As an analyst, when I evaluate technology vendors, I mostly focus on the features and functions of their applications, on their R&D roadmaps, and how their customers are using the applications to reduce costs, increase productivity, and so on.  When I evaluate logistics service providers (3PLs), I look at the scope of their services, the reach of their network, how they use IT to power their business processes and provide visibility to customers, and if/how they use methodologies like Lean or Six Sigma to drive continuous improvement.  All of these things are important, but the one factor I traditionally haven’t taken much time to analyze is the People technology vendors and LSPs bring to the table.  In this age of near parity, where the feature-function gap between vendors is shrinking and (at least on the surface) it’s hard to tell one LSP from another, People is arguably the last frontier for differentiation.

People as a competitive differentiator.

A couple of things transpired this week that led me to this insight.  First, I interviewed the Transportation Manager at a large CPG company to discuss their TMS implementation.  Overall, he was very pleased with the application and the business benefits they’ve achieved to date.  When I asked him about future plans, the manager mentioned several initiatives, including using the TMS to better manage their inbound operations (something many manufacturers are starting to focus on).  But then he raised a concern that I didn’t expect:  The TMS vendor recently laid off its transportation industry expert, a person who used to be a transportation executive before joining the vendor.  In the eyes of this CPG customer, this laid off employee (and more generally, the position he filled) was the most important liaison it had with the vendor.  This vendor employee spoke the same language as the customer, and truly understood the challenges and opportunities the customer faced because he had been “on the frontlines” himself.  This employee “got it” in a way that perhaps someone with just an IT background couldn’t.   In short, this CPG customer values the “human IP” a vendor brings to the table as much as the “technical IP” they provide.

(A quick aside: I spoke with the vendor afterwards and they assured me that they still value industry and domain expertise, and they will continue to provide this to clients, but just under a different organizational structure).

The second thing that led me to this “people as a competitive differentiator” insight is Transplace’s new marketing campaign.  I generally don’t highlight marketing materials from vendors and LSPs, unless they’re educational in nature or case-study centric.  But I’m making an exception in this case because the company’s new message-”I am Transplace”-aligns perfectly with what I’m writing about today.  When you visit Transplace’s website, a video automatically starts to play that shows various employees stating “I am Transplace” and describing their role within the company.  The message is simple: It’s not Transplace (an abstract corporate entity) that is managing your transportation and logistics operations on a daily basis, but Bill, and Suzy, and Tom, and Mary.  The company is adding a human face to what they do, and from their perspective, to what sets them apart.

What Transplace is doing, in many ways, is highlighting the importance of human relationships in logistics, especially when it comes to outsourcing.  I made this point back in November when I pondered the role of Facebook in supply chain management.  Here is what I wrote then:

“I remember talking to the CEO of a logistics service provider a couple of years ago, and he was saddened and frustrated by how the industry was changing.  ‘This business used to be about relationships,‘ he said to me, ‘I knew the people at my customers by name, and they knew me too.  But now I’m just viewed as a supplier, just another company to include in the RFP process, and relationship is less important than being the lowest-cost provider.’  Maybe the pendulum needs to swing back towards valuing relationships again.  Facebook and similar tools will never replace the effectiveness of shaking hands with a person, or listening to their voice on the telephone, but it can put a face and a name and a personality to all of those lifeless and error-filled EDI transactions flowing through the cloud.”

Will Transplace’s new marketing campaign win them new clients?  Who knows, but it could help them keep the ones they have if “I am Transplace” is not just a marketing tagline, but a philosophy that’s truly embedded in its corporate culture.

Are people viewed as a corporate asset and competitive differentiator at your company?  How much value do you give to “human IP” when you evaluate a technology vendor or LSP?

Back in January, I wrote that it’s hard to think about “talent management” when every day there’s a new announcement about layoffs and unemployment.  But it’s worth repeating what I said then: From a long-term perspective, I believe that talent management, particularly in supply chain and logistics, will separate tomorrow’s industry leaders from the laggards.