In logistics management, transport managers often experience a lack of visibility, on present as well as future operations. What’s really at stake? Why is it such a problem for supply chain efficiency? Here is a fictional logistics director elaborating on this problem and its stakes with his peers on LinkedIn.
“Logistics isn’t a widely broadcasted subject. On this professional network, people often ask me what my challenges are, and what I wish today’s new technologies could bring me.
So let me explain some of my daily logistics struggles here.
- My company invested pretty substantial sums of money for the global transport 💸Now my job is to make sure that the theoretical transport plan for which we paid actually works. If any factory stops because no railcars or trailers were there to pick up the goods, that’s on me. And as we work ‘just in time’, it’s even more crucial. I have to mitigate my risks so that my plan works: expense management as well as the clients’ satisfaction are on the line.
- Logistics management is often perceived as just an expenditure source. That’s why on the longer term, I’m always pressured into reducing the costs, while still improving my performance of course. If I spend money on a solution, I expect it to have a strong ROI. I do not have time for technological tourism ✈️
- Things get even harder when you realize my missions occur at the European scale. My different teams each have their own way to manage their transport plan and suppliers. I need to centralize their data so we are able to collaborate. No need to say it’s not a piece of cake 🍰
Up until now, I am not able to get an accurate, granular vision of my performance. Instead of organizing the next transportation plan on what truly happened, I am bound to plan it on what was previously planned. To put it simply, my logistics are a theories overlap. The problem with this is:
how can I know my costs are justified when I do not precisely know what they were used for?
Let me give an example here. Each year, I rent 500 trailers. I know very well how much this costs my company. But I do not know how well these assets and the associated transport perform.
- Are the trailers used efficiently 10, 15, 20% of the time? Or even less?
- What proportion of my deliveries are late? For what reason?
If I had these simple supply chain KPIs, I could then take action towards a more efficient logistics management.
- reduce the unproductive time of my trailers. This would result either in transporting the same cargo volume with less trailers, either in transporting more goods with the same number of trailers.
- nip delays in the bud, before they even impact the end customer. I could also implement a performance-driven relationship with my suppliers.
On a day-to-day basis, I need clear visibility on assets’ availability, as my deliveries depend on this. Every week, I order wagons capacity to a few different providers, to spread the risk. I know from experience that they can’t always deliver what they said would be possible. So I order more wagons than necessary.
- 🍀If I’m lucky, I get enough capacity to send my goods, but I may end up paying penalties for cancelling extra orders.
- 😪If I’m not, then I can’t send my cargo, and my customers end up dissatisfied.
I wish I had a prediction tool that could predict risk for me: “in 3 days’ time, you have a 80% probability to have 50 tonnes of available capacity in Vilnius”. That would decrease my risk, and I would definitely sleep better.”