Technology seen transforming supply chain to create ‘connected’ enterprise

Technology seen transforming supply chain to create ‘connected’ enterprise

Driven by the need to control rising operating costs and broaden profit margins, trucking companies are investing in technology at a record pace. That’s delivered double-digit revenue growth for McLeod Software every year since the end of the recession in 2009.

Now the 29-year-old software company is poised for a bigger leap. Increased demand for greater connectivity, mobility and exchange of data among supply chain partners is busting opening the box surrounding trucking enterprises that used to be self-contained.

“What we’re creating is something I like to call the ‘connected’ enterprise,” said Tom McLeod, president and CEO of the Birmingham, Alabama, business. “That specifically means connected with your customers, connected with your staff, connected with your drivers.”

McLeod spoke at his company’s annual user conference Sept. 15, attended by 800 registrants this year, in Washington, D.C. Increasingly, the users of McLeod’s products aren’t just truckload carriers but freight brokers and shippers, with or without private fleets.

Those mutual customers and trading partners are exchanging a great deal of data — on rates, for example — in time-consuming bidding processes that could stand far more automation, McLeod said. There’s still work to be done to speed and simplify processes.

Much of the electronic communication between motor carriers and shippers is done the same way it has been since at least the 1990s — via electronic data interchange, formatted messages that document specific orders or events, such as a load delivered.

That EDI message in itself, however, often is the electronic equivalent of a fax document, or perhaps even a telegraph, and, depending on how a system is set up, its transmission may do no more than duplicate an older pre-electronic process without adding “connectivity.”

“We don’t have many customers connecting to the shipper enterprise resource planning system and making deeper connections into their supply chain,” McLeod told JOC.com at the user conference. “There is still room for connections to be made from that standpoint.”

As shippers and third-party logistics providers require more detailed and complex information from carriers, that is likely to change. One example lies in the food chain, where tightening regulations demand greater record of the chain of custody to ensure food safety.

“There will be more requirements for movement of information between the shipper and the carrier, and much of that can be implemented now,” McLeod said. “It will require taking the next step, extending information management more carefully to shipments.”

Mobile technology also will enable the development of more multilateral data networks connecting carriers, shippers, logistics partners and truck drivers in the field. Mobility is one of five technology “streams” McLeod identified as supporting the connected enterprise.

“First,” he said, “technology must be proactive and let people manage by exception. That means adding alerts for events that haven’t even happened yet.” For example, alerting a carrier that a rate hasn’t been confirmed by a shipper two hours before a pickup.

Mobility must be incorporated into systems, not just for truck drivers but also management, enabling work to be done where people are, not just at a desk or in a truck, he said. And so-called Big Data must be turned into usable “Big Insight” for better decision-making.

Workflows and processes need to be automated “without boundaries,” meaning crossing corporate lines and definitions that divide shippers, carriers and 3PLs. And systems architecture must be easily connectable, which means scalable and expandable.

More and more work will be done on what could be called today’s “super computer” – the smart phone. At the user conference, McLeod said the software company would offer carrier customers branded mobile apps for Apple iOS and Android phones and tablets.

“The movement of information to the right person at the right time with minimal effort is where we want to go,” McLeod said. “We call that the frictionless information era.”

Contact William B. Cassidy at wcassidy@jc.com and follow him on Twitter: @wbcassidy_joc