If shippers want to blunt rising transportation costs, and carriers want more sustainable profits, they need to learn to connect not just the dots but also the bytes.
Greater integration of transportation technologies, connecting the individual truck to the overarching enterprise, is needed to manage increasingly complex supply chains. That integration must go beyond interfaces between software applications to embrace changes to underlying processes, from dispatching and routing to mode selection, and include not just a carrier’s internal systems but those of external partners and customers.
Mobile technology will help get widespread integration off the drawing board and into practical applications via tablets, smartphones and other onboard electronic devices that are changing business today as surely as the personal computer did in the 1980s.
Speakers at last month’s 2013 ALK Transportation Technology Summit hammered home the importance of going mobile and integrating technologies and processes not just within one enterprise but also across networks of companies. “We’re starting to see the concept of ‘mobileprise’ emerge,” said Brian McLaughlin, president of Minnesota-based trucking technology provider PeopleNet. “We’re taking back-office functions and delivering them to truck cabs so truck drivers can have real-time validation of data.”
Under the concept, a company knows in real-time how its drivers are doing, and the drivers can better adjust to unforeseen difficulties and track and benchmark their own performance. “We’re taking mobile applications and combining them with business analytics,” McLaughlin said. “Those things alone are very powerful, but now drivers are seeing the same thing the back office is seeing. That allows real-time coaching.”
McLaughlin and other speakers emphasized the need for trucking to integrate or synchronize systems such as dispatching, mobile communications and onboard navigation to achieve real-time fleet optimization and management — especially as regulatory changes such as tighter hours of service affect fleet utilization. “Look for ways to bring the applications, the data, the mobility together to drive the highest level of return on investment that you can,” McLaughlin said.
Processes — route planning and execution, for example — need to be connected in a “feedback loop,” so real-world results inform and guide real-time planning. If a company’s delivery plans go awry because of unexpected problems, planners need to incorporate those problems into future routing and dispatching plans.
“We like to think of this as a relay race where everyone has to hand off the baton to the next player,” said Stephen Cavanagh, senior principal at Atlanta-based technology provider Manhattan Associates. “Customer service hands off to the route planner who hands off to the driver manager, who hands off to the driver. If we botch the handoffs, we lose the race.”
The ability to create systems that will make such handoffs possible is progressing rapidly, said Norm Ellis, vice president of sales and marketing for Omnitracs, the mobile communications subsidiary of Qualcomm. “I think you’ll see more integration, because there are going to be more opportunities to do it. We have more flexibility today to develop APIs (application program interfaces) and interface with potential partners, whereas before it was all proprietary software. Now we’ve got developer kits.”
All those efforts will come unplugged, however, if carriers don’t get basic data right. “Granularity is where many of them fail,” said James Langley, vice president of business analytics for transportation software supplier TMW Systems. “It’s important to understand tire costs, breakdown costs, warranty recovery costs. If you don’t, you don’t know where you’re missing an opportunity to cut costs.”
But simply applying technology to existing processes like a Band-Aid won’t work — and could make matters worse while wasting a heap of money. “If you have a broken process, all the technology in the world won’t fix it,” said Derek Leathers, president and COO of truckload operator Werner Enterprises. “It will just make (that process) efficiently wrong.”
Since the days when the horseless carriage replaced the horse, the greatest leaps in transportation innovation and efficiency have come when new technologies enable radical and sometimes unexpected change to processes or operations. The motor truck, for example, didn’t replace the horse wagon until fleet operators began considering new distribution patterns designed to take advantage of the truck’s technical advantages.
An equivalent today to that era’s challenge is the growth of intermodal and multimodalism, spurred in part by widespread use by shippers of third-party logistics providers. It’s not enough for a trucker to think like a trucker these days, Leathers said. “We’re a trucking company in our roots and in our heart, but we’ve evolved to become a logistics and freight forwarding operation that is more complex,” he said.
That evolution wasn’t easy. “It was hard to wake up and say my No. 1 mission in life is to work with my customers to eliminate the need for trucks,” Leathers said. “But if we don’t do it, someone else will.”
And intermodal isn’t just about competition, or cooperation, between railroads and trucking. “We’ve got to continuously look for the combined best efforts of ocean, air, rail and truck to make it work,” he said.