Logistics Viewpoints

A complete analysis of logistics trends, technologies, and services

Guest Commentary: Portrait of a Next-Generation Transportation Management Solution

Guest Commentary | By •

Freight payment, freight audit, sourcing and order management — these are just a few of the standard tactical components that customers require to execute basic transportation management solutions. But with a tough business climate expected to be challenging far into the future, a competitive transportation management solution must go beyond the basics. Fuel costs are rising, legislative and regulatory impacts continue, rates are increasing and the driver shortage is reaching crisis levels. It’s imperative that the transportation moves that customers and shippers make reflect the most optimal way to move inventory and maximize the capacity of the truck and the driver.

Customers looking to increase their competitive advantage amid this landscape can choose to partner with a logistics provider to help them execute transportation services with a systemic view, combining people, processes and technology to drive out waste and ensure continuous improvement. The end goal is to design a smarter network that leverages best-in-class execution systems that enable sound Lean business processes. It’s not about simply staying in the game, it’s about achieving sustainable success.

Rate management and consolidation were once the go-to initiatives implemented by logistics providers to create competitive advantage for transportation management customers. Innovative providers, however, will tie the tactical management piece — from sourcing to settlement — to solution engineering. The goal is to determine where optimal nodes should be placed, how to accelerate cycle and delivery times and how to move customers’ inventory faster through the transportation services. Providers’ solutions will also incorporate advanced transportation management technology, which includes front-end, web-based solutions, software applications for projects ranging from shipment and network planning to business intelligence, analysis and modeling, as well as strong data quality management.

Through this approach, Lean principles and tools are applied to discover, define, design and measure solutions to eliminate waste and excess cost, introduce new efficiencies and build in continuous improvement. Combined with state-of-the-art technology and expert personnel, customers gain a clearer picture of the current state of their transportation networks. Lean tools like value stream mapping clearly depict the physical flow of products, information and finances through the supply chain. This exercise reveals areas where waste exists and leads to Kaizen events, or targeted efforts to improve the process for greater efficiencies. With a defined roadmap and a detailed project plan, logistics providers can design, simulate and optimize alternative operating models and transportation networks.

Static transportation management solutions cannot drive value over the long term. The key, then, is to determine if a customer’s transportation network is working, make adjustments along the way if it’s not and focus on driving continuous improvements and cost savings. With Lean, this process is repeated over and over again to ensure customers’ networks adapt quickly to change. Customers benefit from optimal inventory positioning, while the end customer enjoys the products they want, when and where they want them.

Value creation forms the foundation of the latest in transportation management. Lean’s ‘Voice of the Customer’ is at the center helping to derive what a higher level of service looks like — one that delivers more savings to the customer while connecting it to a more optimal way to execute sourcing to settlement. Customers want to reduce costs and mitigate risk. They want continuous improvement and transparency.

In summary, customers requiring improved transportation efficiency and reduced overall transportation operating costs both now and in the future should consider transportation services that:

  • include a more robust and broader transportation management offering utilizing expanded IT tools and employing extensive Lean management processes and proven operational best practices
  • leverage the proven skills and expertise of organizations with extensive transportation management and Lean operating experience
  • offer network analysis and solution engineering either coupled with or separate from full capabilities for end-to-end tactical transportation operations management and execution
  • can be deployed on a regional or global basis
  • can be implemented for individual, discrete transportation management functions or a combination of more comprehensive functions in a customer-designed solution
  • can incorporate single or multiple modes of transportation services
  • instill a repeatable, standard framework for continuous process improvement and optimization of transportation networks

Customers and shippers are feeling the pressure to cut transportation operating costs without negatively impacting service. To help customers reach this goal, logistics service providers will need to keep up with customer needs, and anticipate those down the road. They will also need to listen to their customers, employ the right talent, have a deep bench of Lean expertise and leverage the best transportation management technology to bring it all together.

Anthony Oliverio is vice president, supply chain services for Menlo Worldwide Logistics. In this role he leads the company’s global Lean strategy, sustainability program and development of business intelligence and standardized business process initiatives with customers. He also is the executive leader for Menlo Transportation Services. He joined Menlo in 1999 and has over 20 years of supply chain experience, having previously worked for FedEx Supply Chain Services and Nordstrom, Inc.

Guest Commentary: Four Critical Elements for Excellence in Supply Chain Execution

Guest Commentary | By •

Our clients in industries such as automotive, aerospace, hi-tech, retail and consumer goods are emerging from one of our nation’s most trying economic times. Faced with serious pressures to cut costs and boost profits, many companies have re-examined how they source, store and deliver their products. Flexibility, innovation and the ability to operate with virtually no margin of error have become requirements when it comes to logistics outsourcing.

A company’s ability to respond to change, to be nimble and innovative, depends on its ability to execute at the highest levels. Here are some of the elements of good supply chain management that must come together to achieve exceptional execution:

Proven template: Firms that are undertaking a significant change to their logistics network are most often successful if they have a model to follow. This model becomes a pattern for a standard, replicable solution set that can be applied across different areas of the supply chain. This is not to say that all supply chains should be approached with a ‘cookie cutter’ model. Rather, a standard solution set comprised of best practices becomes foundational and can then be customized to meet each specific logistics engagement undertaken. In the absence of a proven model, it can be difficult to know what best practices or methods will breed success.

Deep Expertise: Today’s complex supply chains require applied knowledge not only in their inner workings, but also with big-picture insight of the impact that changes made in one area of the supply chain will have across the network. Great execution requires functional expertise in distribution management, transportation management, cross-docking and network design; it also requires industry expertise in the unique aspects of customer requirements, drivers of profitability, challenges and trends for a particular industry segment. Functional and industry-specific knowledge allow companies to better synchronize supply and demand to achieve the optimal flow of goods across the network.

Lean principles: Applying lean processes is key to delivering long-term value and consistent performance. In a lean culture, logistics teams are empowered to identify and eliminate waste in every process that occurs as an order is fulfilled. Lean tools, such as visual cues, problem solving jackets, and root cause analysis, result in shortened lead times, built-in quality and continuous improvement – ultimately increasing speed to market.

Continuous improvement: We’ve found that ongoing, incremental improvements – both small and large in scope – add up to a significant edge. An important tool for continuous improvement is Value Stream Mapping. Value Stream Maps are created for many aspects of the supply chain such as detailed workflow management, warehouse productivity, route optimization and, on a larger scale, total landed costs. They combine engineering talent with practical operational knowledge to find the best opportunities for change and continuous improvement.

Here’s a recent example of these principles at work in our multi-client operations: A few months ago, we assembled a team of hourly employees at our packaging facility in Athens, Georgia. The team was tasked to evaluate and reduce the time it takes to changeover one of the facility’s packaging lines in order to achieve more frequent and variable runs of our clients’ products. Using a lean tool called a Problem Solving Jacket, the team was able to identify areas to improve, make changes, test the changes, measure the time savings, make more changes, and test the next round of changes and so on. Ultimately, this team reduced the process time for the changeover from 140 minutes to 27 minutes! As this example illustrates, empowering  employees to eliminate waste from processes they know and participate in every day can dramatically impact productivity.

In conclusion, by achieving the right combination of proven templates, deep expertise, lean principles, and continuous improvement, your supply chain will ultimately get products to market faster, improve efficiencies, reduce costs, open new markets and enhance customer satisfaction. That’s why when it comes to logistics, execution is everything.

John H. Williford is President, Global Supply Chain Solutions for Ryder System, Inc. As a member of Ryder’s Executive Leadership Team, he is responsible for management, operations, sales and marketing, and the financial performance of Ryder’s Supply Chain Solutions and Dedicated Contract Carriage business segments.

Copyright © 2020 Logistics Viewpoints, ARC Advisory Group. All rights reserved • Design by

Archives