On February 17, enVista had the pleasure of speaking amongst hundreds of supply chain professionals at the Omnitracs Outlook Conference, where we kicked off the morning with a presentation on trends in transportation management. This was a discussion, not about the mega-trends or macro-economic forces, but rather internal IT, operational, and tactical initiatives that clients are deploying to save money, improve service levels, and compete with their rapidly changing supply chains.
We presented on seven trends:
- Visibility applications
- Traceability
- Transformations
- Master data management
- Integration
- Final mile evolution
- Fleet-for hire and backhaul
Little did we know, some of these trends would be lifelines for companies during this time of uncertainty. Across all industries, companies are acting fast to determine how to properly react and respond to COVID-19. While each of the seven trends previously mentioned can be leveraged to support company resilience, this blog will explore the four trends we at enVista find to be the most urgent.
- Visibility applications
- Transformations
- Final-mile evolution
- Fleet-for-hire & backhaul
It is important to understand that a one-size-fits-all approach to recovery does not exist. Some companies are thriving in today’s coronavirus economy, while others are doing their best to stay afloat. Based on your company’s current operational and financial state, you should be able to assess the extent to which you can leverage the opportunities associated with these trends.
Visibility applications
Companies can only recover from the damages they are aware of. Without visibility to the entire network, companies are in the dark about the origin of their problems and associated causes. Visibility applications will provide the insight leadership needs to adequately plan and make informed decisions.
Visibility in this context helps answer “Where’s my order?” questions. More important now than ever, visibility to supplier locations and freight movements — on the inbound side — allows companies to predict lead times and set expectations for inbound receiving and outbound deliveries. The ability to manage customer expectations goes a long way — especially in the unprecedented situation we face today.
Several companies have brought visibility applications to the market. Fortunately, the dropping cost of technology and bandwidth are making these investments more realistic. This, coupled with a justified perception of high value to shippers, has led to rapid innovation. One leader in this realm, FourKites, is taking visibility a step further with its new feature: Network Visibility. They have expanded their platform to offer insights on all freight, regardless of the party responsible for payment, while collecting near real-time location data from ELD providers like Omnitracs. Most shippers using visibility applications are limited to location data only for managed freight, making this feature a significant upgrade.
Transformations
Achieving total supply network visibility is next to impossible without digital transformation. By now, nearly all companies have engaged in a transformation of some sort — irrespective of complexity. Digital transformations are driven by the seamless intersection of people and technologies that streamline business processes. The term digital transformation comes across intimidating to some, but in today’s digital world, the short and long-term benefits are unmatched.
COVID-19 has changed business models and supply chain processes in unforeseen ways. To keep up with the changes in demand, companies need to pivot. The biggest mistake a company could make is to upgrade an operational process, but fail to support that process change with the right technology — and vice versa.
Before moving forward with transformation, organizational roles and leadership positions will likely need restructuring to ensure a successful rollout. Consultants generally play the role of the translator between IT and business, but that is only temporary. With cloud-based applications, long-term, in-house business-side expertise will be the deciding factor that locks in success, and internal IT resources can focus on other IT-related activities for the company.
Final mile evolution
Final mile delivery was already the fastest-growing fleet segment before the COVID-19 outbreak. Now, with the enforcement of stay-at-home orders across the U.S. and other countries, it is growing even more rapidly than before. Essential businesses should be immediately capitalizing on final mile capabilities to maintain customer satisfaction and satisfy demand.
One example is Baldor Foods, a business-to-business grocery delivery service and wholesaler of produce, meats, and fine foods. One week into the pandemic in New York, Baldor Foods launched direct-to-consumer (DTC) delivery to replace the decrease in restaurant and hotel demand. This was a substantial shift in its go-to-market strategy, and the business was able to make that shift because of its supply chain agility.
It is also advisable for companies experiencing pain points right now to still be developing plans to move into final mile delivery — where applicable — and as soon as possible. Given the latest developments, it is safe to assume DTC delivery will soon become the new norm.
Keep in mind, the evolution of final mile had already begun before the virus. Modern consumers are ordering larger quantities and larger-sized items to their homes more now than ever before. Shippers and service providers must continue to evolve alongside consumers to stay competitive. After all, final mile technology is changing everything we know about deliveries, from equipment requirements to driver skillsets, and even urban planning and development.
Fleet-for-hire & backhaul
Fleet-for-hire and backhaul capabilities are not new concepts. Both opportunities strive to reduce the number of empty miles — or miles traveled without generating income. Fleet-for-hire suggests a private fleet, or dedicated contract carrier, picks up another shipper’s freight and delivers it for a price. Backhauling occurs when fleet or carrier hauls freight, possibly from another shipper, from their final delivery destination back to the truck’s origin to reduce costs.
Regardless of the operational and financial state of your business, think of how you can deploy fleet-for-hire and backhaul opportunities into your operations. For struggling businesses or those lacking demand, this will expose a tremendous cost and revenue benefit by maintaining utilization. On the reverse side of this, thriving businesses will take advantage of the immediate access to capacity presented by this opportunity. This approach requires a different mindset toward distribution and transportation. Rather than being solely store or customer focused, delivery teams evolve to become entrepreneurial by selling solutions to trading partners and new customers alike.
In response to COVID-19, companies must stay up to date with the latest trends in transportation to remain competitive. In addition to the four trends covered in this blog post, leaders across all industries should prepare for the emergence of new processes and procedures regarding the health and welfare of employees. This includes revised warehouse operating procedures, sanitation measures, and detailed employee and customer protocol. Now is the time to consider how we can break our habits, improve processes, and ultimately achieve operational success in this new normal.