Technology has moved on in logistics. Tim Fawkes of independent transport management experts 3t Logistics explains why companies should take advantage of innovation.
Many logistics companies face a dilemma - can they afford to invest in the technology that enables the automation of key processes - or can they afford not to? A consistently flat economy kills investment, and with historically low margins and higher costs, it's easy to see why most businesses are focused on day to day survival.
However, the art of survival in business as in nature is about learning to adapt. Whilst this can take many forms, a common and successful strategy is to embrace the new technology that enables us to do our jobs better, faster and more economically.
Taking technology on board
In my experience, the logistics industry, and particularly transport, has been slower on the uptake of technology than many others. Fortunately, it seems that times are changing with the UK industry taking on board new transport technology which will enable companies of all sizes to operate more efficiently.
The recent emergence of affordable web based transport management system solutions has enabled shippers to create collaborative platforms that smaller logistics providers are able to access, creating a virtual carrier network.
Moving with the times
Constant evolution is required to stay on top of the market: because systems fees are smaller, developers need to stay ahead of the game. For example, we have adapted our own SaaS Solo system, initially developed as an in-house transport management system, so that it is now accessible entirely through a web browser to shippers directly. The system works well because many companies have considerable transport expertise in-house and are looking for tools to help them manage transport processes more cost effectively rather than outsource all their activity.
Whilst vehicle tracking technology has been available for 20 years, until recently access to that information was limited. Hauliers could locate vehicles, but there was no link between the order on the carrier's transport system and the tracking system. However, solutions that link tracking to the consignment on the carrier's transport system are now available. Integrating the carrier system to the transport management system makes real time delivery confirmation information available across a multiple carrier solution for all types of carriers.
A return on investment
In the current economic climate, any investment is carefully considered and systems solutions must provide real and tangible savings with an immediate return on investment. This means that set up fees need to be small compared with potential savings, or alternatively be remunerated over the length of the contract. Systems such as Solo facilitate the management and optimisation of multiple carriers' tariffs, to consolidate orders and to audit carrier invoices delivering tangible savings. This alone can save well over 10% of the transport costs after fees, even before considering time savings.
Companies that have used the recession as a catalyst for stripping out inefficiency will really reap the benefit once the recession recedes. Automating transport activity will also enable them to maximise growth potential as resources are released for revenue generating activity such as sales or customer service. Solo enables the automation of many manual processes such as transport optimisation, carrier communication, despatch planning and carrier invoice audit and payment. This can not only reduce administration by over 50%, but provides management information which helps companies understand the cost to serve, driving future efficiency improvements.
It's tempting to adopt a 'bunker mentality' during difficult times and to keep doing the same thing in the hope that things will eventually improve. And surely they will - but if you want to be in a position to take advantage of more prosperous conditions, you need to implement effective ways of measuring transport activity and creating a platform for the step change to save money. Technology doesn't stand still - and neither should you.
About the author
Tim Fawkes is Managing Director at British company 3t Logistics (www.3t-europe.com). Tim has over 20 years' experience working with companies from multiple industries, helping them implement technologies to streamline and improve their supply chain processes. 3t works across Europe and has offices in UK, France and Spain. For more information contact Tim on 01162 824 111, or email tim.fawkes@3t-europe.com