Guest Commentary: Reaching the Next Level of Cost Savings and Process Efficiencies in Transportation

As I travel the country meeting with customers and prospects and listen to their challenges, the same question comes up in almost every interaction: “We know technology can help us,” they say, “but what else can we do?”

In other words, after companies achieve the low-hanging fruit benefits of a transportation management system, what other innovation will help them capture the next level of benefits?

I believe transforming market data into actionable intelligence is part of the answer.

Many shippers, both large and small, have eliminated process inefficiencies by implementing a TMS, either in a software-as-a-service (SaaS) environment or on-premises. Similarly, carriers have invested significantly in technologies to run their equipment and operations more efficiently and cost effectively. The next step for both shippers and carriers is to use data-driven market intelligence to find additional opportunities for cost savings and other benefits.

Measuring yourself against your own past performance is no longer enough. In today’s transportation market, shippers and carriers also have to leverage marketplace intelligence to truly evaluate cost, service, and efficiency metrics.

Shippers and carriers can obtain this type of information from a variety of sources, such as data companies that pool static data together and share it with a consortium of companies, as well as public and government agencies that provide information about fuel prices, driver wages, driver employment figures, economic outlooks, and other relevant statistics.

And as Adrian Gonzalez commented in a recent posting, users of software-as-a-service TMS, both shippers and carriers, can also get access to market-level data because of the millions of transportation transactions that are executed annually through a single-instance, multi-tenant operating platform.

Obtaining the data, however, is just the beginning. The key is to know what to do with the data and how to use it effectively within your operations. The first step is to define the business metrics and determine what factors affect your supply chain the most, which can be difficult for some companies. From there, it is important to understand what the data is telling you and how it applies to your key performance metrics. Then it comes down to who or what you are measuring yourself against. The final step is to convert that data-driven market intelligence into strategic, tactical, and operational planning processes. That is how you will ultimately drive cost out of your supply chain, by making better and smarter decisions at all levels.

In conclusion, we need to work smarter as supply chain professionals. Our organizations expect us to take costs out of our supply chains without negatively impacting service. Tomorrow’s leaders will be those companies that leverage both technology and data-driven market intelligence to achieve a higher level of cost savings and process efficiencies.

Chris Timmer is the Senior Vice President Business Development, Strategy and Marketing at LeanLogistics. Chris is responsible for overall strategy, positioning and growth of the LeanLogistics solution. Chris has over 20 years of experience in transportation and logistics management. He regularly speaks at industry events and has been recognized as a leader in the software-as-a-service (SaaS) solution space. Prior to joining LeanLogistics, Chris held multiple positions with Third-Party Logistics companies, from transportation operations to Supply Chain Management, where he developed solutions for clients in the food products industry.

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