The Dow Jones industrial average was down more than 250 points yesterday, closing at its lowest point since May 7, 1997. Going back in time may be cool and exciting in the movies, but this type of time travel gives me motion sickness. And to make matters worse, some folks are saying the worst is yet to come.
Speaking of time travel, next month will mark my ten year anniversary here at ARC, and despite all the changes that have occurred in the industry this past decade, there’s so much that has stayed the same. It never ceases to amaze me, for example, how many companies (big and small, famous and not-so-famous) still manage their transportation operations like its 1997, or maybe even 1977, with spreadsheets, faxes, and telephone calls.
I recently interviewed Max Beach, Contract Administrator and Logistics Manager at Northwest Pipe Company and Michael Martinez, Director of Distribution at The Jel Sert Company, in preparation for a webcast we’re participating in next week (if you’re interested in attending, you can register by clicking here). I won’t steal their thunder today, but let me just say that their stories are similar to countless others I’ve encountered over the years: successful companies that, until a year or two ago, were managing their transportation processes manually, without a transportation management system (TMS).
Back in early 2005, I did some research on how shippers and carriers communicate with each other (“Trends in Shipper-Carrier Connectivity“-available to ARC clients only). Although the use of EDI was common among large companies, especially for financial settlement, a large percentage of the companies surveyed were still using emails, faxes, and the telephone to tender and book shipments and to schedule appointments.
Source: "Trends in Shipper-Carrier Connectivity", ARC Advisory Group, August 2005
Source: "Trends in Shipper-Carrier Connectivity", ARC Advisory Group, August 2005
I’ve been making the argument lately that companies should view this economic slowdown as a “catalyst for change“-i.e., as an opportunity to transform their business models, processes, and supply chains. If you walk down to your transportation department today and see employees “dialing for diesels” or feeding forms into a fax machine, then you know where to start. Trust me: there’s no better time than now to streamline and automate your transportation processes, to optimize your loads and routes, and to capture the cost savings and productivity improvements that you’ve been leaving on the table.
The days of high fuel prices and tight capacity (dare I say, the “good old days”?) will return, and companies that transform their transportation management processes today will be in the best position to succeed down the road, when this time machine reverses course and heads back to the future.
Adrian,
Your article covers a great point about the need to have simple, easy to use transportation apps. Pre-existing connectivity by the TMS vendors can get companies out of the fax and phone era. The challenge is not an application issue, but whether the vendor has created a network infrastructure that supports multi-party connectivity and made the investment to get carriers and other LSPs connected to the network.
As for simplified apps, while transportation system users say they want them, but they also insist on convoluted contracts and business processes that make for complex systems. In addition, change management is still the leading culprit for lengthy systems implementations, SaaS or not. Until users are willing to adopt standardized business processes and rate data from the service providers, they can’t expect to cut implementation time down dramatically.