Guest Commentary: Can You Blueprint a Logistics Services Operation?

The time was the mid-nineties, and as many aspiring leaders do, I decided to earn an MBA. One class in particular, Service Marketing, left an impression on me. Back then, it was a new and revolutionary course, hot off the presses. It tackled the concept that service marketing is different from product marketing for many different reasons, including the variability of how a service is delivered. I think of that course often.

I am not sure why it stuck with me. Maybe it was because I had grown up with technology and followed my dad’s footsteps in a career focused on it. Or maybe it was because I worked in the transportation industry before grad school. Whatever the reason, I felt the course was on to something. To me, it pointed the way forward.

After earning my degree I joined a logistics company. To make a long story short, I discovered that the notion of what I had learned – creating consistency in a customer’s buying experience – could only be realized to a limited degree. Why? Thinking back, it was both timing and technology.

One of my first assignments at my new job was to lead a project with our IT group to “capture our best sales practices” in a single tool. We custom built what is now known as a sales force automation tool with a little CRM sprinkled in. However, the idea that we could blueprint the operation and deliver on what we promised all within an ‘90s-era technology system was overly optimistic.

Remember, this was almost 20 years ago, a different time in technology. So, the thinking was in the right direction, but the scope and scale were not there, both in our operating models nor in our tools to enable. When I look back at it, it was a concept ahead of its time.

As with any business, success starts and ends with the customer. But that’s easier said than done in the service-intensive transportation industry, where meeting customer demand requires timely, accurate information and precision in service delivery. Fast forward through the years and the “services marketing” ideas of service products, services catalogs, and so on continue to come up. So, this begs the question: Is now the right time? Do we have what it takes to realize this “revolutionary” idea of blueprinting a service company-wide?

Services Blueprint (Source: SAP)

Services Blueprint (Source: SAP)

To meet the demands of transportation and logistics operations, reduce costs, and improve overall asset management, services companies are taking a page from the manufacturing playbook. The first idea is a renewed focus on the customer. Siloed operations that manage contracts, customer orders, pricing, and bill collection in disconnected systems are out. To achieve 360-degree customer visibility, the new approach puts the customer in the middle – defining processes and services that work in an end-to-end fashion with and around the customer. The second approach emphasizes service products – with a goal to minimize disconnects between what the business designs and sells and how it is delivered. Here, the company specifies how it performs tasks based on what has been sold. This helps increase efficiency by minimizing the variance between what is sold and what actually happens operationally.

This is the direction we are going. When you consider a transportation management system with built-in event management, that works with other software solutions, and you couple it with the promise of in-memory and mobility technology, it’s clear that the technology is ready. Are we? Maybe now is the time where technology and revolutionary ideas meet. Something to think about.

Kevin Schock is the Director of Solution Management in the SAP Transportation and Logistics Industry Business Unit, responsible for the global SAP solutions strategy and direction for the transportation and logistics cargo industries. He joined SAP in 2007 as Industry Principal for the transportation and logistics industry North America bringing over 20 years of experience in technology spanning roles in IT sales, logistics services marketing, and application development. Prior to SAP, Kevin worked for BNSF Railway in North America responsible for application development teams and strategic IT projects. Before BNSF, Kevin was head of Marketing for a crew and workforce management software company owned by Union Pacific Corporation. Kevin started his career with IBM and worked on the American Airlines account as well as led the market development department for GTE Supply (Verizon Logistics).