April 2022 | Commentary | IT Matters: Logistics & Supply Chain Technology

Digital Transformation: The Experience is King

Tags: Logistics I.T., Transportation Management Systems (TMS), Demand Planning, Big Data, Fulfillment

Tim Motter, VP of Transportation Solutions, SAP, 800-872-1727

Over the holidays, my wife and I decided to give ourselves the gift of a new couch. Because I work in transportation and logistics, I knew that constraints up and down the supply chain easily could result in a long delivery lead time. So it was a pleasant surprise when the home furnishings company said to expect the couch in about three weeks.

Soon after that, the company's warehouse dispatch contacted us to provide a specific day and two-hour window for when to expect delivery from the local transport provider. When a text message arrived on delivery day morning, inviting me to track the couch's movements in real time, I clicked on the link. That's when things turned murky.

"Delivery canceled" read the message posted on the delivery app, with a phone number to call for more details. When I called the number and got a warehouse person on the line, she told me that not only had the couch not made it onto a delivery truck that day, but that there was no information about its whereabouts.

My two-piece sectional had gone AWOL. Because of an apparent lack of visibility and communication between the home furnishing company's warehouse and its contract transportation logistics company—along with likely staff shortages due to the holidays, illness, and employee attrition—no one could say exactly where it was, why it had been delayed, or when delivery could be rescheduled.

As frustratingly commonplace as situations like these have become in the past few years, this one hit close to home. It got me thinking about some impactful steps that key links in the supply chain can take—beyond obvious ones like throwing more people and/or better compensation at the problem—in the back office to minimize disruption and preserve what must be among their highest priorities: a high-quality customer experience.

Here, based on extensive experience working with logistics and transportation organizations up and down the supply chain, are some of the systems and strategies that are helping them to operate and work more intelligently and efficiently in four critical back-office areas, and in the process, better insulate themselves and their customers from disruption.

1. Human resources. Labor shortages are to blame for many of the disruptions like the one I experienced with my couch delivery. The problem is particularly acute in the world of trucking, which accounts for about 70% of cargo shipments in the United States.

As the Great Resignation is demonstrating, people value their work experience more than ever, and companies that provide a superior employee experience will have a leg up in avoiding disruption and meeting customer expectations.

HR and payroll can help in that regard. They could, for example, give drivers more insight into their routes and resulting compensation—with mobile access to that information—and differentiate themselves with new pay practices that better compensate drivers for their time.

Meanwhile, using experience management (XM) tools that link front-line employees to the back office, a company can gather in-the-moment worker feedback, analyze that feedback and mobilize to shape the employee experience accordingly. Companies such as Purolator are seeing substantial gains in employee engagement, along with other benefits, from using XM tools.

2. Finance. Today's generation of integrated digital platforms for managing financials and accounting provides a viable—and in many cases, much-needed—alternative to the notoriously siloed, disjointed, manually intensive systems on which many organizations have relied.

By incorporating artificial intelligence (AI), machine learning (ML), and advanced automation capabilities, these platforms can execute and manage a huge range of processes and tasks that otherwise would require manual intervention across multiple systems, and do so much more quickly and efficiently than those multiple systems could.

Many high-volume transportation and logistics organizations are shifting to these integrated platforms for pricing, order management, billing and collections, invoice processing, receivables and payables management, fees and commissions, demurrage, re-rating, and reporting.

One big advantage with these systems is their ability to manage thousands of highly complex contracts, with all the unique terms, conditions, tariff requirements, and other conditions they may bring. They can automate many previously labor-intensive manual processes and rapidly collect, analyze, update, and provide insight into huge volumes of data and records from disparate sources and systems.

The result: fewer disputes and faster reconciliation, settlement and collections with customers, partners, vendors and the like, which not only makes the supply chain run more efficiently, it also helps companies recognize revenue faster.

And, as complicated as many supply chain ecosystems have become, an integrated finance platform can bring simplicity, process automation, standardization, and clarity to areas of finance and accounting where they are needed most.

3. Asset management. More efficiently and intelligently managing assets is another way transportation and logistics companies can add resilience and preserve the quality of their customer experience.

By integrating real-time onboard and trackside monitoring data from multiple tracking systems with sophisticated tools like digital twin, companies such as Swiss Railways are replacing costly, disruption-prone run-to-failure maintenance strategies with a proactive maintenance approach across the entire rolling fleet. They use real-time data and AI- and ML-powered tools to strengthen planning, improve failure discovery, identify issues before they escalate, speed up maintenance work and ultimately reduce disruption to its fleet.

With the help of AI and ML technologies, companies across the transportation and logistics landscape—rail, trucking, shipping—now have the ability to remotely inspect and analyze the condition of equipment, then identify and address potential issues.

Say, for example, a rail company could use connected remote cameras to inspect its rolling fleet. An AI-powered app such as Cogniac could analyze the video to quickly identify an issue with one freight car's wheelset, then notify the appropriate maintenance team to address the issue.

4. Supply chain. If only the company that sold me my couch had an integrated track-and-trace system, one that could monitor a product's journey from factory to warehouse to order fulfillment with geolocation capability and full visibility into logistics service providers and carrier networks.

Evidently the home furnishing company's track-and-trace capabilities don't quite reach far enough, because as I write this, they still can't tell me where my couch is and when it might be delivered.

One thing I can say with certainty, though, is that whenever that furniture truck finally arrives, I'll do my part to boost employee satisfaction by tipping the delivery people generously.






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