Steve Martin, VP of Automotive, Ryder System, Inc. [NYSE:R]
Affordable technology’s moving at warp speed, putting immense pressure on businesses across all industries to keep up. It’s a matter of choosing to step onto the playing field to tackle the competition in spite of the bumps and bruises you might sustain along the way. Sitting it out on the sidelines and watching everyone else play is not a viable option—unless you’re willing to get smoked by the competition.
Sophisticated technology is just one of the many disruptive forces that are threatening to change the rules of the game for the supply chain and logistics industry over the next decade. Whether it’s the consumer packaged goods, retail, technology, or automotive industry, executives are being pushed to re-evaluate their operations due to these challenges. Industry analysts believe it’s the proactive companies that adapt in order to beat these disruptions that will come out ahead in the end.
The “Now Economy”
In the age of the “now economy,” consumers want their products immediately. This has created complexities for supply chains while also affecting the transportation industry. In order to meet customer expectations, supply chains require a transportation network that is perfectly integrated with their operation. This shift in consumer expectations, backed by a growing number of do-it-yourselfers going straight to the source, is pushing supply chains to process orders faster and in smaller quantities. In addition to the “now economy,” ecommerce and the Internet of Things (IoT) are driving the desire for more multi-client solutions and smaller distribution networks. All if this translates to shorter lead-times with a heightened necessity for on-time deliveries—all while ensuring safety mandates and KPIs are being met. In this kind of supply chain environment, a focus on operational excellence becomes more critical and valuable than ever before.
There’s one thing that’s sticking: the desire for greater transparency and data analytics that drive business insights
Real-Time Visibility and Data Analytics
As consumer demands continue to evolve, there’s one thing that’s sticking: the desire for greater transparency and data analytics that drive business insights. A cost effective tool that can swiftly turn big data into actionable information can help achieve this. The ideal system will capture data through new and flexible technologies and make useful data rapidly available to both customers and stakeholders. It provides a clear view of inventory and supply chain activity, and ultimately, it helps create responsive supply chains.
Customers are also looking for more customization. A Ryder automotive customer, for example, recently asked us to help them develop a portal that would enable them to customize their own dashboards and reports. This supports the concept that by controlling your data, you control your destiny.
It’s important to remain in constant communication with customers and to both actively listen and respond to their feedback. Voice of the customer programs are a great way of accomplishing this. They afford you the opportunity to gain consumer trust by delivering on what you say you will. By managing expectations and engagement, you’re able to collaborate both inwardly and outwardly. Our team focuses on identifying potential new solutions based on deep customer knowledge and industry expertise, and works with our centralized product development team to speed those products to market. One of these is our new, innovative visibility tool that provides real-time access to product location and status. This new cloud-based platform exposes excess capacity, leverages peer networks, and develops/outsources the right enablers, while providing a flexible and enhanced customer experience that extends beyond in-transit visibility to include inventory, assets, and people.
These new consumer demands are expected to stretch the capabilities of supply chains and operational constraints that will reshape the landscape. And while it’s creating greater complexity, it is also driving innovation.
Regulatory compliance continues to play a disruptive force in the supply chain. For example, the electronic logging device mandate, which will take full effect on December 18, 2017, is pushing owner operators to reconsider the way they do business. While the mandate will ensure Hours of Service (HOS) compliance and safer driving behavior by replacing paper logs with more precise, reliable electronic ones, it is expected to cause a great deal of disruption from a financial and time standpoint. In fact, getting electronic logging devices into more than three million trucks by the December deadline is projected to cost trucking operators more than $1 billion according to the Journal of Commerce. Training truck drivers to use the technology could take months and lead to a decline in productivity. For this reason, it’s important for the financial decision makers at any company, big or small, to be aware of new and changing regulations such as this, as they have a real potential to impact business.
The electronic logging device mandate also has shippers on high alert. If a driver is placed out of service by law enforcement for violating the rule, then the shipper is at high risk for stranded/late shipments. Or, in the case of an accident lawsuit, if they had chosen to work with a non-compliant trucking company to move freight, they would be held liable.
Why Outsourcing Makes Sense
Many variables continue to apply pressure on logistics managers and fleet managers alike. The disruptors I’ve mentioned are just a few among many others, including the driver shortage, globalization, and the rising cost to ship goods to customers. These market forces are pushing more and more companies to outsource their supply chain and logistics functions to a trusted 3PL provider. This way, they can rely on a trusted partner for flexibility, visibility, and cost savings. They can take advantage of a variety of services that meet their needs, such as IT engineering, solution design and engineering, program management, and continuous improvement. An effective 3PL provider can seamlessly handle driver recruiting, training, and retention, as well as drive differentiation and value through investments in technology.
There’s never been a better time to leverage supply chains as a competitive advantage, but you’ll need to climb down from the bleachers and get on the field to enter the game.