August 2007 | Commentary | Viewpoint

Creating an Agile Transportation Enterprise

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Due to an increasing number of enterprises involved in global logistics, and a growing number of logistics processing points, supply chains have become less agile. In response, manufacturers and retailers are developing demand-driven supply chains, in which suppliers manufacture products in the shortest possible time using the least amount of inventory.

To achieve this goal for their shipper customers, transportation service providers need to improve order visibility in the supply chain, reduce inventories, improve demand response up and down the supply chain, and improve the command and control structure within the enterprise to handle supply chain exceptions.

Multiple Obstacles

Achieving these objectives may be difficult for transportation service providers who, because of growth through acquisitions, now maintain multiple operating processes, multiple IT platforms, and predominantly manual processes.

These legacy platforms are difficult to enhance, and don't always interface with other internal enterprise applications and partner systems, resulting in added costs and waste in the supply chain.

These systems restrict providers' ability to develop the support infrastructure required to serve shipper needs in today's competitive transport marketplace.

To meet these challenges and achieve a streamlined future operational state, logistics providers and carriers must transform themselves into agile transportation enterprises.

They must acquire communications and information systems capable of capturing and processing large amounts of near real-time data to plan and execute their services.

Providers need a flexible operational environment that interfaces smoothly with "edge" devices to monitor orders, shipments, and moving assets.

They should also be able to integrate seamlessly with business gateways that support real-time interfaces with shippers and carriers, and command and control centers that provide visibility to operational and financial exceptions.

Perhaps the hardest part of the journey to becoming an agile enterprise is the transformation. To manage this process effectively, organizations must develop an enterprise transformation plan that encompasses both business and IT transformation.

The business transformation plan is used to manage the process, organizational, and technology changes businesses must make to achieve the global process template.

The IT transformation plan supports the business transformation plan and lays out the initiatives and programs needed to transform applications and IT infrastructure.

Data and Analysis

Real-time data is critical, but the ability to analyze data, identify responses to exceptions, and execute actions with supply chain partners is even more critical.

To do that, enterprises need to develop collaborative platforms that enable them to quickly communicate actions to partners.

Edge computing devices can now be used to capture and forward detailed information about shipment locations, estimated delivery times, resource status, and other supply chain details.

By more efficiently capturing and managing information on every aspect of transport operations—and by making that data easily and instantly available to shippers, suppliers, and partners—providers can pull the world toward their data chain and gain a keen advantage over competitors.

Another step in establishing an agile transportation enterprise is creating a stable, integrated, and flexible technology, applications, and business process infrastructure.

This agile enterprise platform is based on an applications and technology infrastructure using Service-Oriented Architecture (SOA), which combines best-of-breed applications development, methods, and tools; business insight; systems integration expertise; and composite solutions to deliver a proven, leveraged environment for transportation providers.

Transportation service providers can leverage the agile enterprise approach to achieve true end-to-end supply chain capabilities for their customers. Agility translates directly into a faster, more competitive transportation organization capable of responding effectively to customer needs and market changes.

The agile enterprise enables transportation providers to align their IT services more closely to their underlying business goals. It also provides a flexible yet stable infrastructure capable of anticipating and responding to a dynamic transportation environment.

This approach enables transportation companies to address compressed product life cycles and the challenges caused by international shipping congestion.

In fact, organizations in virtually any segment of the transportation sector can leverage these strategies to provide superior, accountable service and delivery performance.

Today's transportation industry is faster, and more global and competitive than ever before. Shippers increasingly seek out transportation providers who can do more than just deliver efficient service at a competitive cost—they now demand supply chains that are responsive, visible, and intelligent.

To compete in this environment, transportation service providers must retool their organizations to be flexible and transparent. They need a comprehensive, transformational approach that links IT to business objectives, automates operations, accelerates the supply chain, and streamlines their business.

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