Five Ways Data Is Transforming the Supply Chain

FourKitesSix years ago, I founded FourKites with a very focused mission: To leverage technology to provide the world’s biggest shippers and 3PLs with visibility into their freight in transit. That might sound simple in theory; after all, we can all check our Amazon packages in transit with the click of a button. So why can’t the world’s largest shippers and carriers do the same thing?

I don’t mean to be trite, but…it’s complicated. The supply chain is immense, comprising tens of thousands of companies dispersed across the globe, speaking different languages, complying with varying regulations, and wrestling with unique challenges. And supply chains have been highly dependent upon manual processes for the entirety of their existence. In the US alone, there are an estimated half a million trucking companies on the roadways, a multitude of retailers and tons of new – and often siloed and incompatible – technologies vying to find a place.

The result? Vast blind spots throughout the supply chain. Shippers, carriers and brokers alike can all relate to the “Where’s my truck?” battle cry, which served as shorthand for the countless hours that shippers, brokers, carriers and truckers spent tying up phone lines trying to figure out where any given shipment was and when it would arrive at its destination.

That’s the problem we at FourKites set out to solve. Six years in, we’ve brought real-time freight visibility to more than 380 of the world’s leading shippers and to thousands of their broker and carrier partners – shedding some much-needed light where so many had previously worked in the dark. Along the way, one thing became readily apparent and has been reinforced time and time again: Real-time data is the foundation for supply chain transformation. Here are the top-5 reasons data has become so instrumental.

Nothing breaks down silos like data. From a technology perspective, the typical enterprise in the supply chain is a collection of silos. The logistics systems don’t talk to the warehousing systems. The warehousing systems don’t talk to the customer service systems. The customer service systems don’t talk to the customers themselves! It’s no wonder the common telephone has become the lowest common denominator for a supply chain desperately trying to find out the location and status of freight in transit.

Where’s my truck?! Over and over and over.

But inject real-time data into the enterprise – data that can be shared with every department in the organization – and the walls rapidly come down. Finally, everyone can see the current situation. Work shifts from frantic efforts at discovery to problem-solving. Customer service proactively alerts customers as to shipment status. Warehousing optimizes dock crews based on new ETAs. Logistics shifts from fighting fires to higher-value customer service needs. Data gets the organization aligned and rowing in the same direction.

Data necessitates a new, better playbook. For so long, the supply chain had no choice but to do things manually. Take this common example: Customer service gets a “Where’s my truck call” from a shipper. The customer service team – lacking any automated, real-time information – has to jump through hoops to figure out what’s going on. Multiple calls and emails commence between the customer, internal departments and suppliers. Manual, reactive, time-consuming processes are employed to try to diffuse the situation.

Real-time data changes all of that. But it also necessitates a new playbook to help employees learn how to shift from problem-solving, to problem avoidance, to proactive customer service. Armed with real-time data, for example, customer service teams now have the opportunity to delight customers with proactive communications about changes in ETAs. Standard operating procedures and training need to evolve to help ensure employees learn to interpret and act on real-time data, to the benefit of customers and the business alike.

Data begets trust; trust begets collaboration. Without real-time data, everyone is trying to figure out which way is up. We can all agree the shipment is late, but where is it? A truck sits waiting for an open dock for two hours, but was it the carrier’s fault for running late (or early), or was the distribution center behind schedule due to their own operational issues? Without a real-world view based on common data, disputes run rampant.

Conversely, with a solid foundation of common data, trust can blossom between supply chain partners. Real-time data enables partners to identify root causes and shift the conversation from finding fault to finding solutions.

And when you start to build trust, real collaboration begins. Some companies are understandably reticent to share their data with others in the network. But with the right privacy and security protocols in place, the benefits of sharing data become readily apparent. Consider a CPG company shipping ketchup to a grocery store. Whether the ketchup supplier is sending a truck out to the store, or the store is sending a truck to get the goods, it’s in everyone’s interest to share real-time freight data. That’s the key to mitigating the impact of delayed shipments or getting more out of existing assets; whether via re-scheduling dock times, identifying alternate pickup or dropoff, points or identifying and taking advantage of unused capacity.

“Neutral data” is paramount. We’ve established that real-time data is the foundation for trust between supply chain partners. And so it follows that the data – and the data supplier – that underpins any network should be agnostic. By this I mean that the vendor should be able to pull data from any of the many systems common to the supply chain, from transportation management systems to warehousing systems to ERP packages and more. And the vendor should be able to present the data back to the network without bias or hidden agendas that give one party undue advantage over another. Accurate, reliable data – from an independent vendor whose sole focus is data – is critical to fostering the requisite trust and collaboration that yield results.

Data enables scale. Real-time data is key to efficiently scaling both individual businesses and the supply chain at large. With real-time data, employees are more empowered and more productive. Potential problems can be anticipated and converted into customer service opportunities. Inefficiencies can be more readily identified and remedied.

It’s my observation that the opportunities for collaboration multiply exponentially with more and better data, and pervasive data sharing across the network. I talk often of “network effects” – which describes how the value of any network grows as the number of participants increases. More supply chain companies sharing more real-time data create richer opportunities for benchmarking, analysis, insights and collaboration to drive business benefits for all.

The starting point to transformation is data. Are you using data effectively within your own business, and with your own supply chain partners? I encourage you to look into it – the results can be, quite literally, eye opening.

Matt Elenjickal is the Founder and Chief Executive Officer of FourKites. He founded FourKites in 2014 after recognizing pain points in the logistics industry and designing elegant and effective systems to address them. Prior to founding FourKites, Matt spent 7 years in the enterprise software space working for market leaders such as Oracle Corp and i2 Technologies/JDA Software Group. Matt has led high-impact teams that implemented logistics strategies and systems at P&G, Nestle, Kraft, Anheuser-Busch Inbev, Tyco, Argos and Nokia across North America, Western Europe and Latin America. Matt is passionate about logistics and supply chain management and has a keen sense for how technology can disrupt traditional silo-based planning and execution. Matt holds a BS in Mechanical Engineering from College of Engineering, Guindy, an MS in Industrial Engineering and Management Science from Northwestern University, and an MBA from Northwestern’s Kellogg School of Management. He lives in Chicago.

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