Commentary | Supply Chain Perspectives

Optimizing Freight Rail Supply Chain Visibility

Tags: Software-as-a-Service (SaaS), Rail, Intermodal, Visibility

Chuck Hieronymi is Director, Commercial Group, Railinc, 919-651-5045

Freight rail has become an integral part of many global supply chains, driving the need for complete visibility across modes and giving rise to a new suite of technologies. Shippers, third-party logistics service providers, and railcar owners and lessors who have the knowledge to make effective use of these technologies gain an advantage.

For example, with more accurate and more complete data, railcar and intermodal shippers can better plan car deployments and track when cars are somewhere other than where they should be. The result can be improved productivity and enhanced customer service.

These improvements have real-world implications where “the cereal meets the bowl.” For that simple action to occur in your kitchen, a complex chain of events must be precisely executed. First, farmers need to get supplies to grow grain and ship them for milling. Paper pulp is processed to make the box, and plastic for the inner wrapper. Those components are shipped to a cereal-production facility from where the filled cereal boxes are shipped via multiple modes to one or more warehouses—and finally to the store where you shop.

Given that consumer demand is extremely dynamic, freight rail is in a constantly evolving environment where yesterday’s accomplishments quickly lose relevance. The good news is there are now many ways to improve railcar and intermodal shipment tracking, including:

New technology solutions—More providers of all sizes and segments—such as Oracle and MercuryGate—are developing rail technology tools that integrate applications and data, and are accessible via the cloud.

Greater access to information—Deeper visibility into the supply network is made possible by Data-as-a-Service (DaaS) and Software-as-a-Service (SaaS) solutions, which reduce or eliminate the need to spend time and money with complex integrations. Companies—even those with smaller IT footprints—now have access to powerful technology tools that help optimize operations. Larger companies can access systems and leverage data across the enterprise.

Sharpened management focus—The climate has transformed from linear supply-chain thinking to supply-network thinking. These networks of data, apps, and infrastructure can be employed to shorten shipment cycles, improve efficiency, plus reduce errors and/or surprises.

Improved data and visibility—With better information comes significant benefits such as more predictable ETAs, reduced dwell times, faster equipment turns, and the potential to reduce high-cost equipment purchases.

Because supply networks are constantly changing, businesses need to develop processes that continuously optimize their transportation alternatives. Railcar shippers have told us that—from an operations standpoint—the biggest challenge can be accessing vital information on their large and geographically dispersed fleets. Companies that leverage high-quality, complete data can realize greater productivity.

In addition, a flexible, evolving technical infrastructure allows improved utilization of people, processes, and technologies across more complex organizations and supply networks.

Wondering where to start? Here are four things you can do now:

  1. Revisit and validate your data sources to be sure you are receiving the most timely and complete data.
  2. Optimize your supply network across modes, and make sure you include rail in your mix. If you don't consider rail, you might be leaving money on the table.
  3. Incorporate cloud-based solutions that allow you to utilize the most up-to-date data and applications in support of big data and predictive analytics initiatives.
  4. Take the long view, with a strategy for continuous improvement to evolve and renew your infrastructure—from data to applications—along the way. To remain competitive, every company needs an evolving plan that leverages a range of tools from SaaS solutions to ERP systems.

Finally, one of the better opportunities for optimizing business performance is tied to taking your supply chain practices to the next level. This requires that the highest-quality data and complete visibility be maintained across your enterprise. As freight rail has grown in volume, market share, and importance, the industry has kept pace with robust data sources and cloud-based information management offerings and applications—now it’s your turn.

Visit Our Sponsors