When it comes to supply chain visibility, are we looking at the right things?
There’s a great deal of talk about visibility these days, especially when discussing the need to get a clearer view of where shipments, inventory, and product are in supply chains.
But perhaps tracking a shipment or container or trailer isn’t as important as being able to clearly see what it costs to move that shipment. Greater visibility into the fundamental components of transportation costs are needed to truly improve supply chains, says Wally Lynch.
Lynch is CEO and a co-founder — along with his brother, Andrew Lynch, John Rodeheffer, and E.R. Williams — of Zipline Logistics, a third-party logistics (3PL) provider in Columbus, Ohio. The 3PL has been on the Inc. 5000 list of fast growing companies for six consecutive years.
Lynch thinks something is being missed in the continuous rush to find the next “disruptive” technology player in transportation and logistics. “The noise around tech disruption in the future seems to be eclipsing real problems that need to be solved today,” he told me this week.
“There are two main problems that come up in any shipper survey: service and price,” Lynch said. “These are perennial issues, always in the top three or four. How do you balance them? That is an age-old question but it still needs to be solved.”
The reason it’s not being solved is lack of visibility, he said, not into physical freight location but into actual costs and expenditures. That answers lie in the realm of so-called “big data” that can be broken down and analyzed to provide business intelligence.
Better analysis of shipment and supply chain data can provide a clearer vision of what a service really costs and how it should be priced emerges, Lynch said.
“Understanding your supply chain provides the flexibility you need in your organization to make trade-offs,” he said. “You learn what needs specialization and what doesn’t to dissect your book of business on price versus service and understand what decisions you need to make.”
The ability to dig into historical and real-time data and provide business intelligence on key performance indicators is something 3PLs such as Zipline can provide that will be difficult for new app-based logistics providers to disrupt or disintermediate, Lynch believes.
“Who’s in charge of looking at this data overall?” he asked. What’s needed, he said, are tools that help shippers dive into data “in an unintimidating way,” meaning without reams of spreadsheets, for one.
“Data visualization techniques are spawning conversations about price versus service, warehousing locations, and other important topics that beforehand were either done on the fly or didn’t take place at all,” he said.
But first, you need that data. Finding it isn’t easy. “So many large shippers are using antiquated systems in almost everything they do,” Lynch said. “And we still go into large clients or prospects and fight the battle that ‘it’s just price that matters to me.’”
Mindsets, as well as information systems, need to change.
Zipline has long offered shipment tracking services, Lynch said. The key there is identifying and managing exceptions, such as shipments that are in danger of being late, he said. But beyond that tactical approach, there's a strategic approach shippers need to take.
Shippers need to use data to find the "sweet spot," he said, not the exception but the optimal combination of service and price. "How can we make sure everything looks as similar to that as possible?" Lynch asked. "That’s where the conversation around data gets interesting."