Saturday 1st Oct 2016 - Logistics Manager

Revitalising transport management

Transport is becoming increasingly tech savvy. Alexandra Leonards explores the trends in transport management, and the challenges currently being faced in the market.

This article was first published in Logistics Manager, June 2016.

This article was first published in Logistics Manager, June 2016.

New technologies, and new approaches to existing technologies, are appearing left, right and centre in the transport management market. The logistics industry is pursuing an ideal operation – one that stimulates pace and productivity at the highest level.

Mobile technology, in particular, is becoming an increasingly dominant force in the transport management market.

“The haulage industry is leveraging mobile technology to drive greater efficiencies and create a competitive advantage, use mobile solutions to provide higher levels of customer service, and improve communications between their traffic offices and drivers, and even bridge the gap with their customers,” says Tracy Welford, head of marketing at Mandata.

According to Welford, this kind of technology must have the ability to support operators at all stages of technology adoption. This means catering to those companies that are early, or late adopters. This gives companies the space to change and improve at a convenient pace. And this is something the right mobile technology can deliver.

Perhaps that is why mobile technology is slowly swallowing up PDA custom in the haulage and logistics sectors.

“With the majority of modern smartphones featuring built-in cameras, wireless internet, GPS connectivity, voice recognition software, downloadable barcode and QR scanning applications, mobile devices are both more affordable and more diversely functional than standard handheld PDAs,” says Welford.

Most of us have a mobile device – the technology is simple and easy to use. So transporting this into the haulage space isn’t a difficult process.

“By use apps and software add-ons, logistics workers can use their own mobiles or their employer’s devices to perform a range of tasks including vehicle inspections, image capture of job non-conformance, sign-on-glass signature capture, digital POC and POD notes, and access digital manifest and traffic information,” says Welford. “Offering seamless integration to centralised transport management systems through wireless and Cloud technologies, mobile provides users with the maximum flexibility to work and access key data at any time, from anywhere, so long as they have an internet connection.”

However, mobile technology doesn’t come without its challenges.

“Every company has its own mobile app offering, which poses a challenge for the transport companies having to deal with multiple applications for their customers and carrier partners,” says Tim Fawkes, managing director of 3T Logistics.

Unsurprisingly, tracking and telematics continues as a key trend in the market. And with new, unceasing demands and developments, telematics technology is becoming more and more complex.

“With the advent of more in-depth fleet and driver behaviour analysis capabilities, operators can monitor KPI’s such as fuel economy, average speed and idling time to help them make cost savings and performance improvements across their fleet,” says Mandata’s Welford.

Mandata has a number of fleet behaviour apps that are designed to enable drivers and driver trainers to access the information needed to track and improve their performance. The apps, Mandata SmartDriver, and Mandata DriverInsight, provide live-time performance tracking, and display the performance of the fleet as a whole on a daily, weekly or monthly basis.

“Retailers are looking to offer unrivalled certainty, communication and confidence to consumers in the most affordable manner possible,” says William Salter, managing director of Paragon Software Systems. “By using the latest transport optimisation and logistics planning systems they have the ability to better control all aspects of the order fulfilment process.”

These systems are wide ranging, and include things like multi-channel order integration, capacity management, customer communication, consignment tracking, and continuous route optimisation. The number of systems are growing – and the industry is beginning to embrace and fully use them.

Truly exploiting the telematics, or ‘big data’, of a transport operation can unlock information that may lead to a faster and more efficient solution.

“Advances in routing and scheduling systems are helping retailers to reduce the cost of delivering choice and convenience to customers and differentiate the omni-channel shopping experience they offer, while targeting operational efficiencies and increased first-time delivery rates,” says Salter. “For example, continuous optimisation of delivery routes is enabling retailers to provide multiple time slots to consumers at the point of purchase that are both achievable and an efficient use of vehicle and driver resource.”

These systems lower abandonment rates, increase sales and ensure high-density routes with maximum drops and less miles.

“The availability of detailed road and mapping data offers powerful levels of intelligence which can be fed into a planning system to provide vastly superior and more accurate routes,” he adds. “For example, street level mapping offers greater understanding of road layouts including one-way systems and left/right turn restrictions, while truck attribute data helps to avoid vehicle restrictions such as low bridges or roads with weight limits.”

Routing and scheduling software can now automatically flag up these kind of restrictions, so drivers can avoid them – making for a much more accurate and on-time delivery.

Challenges

There are still deep rooted challenges faced by the transport industry when it comes to management systems.

“The industry still has rigid systems in place that work in a set way that may not support the needs of an individual business,” says 3T Logistics’ Tim Fawkes. “We have changing technology that provides much more cost effective solutions to technology that is just one or two years old but there is a lack of funding for investment in transport systems.”

Fawkes identifies the application of change management, including driver and administrator compliance, third party carrier compliance, and the industry’s multiple party structure, that is . carriers all working on one system, as key issues in the industry.

The traditional location-centric model for TMS is beginning to wear thin, and the industry is calling out for an alternative.

“There is a growing recognition that the location-centric approach to transport management does not meet the needs of global supply chains today,” says GT Nexus’ Kapoor. “First-generation cloud vendors in this space have been unable to address market needs.

“ Supply chain operating networks connecting all supply chain partners in the context of a multi-enterprise supply chain hold the most promise.” He says that these networks then become operating platforms for the smaller partners and promote collaboration.

Kapoor says that, so far, the industry hasn’t actually seen much advancement in transport optimisation algorithms. But there is hope for the future. And it’s the Cloud that may deliver an efficient and up-to-date optimisation solution.

“ Next-generation optimisation technology that takes advantage of unlimited processing power provided by a cloud architecture will provide the next big step and take a lot of cost out of global supply chains,” adds Kapoor.

As the supply chain grows, so does its demands. And technology should be growing with it.

But it isn’t exactly moving at the same pace. There has been a big push towards meeting customer demands, and this is gradually finding its way to the forefront of most logistics operations. And yet, transport management systems don’t appear to be keeping up with this new focus.

“Supply chains have fundamentally changed in multiple ways,” says Kapoor. “They’ve become longer, spanning multiple geographies.

“We still like to take cost out of the supply chain but value customer experience more.

“This creates the need for a higher level of agility in the supply chain.”

 Global requirements

He says that transport management systems haven’t really changed to adapt to these changing needs. According to him, the systems instead remain focused on domestic transport, and they aim to address global transport requirements by adding minimal functionality.

This simply isn’t efficient, and can be a blow to a company’s finances.

“A location-centric approach necessitated by this design results in expensive multi-year implementations and a compartmentalised representation of the supply chain,” says Kapoor.

He thinks that transport management must be redefined to address the central needs of the market.

“End-to-end supply chain representation, optimisation, and visibility have to be foremost in the design of new-generation transport management systems,” he says.

Consumers are constantly looking for a cheaper, faster deal. And this puts pressure on the TMS market.

“The vast majority of consumers are typically looking for a low-cost or free order delivery that fits with their individual lifestyle and routine,” says Paragon’s William Salter. “Therefore, the availability of effective and guaranteed last mile delivery – to home, store or drop-off point – is now strongly influencing the decision to make a purchase.”

Order fulfilment has become more and more expensive because of these consumer demands and expectations.

“There is a need to increase levels of technological sophistication within the supply chain to deliver added levels of functionality that achieve efficiencies that can as much as possible offset the added financial pressures,” adds Salter. “Consumers have become used to receiving order confirmations by email, using SMS to confirm or change a delivery slot, and tracking progress online.

“Therefore, any transport optimisation and logistics planning system needs to offer customer communications capabilities throughout the order life cycle to increase customer peace of mind and reduce call volumes to the customer service team.”

He says that because consumers now want to decide exactly how, where and when they receive purchased goods, retailers and their delivery partners should also consider self-service tools as part of the order fulfilment process.

Separate systems within an operation can also create problems for a business.

“For hauliers, operating separate systems from their customers, sub-contractors and business partners has long been a problem,” says Mandata’s Jim McGlynn.

“Different business processes and means of communicating information between departments can make collaborative working very difficult.”

Surprisingly, many haulage companies continue to use a manual paper based system.

“Paper-based systems are also still a challenge being faced by the road haulage sector,” says McGlynn. “Because of the old ‘if it’s not broken, don’t fix it’ cliché, some haulage firms are still operating their day-to-day business on spreadsheets and white boards, planning all of their work by hand, although the software solutions exist to help alleviate the workload.”

This might work relatively well for a very small business. But this kind of system just makes things more difficult as the size of a company grows. Paper based systems are just not up to scratch for a large operation – it can become messy, unreliable, difficult to manage, and time consuming. And who has time to waste when the customer is waiting?

“Computerised systems add value on a number of fronts; businesses are able to cope with additional work loads and through time savings, staff can be diverted on to other tasks and they can achieve more,” says McGlynn. “Use of cloud-based systems is making businesses more agile.

“With information channelled through one system, staff, whether they be located at different depots and offices, no longer have to be in the same office to share the same information.”

And when a business grows it is advisable to look beyond a simple computer network, and start investing in more intricate and reliable technology.

“It’s essential for logistics companies to ensure they have worked through these scenarios – as new business areas and clients are added to the portfolio, a small-grade system may struggle to keep up,” says Gerry Daalhuisen, VP product management, Kewill. “One way businesses can address this is to invest in cloud-based services as opposed to hard-drive software, enabling them to introduce new divisions and networks without the need to hard code changes.”

Europa revamps systems

Europa Worldwide is revamping its IT system. The first phase of ‘Leonardo’, the bespoke £1.7million system, is being rolled out across the business this summer. It is the company’s biggest IT investment of the past 35 years.

The first phase of the programme, ‘LeoRoad’, aims to ‘enhance’ the company’s road freight operation. The logistics company hopes that the scheme will improve responsiveness, efficiency, productivity and future scalability across all of its 11 UK sites.

It will include: proactive operational monitoring of shipments, discrepancy management, customer and partner daily reporting, and transit delay announcements like weather restrictions.

“Designing and implementing a completely bespoke system is by no means the easiest solution, but it is by far the best,” says Richard Litchfield, IT Director, Europa. “We’ve been able to take control of the project, deliver it on time and create something that completely meets the needs of our businesses and that of our customers.

“It can evolve as we need it to, over time, so it has future-proofed Europa.”

Centralised TMS systems can be really effective

A significant shift in the market is the integration of transport management systems. Combining systems so management can take place in the same place makes the process a whole lot simpler, and enables operators to fully exploit the technology.

“More and more commonly, transport operators are looking to simplify their operations by reducing the number of systems they work from,” says Tracy Welford, head of marketing at Mandata.

“With an integrated transport management solution at the centre of their transport business, operators can manage everything from job planning and load allocation, to PODs and invoicing from one location.”

With additional functionality, such as third party software integration with pallet network carrier systems and accounting software, a centralised TMS can become a powerful tool from which to manage an entire transport operation simply and effectively,” says Welford.

“By integrating systems together, users can save time, data accuracy will be improved, as well as communications across departments and with customers.”

Integration is also trending elsewhere. More and more transport management companies are being consolidated.

“Three of the larger TM offerings from Manugistics, i2, and RedPrairie got consolidated under JDA,” says Ajesh Kapoor, vice president, product management at GT Nexus. ”Trimble has consolidated a lot of different applications needed to manage transport.

“Kewill acquired IBM (Sterling) domestic TM application and LeanLogistics.”

Play the game

 An unusual trend that Stephen Watson, Microlise director of product, thinks would benefit the transport industry, is ‘Gamification’. He reckons that identifying the principles that make gaming so entertaining could be used to draw talent into the transport industry.

“With an aging workforce, the road transport industry is said to be facing a ticking demographic time bomb,” he says. “The looming driver deficit is already pushing up costs, both financially and in more abstract ways, and making workforce planning a constant pressure for many companies.

“This [Gamification] may all seem a little inconsequential to the transport industry, but it does identify a trend, which if harnessed, has the potential to impact positively on transport and logistics.

“There are endless examples where applying game mechanics to non-game situations has been successful.”