Mastering Logistics Complexity: How to Take Control With Technology
There was a time when road distribution was either local delivery from local producers, or the ‘final mile’ delivery of goods that had been transported longer distances by rail or interstate highway first.
The typical journey was either point to point or a regular circuit of collections and drops. An experienced transport manager, or even the driver, could plan a reasonably efficient set of routes that was achievable and practical.
But the requirements that transport operations face today are much more complex and the expectations of consumers and businesses have evolved beyond recognition.
Delivery schedules need to cope with pick-ups from multiple sources and delivery to multiple destinations. Regulations have been introduced affecting everything from driver hours to environmental performance and restrictions on permitted times for deliveries. And in most areas transport operators are faced with an ever more congested road network.
With these increased levels of complexity, it is no longer feasible to expect even the most skilled and experienced planners to devise effective routes and schedules manually. Instead organizations are looking to technology to help manage the complexities of the transport operation but also to differentiate in the increasingly competitive markets they operate in.
Turning Complexity Into Advantage
All this complexity is not in itself a bad thing. The transport industry has shown and continues to show its ability to embrace complexity and to use methods and technologies to turn complexity into advantage. Examples include:
- 3PLs introducing new ways of managing distribution and new levels of professionalism
- Distribution centers introducing cross-docking and ‘hub and spoke’
- Fleet operators introducing integrated operations combining fleets and movements to minimize fleet sizes, mileage and empty running
Competition in logistics has helped change transport and distribution from a cost center to a source of competitive advantage. Technology is key to this, helping organizations to drive efficiency and save money in the following ways:
- The ability to plan better
- Managing all available resources
- Dealing with legal requirements simply
- Combining choice, convenience and profitability
But What of the Future?
As big cities get more congested, central government and local authorities are keen to identify new ways of cutting down on the number of vehicles converging in these densely populated areas.
For example, in London and Singapore vehicle entry fees have been introduced, while elsewhere authorities are suggesting deliveries should be consolidated. This involves bringing loads into out-of-town centers where they can be combined to make the most efficient use of resources, and the least environmental impact, for example by sharing trailers, regardless of the identities of the shipper and recipient.
There are substantial financial and environmental benefits to be had. Increased drop density yields greater productivity, reduced overall fleet size, reduced overall mileage and less harmful emissions. While the introduction of backloads beyond those of conventional returns, warehouse carts and packaging to the depot could reduce empty running. But it would require partnering commercially, and systemic integration between many partners. Understandably there is some resistance to this.
The Transportation Office of the Future
Transport and logistics operations are inherently complex in order to meet the needs of their customers and end-users. But where until recently this was an obstacle to efficient operation, now there is the ability to turn it to competitive advantage.
It is not only possible to reduce costs and improve the efficiencies of operations, but also cut the time, effort and cost of planning while making it ever more responsive to customer needs. By mastering complexity, companies can achieve the holy grail of reduced cost and improved customer service.
Read our Mastering Logistics Complexity Whitepaper to discover more about how technology can turn complexity into opportunity and the types of benefits that can be expected.