Working together to drive efficiency

Working together to drive efficiency

Vice President Sales | Descartes

The headline news for 2017 might be positive; but there are always winners and losers in any economy and right now it is transport operators that are under pressure. As the Marmite fracas revealed last summer, retailers are unwilling to accept additional transport costs associated with the fall in sterling – and are pushing back on transport companies. Add in driver shortages, emissions charges, escalating security concerns, rising congestion and penalties for missed delivery slots: life in the logistics business is not looking quite as rosy as the overall economy might suggest. Doing more with less is fast becoming a mantra – but given the efficiencies that most organisations have already attained, just where is the additional performance going to be found? The answer is in embracing a more collaborative approach. 

The economy may be on the up but the downsides of increasing demand for goods across many sectors are becoming very apparent. Road congestion is a given, with the UK recently named the most congested country in Europe, according to the Inrix Global Traffic Scorecard. But time wasted in traffic is not the only outcome of this congestion, with rising concerns around air quality raising the threat of higher emissions charges. At the same time, increased security around major cities, airports and out of town shopping centres is adding a significant logistical demand, which in turn is currently causing problems and delays that leave vehicles idling, further raising emissions. For transport operators already struggling with the hike in fuel costs and struggle to recruit drivers, these additional delays and costs risk eradicating already thin profit margins.

Having already looked to streamline operations by embracing paperless working, real time information and route optimisation, transport operators may be questioning just where they can squeeze additional efficiency.  The answer lies in building stronger links between different supply chain components.

The disconnect within transport network optimisation is a prime example. To date it has simply been too difficult to bring together optimisation models that work across the entire supply chain, from initial collection from manufacturer or distributor all the way through hubs and cross docks through to the retailers and last mile home delivery to the consumer. The inability to reconcile the transport management planning, visibility of goods in the supply chain and route optimisation - has left organisations unable to optimise stock and the entire journey, resulting in an inefficient use of resources.

The potential benefits in efficiency and cost savings, therefore, of creating end to end visibility from initial pick up through distribution centres, hubs and cross tracks to the last mile are clear.  Leveraging real time information and real time demand, advanced route optimisation across a wide variety of planning scenarios - from territories and master routes through to extremely dynamic routing environments - can transform performance. In addition to improving the way in which resources are deployed, better visibility can support more efficient and dynamic use of third party carriers and subcontractors.

Hub location

Of course, organising an optimal journey is one thing; ensuring the delivery process goes smoothly is another, especially in areas of high congestion and high security. Key hubs such as airports, large shopping centres and commercial districts such as the City of London, create significant difficulties for any transport operator. Heightened security concerns are prompting growing numbers of operators to consider new controls over delivery and collection – insisting on the use of identification tokens, for example, and pre-booked delivery appointments.  The benefits of such an approach are not limited to improving security; optimising deliveries via pre-booked appointments enables far better congestion management, reducing travel and wait time (and hence emissions) for transport operators.

This is a system that cannot be imposed on any one aspect of the supply chain. To work it needs buy in and commitment from all community stakeholders – namely the hub owner, the tenants who request the delivery/collection services and the transport operators.  A collaborative, community based solution addresses the problems of all stakeholders: the hub owners have a process for improving both security and congestion; the tenants can plan based on a commitment on delivery times; and transport operators work to a clear schedule and can minimise delays, cut emissions and improve turnaround times.

Working together via a single, secure solution all supply chain partners are involved in the process and have visibility into requested, scheduled and rescheduled dock appointments. With real time feedback from drivers’ GPS, potential delays are flagged and, if any individual appointment falls outside the agreed tolerance, it can be automatically rescheduled and optimised – and everyone related to that order is kept up to date. Indeed, with the right security authorisation any individual can access the solution to check the current state of appointments, expected arrivals for each hour, expected time of arrival and so on to provide a complete and real time view of the entire supply chain process.

For the transport operator, this pre-booked, optimised appointment model can transform performance by minimising wait time.  Rather than follow the herd and attempt to arrive first in a bid to offload and leave first – a policy that can only lead to one winner every day; working to pre-booked appointments reduces queues around the facility and enables that rapid turnaround required. With pressure on fuel costs and driver shortages, this ability to improve performance and get more from the existing fleet is compelling.

Conclusion

In this increasingly inter-connected and regulated world, the traditional pressures of driver and vehicle management and compliance begin to pale into insignificance compared to the challenges now faced. With retailers pushing back on transport operators regarding additional costs yet demanding rapid, just in time response; government threatening ever more punitive emissions charges; and security alerts further adding to already untenable congestion, pressure on margins continue to mount.

A collaborative approach is the only way to address these issues. From pulling together disparate aspects of the supply chain via integrated transport management and route planning to building a more collaborative, community based approach to delivering to sensitive locations, it is the ability to leverage and share accurate real time information across the supply chain that will enable transport operators to better manage assets and achieve that ‘do more with less’ objective.