Too many larger transportation projects fail to deliver value over time or end up being scrapped because there was inadequate investment in a long-term post-go-live support and growth strategy. The most successful enterprise-wide transportation management programs don’t stop with the successful rollout of the system. Instead, they go on indefinitely, delivering more business value over time. To sustain and grow their transportation management success, companies need to implement a competency center. This post summarizes the best practices, roles and structure that leading companies put into their transportation management competency centers.
Transportation Management Competency Center Definition
A transportation management competency center is responsible for ensuring that the transportation management strategies, processes, resource capabilities and systems are properly maintained to deliver the value defined in the business plan. In addition, the competency center is chartered with continuous improvement of the transportation strategies, processes and systems to enhance the value delivered to the business or to support changes in business practices. The role of the competency center is not focused on day-to-day execution activities but, rather, will have closer interaction with the transportation planning and coordination operations if they are centralized.
To keep transportation management operations at peak performance and set the direction for future improvements, the competency center must be responsible for five areas:
- End/super user training. The value that the system delivers is only as good as the capability of the people using it. It is critical to ensure that the organization is competent and that processes are followed consistently. In addition, there will be always be resource turnover and it needs to be anticipated. The competency center should build the training program to get new transportation system users productive, following defined practices and fully exploiting the existing capabilities of the system. New users should go through vigorous training and testing directed by the competency center to ensure that they can be as proficient as the initial users.
- Continuous improvement/business modelling. Even the most successful transportation management systems can deliver more value beyond the initial implementation. The opportunities are always present as businesses are constantly changing, evaluating new strategies and learning more about their transportation management strategies, processes and system. The competency center should have specific activities focused on improving the productivity/service of existing operations by evaluating unused and new capabilities of the transportation management system. Modern transportation systems provide the ability to create multiple modelling scenarios to make those evaluations much easier by providing not only the potential business value, but the operational impact as well. Evaluating the feasibility and value of new business models and major operational changes should be one of the key roles of the competency center.
- Change management. It is one of the most essential elements of successful implementations, major upgrades or changes in transportation strategies. Change management goes beyond use-based training to educate end/super users on the value of new processes and systems, and on how to leverage available data and reporting tools to manage day-to-day operational challenges and take advantage of new features. The competency center should be able to create business-level education and scenario based-training to demonstrate the business value of an upcoming change and how users can take advantage of the capabilities to make their jobs more productive and satisfying.
- Reporting. It is critical to long-term transportation management to be able to communicate to management and operations the transportation performance and value delivered, as well as to identify areas that need to be improved. The competency center should develop and get agreement on a common version of metrics, their importance and reporting strategies. The reporting should be divided into actionable and performance reporting. Actionable reporting should highlight issues that need to be addressed immediately to keep transportation performance on track. Performance reporting should take a longer-term view to identify trends and areas of improvement. The competency center should also be responsible for determining who beyond transportation should be leveraging transportation system information and promoting the value to those departments and trading partners.
- System upgrade planning. One of the reasons to use commercially available software is to take advantage of the enhanced capabilities and new modules that are available in future releases. Major upgrades can deliver a lot of value but take significant coordination and effort. The competency center should work with the vendor, operations team and IT to plan and execute the upgrade. Determining timing of the upgrade for the most beneficial release is an important role for the competency center so as not to create churn for the organization or fall too far behind. Finally, the competency center needs to coordinate staging and testing with operations and IT to ensure a smooth upgrade and help ensure that the planned capabilities and performance improvements are realized.
Competency Center Organization
The competency center should be a training ground for top performers on the business and IT side. The goal is to get the best and brightest to want to be part of the competency center as part of their career progression. A well-run competency center will generate the greatest long-term transportation performance improvements and be critical to faster and more seamless adoption of new transportation business models and technology. The competency center can be anchored by career transportation experts, but they need to be the ones that embrace and foster change.
Many leading logistics organizations are centralizing their planning and coordination of transportation to lower costs and improve planning effectiveness. For those that do centralize, it makes sense to incorporate the competency center into the central planning organization. The close coupling makes the work of the competency center more effective. Even more importantly, however, competency center work should be shared with the operational planning team. Well-run planning teams are not busy with operations work all day and have time to perform some of the continuous improvement and new scenario planning. These resources also benefit from learning more about the system and new strategies and processes, which helps them become even better planners.
The competency center needs to balance domain and technology expertise to get the most out of the transportation management system. The following roles are essential to creating an effective competency center:
Reports to head of transportation/logistics/supply chain. It should be someone who is viewed as a pragmatic visionary, able to establish a vision and action plan, communicate effectively and influence transportation operations.
Resources with deep knowledge in transportation operations, knowledge of the systems deployed and ability to break down problems/opportunities in ways that can be understood by the rest of the organization. These experts should provide a bridge between the current environment and new ones and establish required processes and practices to get there.
IT Process experts
Business technical experts with knowledge of the flow of information, optimization technology, data analysis and reporting to help users leverage the capabilities and data within the system. These resources will also coordinate the efforts of the core IT organization or vendor if the system is cloud-based.
The transportation management competency center is an important part of the strategy to successfully implement, sustain and grow the value of a transportation management system. Rather than looking at it as incremental cost, logistics organizations need to understand it as an asset that will more than pay for itself. What has your company done to create a transportation management competency center? Let me know.
As Executive Vice President, Marketing and Services, Chris Jones (CJones@descartes.com) is primarily responsible for Descartes marketing activities and implementation of Descartes’ solutions. Chris has over 30 years of experience in the supply chain market, including the last 10 years as a part of the Descartes leadership team. Prior to Descartes, he has held a variety of senior management positions in other organizations including: Senior Vice President at The Aberdeen Group’s Value Chain Research division, Executive Vice President of Marketing and Corporate Development for SynQuest and Vice President and Research Director for Enterprise Resource Planning Solutions at The Gartner Group and Associate Director Operations & Technology for Kraft Foods.