A strong digital ecosystem is vital for success in transportation. A digital ecosystem works well only when the lifeblood pumping through it – aka data – can be comprehended and manipulated by the diverse applications in action in that ecosystem. In the transportation industry this challenge increases manifold because of the multiplicity of vendors, partners, geographies, routes, and modes of transport. Add to this the complexities of warehousing, security, quality control, and adherence to national and international regulations, and you’ve got a Titanic challenge to surmount.
Comprehending a challenge is the first step toward tackling it. There are three aspects to this challenge: data, visibility, and support. Let’s explore how they complicate the situation, and how adopting a framework such as ITIL can help organizations
An average logistics provider manages both warehousing and transportation of goods for its customers. The digital ecosystem of such an organization would be populated by its own internal stakeholders from various business units, trading partners, and customers. All of them would share and require ‘data on demand’ in a secure and easy manner, to make informed business decisions.
However, in the absence of suitably designed ecosystem-wide solution, data is at the risk of being stored in disparate systems ranging from excel sheets to ad-hoc designed solutions. Since there is a high degree of manual intervention, such data is likely to be inaccurate and insecure. Moreover, it is also likely to be outdated by the time someone may want to use it.
The challenge is complicated by the fact that transportation is just an umbrella term for a host of sub-industries. For instance, any logistics provider will need a solution to manage its HR processes, another for fuel management, yet another for fare collection, and another for vehicle maintenance, and so on so forth. The data collected using disparate solutions, while belonging to the very same business, might be in incompatible format, making analysis impossible!
Next, even if the in-house data is in good form, it might be incompatible with partners’ systems. Such data will have to be suitably transformed before analysis. The challenge is compounded if they are working with legacy IT systems, because they are extremely difficult to maintain and customize.
In another post I recently wrote, I had referred to a report by the American Shipper, in which it was mentioned that an overwhelming 66% of shippers and over half of 3PLs do not have a single view across all regions and modes of transportation. Instead, they patch together data from different systems and solutions. A patchwork can hardly suffice for accurate real-time insights.
In transportation industry more than any other, it is natural for all stakeholders to be interested in knowing where their stuff is at a given point of time. Any decision taken in the absence of this information can, at best, be tentative, or at worst, be a mistake. Moreover, people would like to know if their intervention is needed to address an unforeseen issue that might turn into a problem.
Ideally, a logistics company should first figure out what visibility means to them, and to their end customers and users. In addition, they should introspect what kind of answers, or advantage, do they hope to gain from visibility. The current trend is to look for real-time insights that can be driven only by real time updates. Real time updates can be registered and interpreted only if the technology platform connecting all the stakeholders is technologically agnostic i.e. it utilizes a technology that everyone can comprehend and work with. This technology platform should ideally exist throughout the digital ecosystem.
Internet of Things (IoT) can play a huge role in making this possible. With IoT, organization may track not just its truck or ship, but even individual items comprising the cargo. The data could reveal not only its location, but even other details such as its temperature. Adriana Diener, Global Lead for Freight and Logistics, Accenture, says: “Understanding and investing in these technologies will be important for logistics companies and whoever gets there first will have a competitive advantage.”
However, all such solutions come at a cost. Most organizations are comfortable using their existing transportation applications and have neither the time nor the inclination to migrate to newer, and more agile, solutions.