vaillancourt | 02/08/2018 | 10:09 AM

Whether looking to improve visibility, solve a specific challenge or reduce costs, there are three initial criteria to consider when searching for a logistics solution provider. These seem simple enough, but if not rigorously applied, trouble often follows.

3 Criteria to Select a Solutions Provider

  1. Puts my interests ahead of theirs.
  2. Is a proven problem solver.
  3. Listens to my unique problems.

Listening Provides Learning

The third criteria—listening to my unique problems—is a critical but often absent trait. In my experience there are many people who are great listeners, but to their own voice. The stereotypical sales person is great talker and can be very entertaining. All of this talk, however, prevents them from learning about the company they are trying to help. Oftentimes I’ve been told that by being quiet you’re not providing any help. Yet I find that by listening more, you not only learn what the real issue is that the company is trying to solve, you can also learn what solutions they’ve tried in the past and why they’ve failed. By listening, it can help you avoid the same pitfalls and failed solutions that have come before you.

Collaborative Conversations Defines Common Goal

When you meet with your prospective provider, the discussion should be a good back-and-forth conversation. I like to say that it should be a collaborative session between the two parties where the common goal is clearly defined—solve the company’s specific issue. The logistics provider should be able to offer clear and concise answers to what the solution is and how it will be implemented. At this point you should also be informed about the resources the company needs to commit. Perhaps the most important part of the conversation surrounds having a very clear and easy to measure return on investment. Without an expected ROI, it will be difficult if not impossible to gauge the success of the solution. With this information, you can have more confidence that your potential provider has accurately diagnosed the underlying problem and is recommending a solution tailored to address your specific challenges.

When Problem Solving Causes More Problems

Without a clear understanding of the common goals and the solution, unintended consequences can often occur. We see many instances where a company implemented software or hired a third-party to solve a problem only to introduce more issues while not solving the original problem. One of the most common issues that I see is a company trying to obtain clean, standardized data to use for decision making. The company buys a solution because they are told that it will deliver data faster and cleaner because it is using the latest technology to obtain the data. What the company finds is that they still don’t have clean standardized data, and the data they do have is a month behind. The provider tells the company that the solution has worked for their other customers and they must be doing something wrong. All of this trouble could be avoided by making sure the provider could pass the first three criteria.

Logistics Trends and Opportunities in 2018

By Shannon Vaillancourt | 01/04/2018 | 6:38 AM

This past year was very challenging for shippers. The hurricane season exacerbated an already tight truckload capacity market and sent shippers scrambling to find ways to cover their rejected loads. This also caused rates to skyrocket ahead of the 2017 busy holiday shipping season. There are several trends that have been emerging in the industry for the past few years that are now standard expectations, and many more dynamic changes in shipping are coming in 2018.

Logistics Trends in 2018

Coming into 2018 I expect capacity to remain tight which means that rates will remain high. I also see shippers getting more creative around final mile shipping. UPS and FedEx continued with another annual rate increase which is putting more and more pricing pressure on large packages. UPS has another increase scheduled for mid-year that is targeted at the larger packages—think of ordering a big screen TV online. I think we’ll also see shippers and carriers challenged with delivering complete visibility to each shipment. Customers are demanding visibility to where their orders are, which is causing the shipper to need complete visibility to their supply chains. Not only do shippers now have to ensure they can deliver the customer’s order, but they must also provide the customer’s real-time tracking of the order.

Opportunities Around Actionable Data

Looking at these challenges, I see huge opportunities for shippers. I think that 2018 will be the year that shippers move beyond data and focus on actionable data. Shippers in 2017 were focused on collecting data and thought by having all sorts of data with a flashy front-end to view it would instantly improve their supply chain. What shippers found is that data alone won’t offer insight or provide intelligence. Further, the blinking red, yellow, green lights indicating shipment status were only right part of the time.

Moving forward, data alone will no longer be enough. Data must be the right data: cleaned and standardized for the data to be actionable. There’s a reason why UPS is going to do a mid-year rate increase on a focused piece of their rate structure, and I know UPS determined a rate increase was necessary with actionable data.

Speed is the New Reality

In December 2015, we blogged about how the customer experience with expedited shipping had affected business expectations. We saw speed as an emerging trend, but over the last few years we have observed that speed is no longer a trend, it’s the new reality. It’s all about speed. The customer expects products instantly. This has necessitated the shipper and carrier to integrate tighter and exchange much more information than before.

The speed expectation has also caused the shipper to expect the same thing around data. Shippers are now thinking in minutes and hours, instead of days and weeks with respect to data. Track and trace data can’t be more than an hour old or the shipper deems it to be useless. Analytics that are telling the shipper how they are performing must be running in real-time. The shipper can’t wait to pull a month’s worth of data, then spend another week cleaning the data, and another week analyzing it. The results must be at their fingertips constantly telling them how they are doing and what adjustments they need to make. Real-time, actionable data is the way to deliver on this expectation.

Revolutionizing the RFP Process with Data

By Shannon Vaillancourt | 12/08/2017 | 6:58 AM | Categories: Web/Tech

There are three letters that most logistics and transportation professionals dread: “RFP.” However, new software solutions that provide clean, accurate freight data are a huge step forward in making the carrier RFP process more efficient and effective.

Surviving the RFP Process

Most companies perform an annual or biannual Request for Proposal process with their carriers. This long and arduous process can take up to six months to complete. The process typically starts with gathering data from their freight payment provider or system. Then the user must clean the data to remove all the non-standard shipments, balance due bills or incorrect data. All this data is placed in a spreadsheet and sent to the carriers with a cover letter outlining the shipper’s timelines and service requirements.

Once the shipper receives the proposals from the carriers, they must manually compare each carrier’s rate to determine what they must do for the second round. After numerous emails, phone calls and face-to-face meetings with the carriers; the new rates are finally agreed upon. But it’s not over yet.

Now the second phase of the long and arduous process begins: loading the new rates into the TMS and publishing the new routing guide for their inbound vendors. After all of this is completed, the rest of the year is spent working on the lanes that were missed during the RFP.

The Risks of Poorly Prepared RFPs

For both shippers and carriers, there are numerous pain points involved in the RFP process. For the shippers, the most notable is the incredible amount of manual work they have to do to gather data, analyze proposals, load the final results and perform the post-bid support. For the carriers, it’s having to guess on what they are bidding due to the lack of transparency from the shipper. The carrier knows that the data is only an incomplete, abridged version of what actually happens during the year. These scenarios present significant financial implications for both parties.

In college, one of my electrical engineering professors used to say, “Two things can happen when a mistake is made: 1) People die; 2) Money is lost.” Luckily, we’re in the business where only money is lost, and that’s exactly what happens when the bid packages are prepared poorly. When RFPs are built on incorrect or incomplete data, there are three scenarios: Either the shipper is losing money, the carrier is losing money, or in some cases, they are both losing money. It’s the definition of a “lose-lose” situation.

The Benefits of Using Big Data to Improve the RFP Process

With the data available today and the software tools that exist in the market, outdated manual RFP processes are no longer needed. I’ve seen some systems that can provide full transparency to the carrier. This means that the bid package contains the exact lanes that they can service, along with a targeted price to win that lane. The benefits of clean, actionable freight data are many – and they can dramatically improve the financial and strategic performance of your logistics. Here are three of the most important benefits.

Transparency. Because both parties (the shipper and carrier) have accurate and real-time shipping and freight data, bids can reflect the actual costs for each party. This results in “win-win” situations where carriers take the freight that’s the most profitable for them while offering the best possible rates.

Meeting higher expectations. Data has changed both the shipper’s and the carrier’s expectations. Both expect that their data and RFPs should be more accurate. Shippers are realizing that leveraging a clean, standardized and normalized dataset in an automated fashion will allow them to be more accurate in their forecasting. Carriers are leveraging the data to be more efficient and optimize their loads, so they can maximize their profits while delivering the services that the shipper needs.

Revealing the hidden costs of freight. Access to more and better data in real time means shippers are now able to see the true cost of freight by accounting for the expense and opportunity costs associated with the integration to their carriers and data quality. While the freight cost may be slightly higher with a given carrier, if this carrier is able to integrate with the shipper and automate the tender process, the track and trace information and the settlement process, the shipper will be wise to choose them over a lower (freight) cost provider. In this example, the true cost is actually lower from the “higher priced” carrier.

Reevaluating the Role of the 3PL

By Shannon Vaillancourt | 11/02/2017 | 12:54 PM

Following deregulation of freight in the 1980s, initially the role of the third party logistics provider was to provide knowledge the shipper didn’t have to supplement their internal team. Over the next 40 years this role changed. The 3PL gradually replaced the shipper’s in-house team and the shipper no longer retained in-house logistics knowledge. With today’s increasingly complex supply chains, rapid speed of change, and advances in technology, it’s time to reevaluate the 3PL’s role in the shipper’s logistics management.

Ensuring Continued Value

There is almost always some logistics problem a company is unable to solve themselves that prompts the decision to select the 3PL. Typically, the solution results in the company saving money on their transportation spend and so the 3PL begins to take on a larger role. After the initial solution, however, it’s important for the company to stay involved in what the 3PL is doing to ensure that they are providing continued value that positively impacts the bottom line. To ensure that you are receiving continued value, here’s three questions to ask:

  • How much transparency do I have around my freight spend?
  • Do I have the proper metrics at my fingertips to measure my supply chain performance in real-time?
  • Does the 3PL know more about our business than we do?

Outsourcing Tactical Execution or Knowledge?

When examining the role of the 3PL, the answers to the three questions above will help you understand if you have outsourced the tactical execution, or the knowledge. If it is the latter, you may want to reconsider. Choosing an alternative to a 3PL can seem like a daunting task because everyone thinks that they have to hire a bunch of people. Instead, companies should be looking for an alternative that allows them to bring their knowledge back in house, but not necessarily the tactical execution.

Managed Services Brings Knowledge In House

Today’s best alternatives to a 3PL will leverage technology and collaboration. This creates both value and a competitive advantage. One alternative is to bring the function in house and create a logistics team. When this function is brought in house, the internal team can outperform a 3PL because the group is focused solely on benefiting their organization. They can react and adapt quicker to the wants and needs of the company. Some large corporations will create a Managed Services group which provides in-house help for their individual companies or divisions.

Another alternative is external Managed Services complemented with technology. This option allows a shipper to re-acquire the knowledge that may have lost, while avoiding the expensive burden of a large tactical logistics staff.

We are in the information age and knowledge is power. In order to compete at the speed of business today, companies require a different type of logistics solution than was available 40 years ago. A Managed Services solution that combines market intelligence and consulting, along with technology that provides real-time actionable data and the ability to quickly execute on new strategies is that solution.

Does Your TMS Allow You to Benefit from Automation?

By Shannon Vaillancourt | 10/05/2017 | 9:34 AM | Categories: Web/Tech

Even in the age of digital automation, there seem to be some tasks that shippers and their teams continue to do over and over again. I often talk to shippers that just spent millions of dollars to upgrade or implement their TMS only to have to put together a large staff of highly trained people to now manage the TMS. It seems that the TMS requires a lot of repetitive and manual actions to make it work—one of the things that a TMS is supposed to eliminate!

How Many People Does It Take to Run a TMS?

The number of people required for a TMS can be surprising. There is the person that has to manually update the fuel surcharge each week to ensure that their rates are correct. Then, there’s the person that has to resolve any exceptions that occurred during the planning phase. Typically, this means assigning the same carrier to the same types of shipments each and every day because the TMS had a glitch of some kind during the planning. Sometimes, a team of people has to send emails and make phone calls because the primary carrier rejected a load.

Once the TMS makes it through the sequential tendering, it gives up and forces the team to have to send an email or make a phone call. To save time, the shipper always calls the same carrier because they always have a truck for the given shipment. Finally, there’s the team of people constantly uploading and updating rates in the TMS because they continually find lanes they don’t have a rate for, which prevents them from tendering the freight to a carrier.

Leverage the Software Provider’s Expertise

If you’ve ever had to tender a shipment, then you know that it doesn’t always go perfectly and there should be easier more automated ways to handle the tactical exceptions. The shipper should be leveraging the expertise of their software provider to prevent these types of situations. We should all know that the carrier’s fuel surcharge changes each week, so should you really have to update the fuel surcharge manually?

If you are shopping for new software, or a new logistics consultant, there are a few questions you should ask to insure your new provider is a true partner that will help you benefit from the automation the TMS provides.

  1. First, I would ask what type of internal support is required by the shipper to maintain the system. Does the shipper need to hire a team of 20 people to operate the system and keep it working, or does the system take care of itself?
  2. Second, I would ask what the upgrade policy is. Does the system auto-update itself or do the updates have to be applied manually? Updates are a crucial part of logistics software because carrier rates and rules are constantly changing. In the ultra-dynamic world of shipping, your TMS should be taking care of variables for you, not the other way around.

What Companies Really Need in Track and Trace

By Shannon Vaillancourt | 09/07/2017 | 9:12 AM

It’s hard to imagine logistics without track and trace technology. Before shipment tracking, freight shipments were recorded by hand with a pen, and much of what happened on a parcel’s journey from vendor to customer was unknown. Today, advanced logistics technology has brightened the path and track and trace technology has created faster and more efficient freight solutions for countless companies.

How it All Started

The origins of track & trace as we know it coincided with the advent of the widespread adoption of the World Wide Web. Prior to that, many carriers tracked their packages electronically, but it was not until the mid 90’s that carriers started to create a self-service user experience through the internet to view the information.

Today, more than 20 years later, there are many companies receiving this data from the carriers and presenting it to the user on their web screens. You can now see a map of where all your shipments are in real-time, and each shipment can be color coded (red, yellow, and green) to show the status of the given shipment. Track and trace has become an expected part of a customer’s shipping experience.

Deploy Track & Trace to Improve Logistics Management?

Track & trace ultimately helps companies provide better customer service. When used to track inbound freight, it allows companies to plan their receiving efforts more efficiently. When used to track outbound freight to the customer, it provides a way for the customer to have instant access to the status of their shipment, preventing lengthy calls to customer service to find out where their order is and when it will arrive. Track & trace data allows for the shipping process to move smoothly and expectedly, and provides opportunities for remedies when things don’t go smoothly.

There are many ways to provide improved logistics management, but what companies really need is a system that provides end-to-end track & trace and makes the data actionable. I believe there will be a second generation of track & trace solutions that allow a user to view the status of their order from end-to-end and makes the data actionable. Today’s solutions only show you the status of the order once it leaves the shipping dock.

When the track & trace data shows that the truck with your order has broken down, there’s no button you can press on a fancy tracking screen that will fix the truck and get the freight moving again. That’s why I believe the next generation of track & trace will integrate the data from the vendor (for the inbound freight) all the way to the end consumer (for the outbound freight). The data will be made actionable which will allow a company to diagnose the cause of their late shipments and develop sustainable strategies to fix it.

Choosing the Right Track & Trace Provider

When evaluating a track & trace supplier, I would ask them one question: “How will you help me create strategies that will provide me with a competitive advantage?” If they can’t answer this question and show you how their system is going to make the data actionable, then you should find a different provider.

Implementing a track & trace solution should provide the following three things:

1) Actionable data—this allows you to dig deeper into how you’re performing and diagnose the issues

2.) Strategy development—data to identify where to begin and what actions to take to solve these issues

3.) Strategy development—that allows you to expand beyond how you are doing things today which creates competitive advantage and long-term value. Seeing a bunch of color-coded dots on a map is cool, but impacting the bottom line is valuable.

Look Before You Leap: Avoid Unintended Consequences with Your Logistics Strategy

By Shannon Vaillancourt | 08/04/2017 | 6:44 AM

What do you do if your logistics strategy is just not working? While there are ways to reverse course after a faulty strategy is deployed, you must first admit it was faulty. This never happens. It is much better to look before you leap and test against historical data before you deploy.

Testing is not only a good idea, it is crucial to developing a logistics strategy. It’s the key to avoiding unintended consequences. Without testing you are not going to know the full impact of the strategy, positive or negative, until it is deployed. Once the strategy is deployed, even though it may be negatively impacting some areas, it will be much harder to make changes to it.

When Standardized Data is not Standardized Data

To simulate potential strategies prior to deploying a strategy requires data. But it’s more than having data, it has to be the right data. This data needs to be complete, clean and standardized. We oftentimes see companies that have lots of data and usually it is the correct data but it’s not clean, standardized data. What happens then is they standardize the data by (incorrectly) removing data that isn’t in agreement with the entire set. We hear things like “that was a one-time expense” or “that load was an anomaly and that’s why it cost so much.” By standardizing in this way, the completeness is lost and the analytics are now subjective which usually leads to justifying the strategy that a person wanted to deploy. Using a clean, standardized dataset that is complete should guide your strategy or even prescribe your strategy instead of being dissected to justify the strategy.

Simulating the strategy on the historical dataset prior to deployment is the most accurate way to test. By applying the strategy to a clean, standardized and complete historical dataset, the company will see the exact effect their new rules will have. They can then compare these results to how they were performing historically to understand the financial impact, customer service impact, and any operational impacts the strategy will have. If the simulation reveals any negative impacts to the historical dataset, the company can change or modify the strategy to avoid those. 

Sins of Omission

When developing strategy, what you exclude is as important as what you include. The omissions are always related to the exceptions that occur on a daily basis. When using incomplete data where the exceptions were removed because they were deemed to be unusual shipments, the results of the analysis are also applied (incorrectly) to the exceptions. For example, if 5% of your shipments require expedited freight, this could account for 20% of your overall cost. Let’s say the company’s freight spend is $10 million, and the incorrectly cleaned and standardized data represented the remaining 80%, you would be analyzing $8 million. If the analysis of the strategy reveals a 10% savings and that is applied to the entire spend of $10 million, the company would expect to save $1 million. The reality is they would save only $800,000 because the strategy doesn’t apply to the $2 million in expedited freight.

Another example I’ve seen of unintended consequence is when a company creates a new way to price their freight such as changing the rate base for LTL. They model the results and find huge savings, sign the new contracts with the carriers, then try to deploy the rates to find out their system can’t support it. I’ve seen a 15% savings turn into a 15% rate increase. This would have been prevented if tested with the same constraints that exist in production on clean, standardized and historical data.

Do Not “Set and Forget”

“Set and Forget” does not apply to logistics strategy. After a strategy is tested and deployed, there is still more work to be done. You have to make sure you have a solid data foundation in place that maintains the data-driven approach. This is the governance layer that provides real-time reporting and alerting to ensure that you are achieving your goal and it is made up of two pieces:

1) Savings KPI—measures the “old” rate compared to the “new” rate and

 2) Lost Savings KPI—measures the compliance to the new strategy by showing the financial impact of shipments that didn’t follow the new strategy. The goal is to have zero lost savings which means you are maximizing the strategy.

Only Complete, Standardized Data Makes the Grade

The most important step to take prior to deploying a strategy is testing. But to make the grade and provide the insights you need to avoid unintentional consequences, the strategy must be tested against complete, clean and standardized data. This allows you to create a strategy that creates the savings you’ve been looking for.

Are You Strategic about Data-Driven Logistics Strategy?

By Shannon Vaillancourt | 06/30/2017 | 6:57 AM

Logistics strategy has evolved over the past few years. Today, taking a strategic approach to logistics management has never been more important–or more attainable.

After the great recession, carriers took a serious look at costs and started to rationalize their pricing. This put a lot of pressure on shippers as the old strategy of yelling louder at their carrier was no longer effective to reduce costs. This created a big need in the market that has been filled through the advent of cloud computing, which allows large amounts of data to be collected and stored easily and inexpensively. The trend is now towards being data-driven with the data dictating the strategies. As a result, shippers essentially have gone from subjectively strategic, using strategies based on hunches, to objectively strategic with strategies driven by data.

Moving Strategies from Your Head to Your Loading Dock

Most companies have lots of logistics strategies in their heads but not many in place. What keeps them from implementing these strategies and incorporating them into operations? The most common barrier is fear. There is fear of implementing a strategy that may fail because they don’t quite have all the data needed to ensure that the strategy is correct. And then there is fear of a lack of IT resources. Often, strategies require IT support and involvement. In many companies, this support is as rare as a unicorn.

The first step to create an effective strategy is to base it on facts. In order to do this, you need clean standardized data that provides unbiased information which will allow you to become data-driven.  This lets you accurately diagnose the issues that you are experiencing with your logistics.

Look Before You Leap

Once you know the issues, you can develop strategies and simulate or model the potential strategies before you actually deploy the chosen strategy. One of the most important steps to creating effective strategy is testing it. Having a way to simulate your strategy using your clean standardized data allows you to find any unintended consequences of your strategy before you implement it. These unintended consequences most likely will prevent you from reaping the intended benefits of the strategy. For example, what if your strategy will only work if you added a day to the freight’s transit time and you know that you can’t do that? Better to see this before you implement the strategy than after.

Measure and Monitor for Success

Once the strategy is deployed, make sure you are measuring the proper values to provide the required operational transparency to ensure you are successful. Consultants or outside help can provide excellent insight when developing strategies. The challenge is making sure the consultant you bring in is truly objective. Ask yourself, are they talking us into a strategy? Or is the data influencing our decision? If it’s the data, then you are working with the correct consultant.

Governance is crucial. A lack of governance can actually cause a strategy to not work quite right. Often companies implement a strategy and don’t monitor it because they do not have a governance layer in their logistics solution. If you can’t measure and monitor the strategy in real time, it doesn’t take long for the profit leaks to remove any value that you hoped to gain with the strategy.

Objectively Strategic

The advent of cloud computing has opened new opportunities for shippers to be objective about their logistics strategy. With clean, standardized data, strategies can now be developed and tested prior to deployment to avoid unintended consequences. Your greatest logistics problems can now be solved with data-driven strategies.  

The opinions expressed herein are those solely of the participants, and do not necessarily represent the views of Agile Business Media, LLC., its properties or its employees.

About Shannon Vaillancourt

Shannon Vaillancourt

Shannon Vaillancourt is president and founder of RateLinx. Launched in 2002, his data services and consulting firm provides a customized, end-to-end supply chain solution from order to payment. RateLinx's software suite integrates data from multiple streams in real time to create a data foundation that allows companies to have a complete and true picture of what is happening in their supply chains. Applying advanced analytics with the proprietary Logistics in 3D process, RateLinx helps businesses in a wide range of industries access intelligence from their integrated data. With increased visibility, they are solving even the most challenging supply chain problems while reducing overall costs.



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