Process and technology in balance

Fall has always been my favorite time of year. A new school year begins, the air becomes crisp and clean, and the leaves begin to burst into the colors of autumn—all signals that the season of traditions is right around the corner.

One tradition that will continue this year regardless of the pandemic is the release of the “Annual Study of Logistics and Transportation Trends,” a study that Logistics Management refers to as “The Masters of Logistics.”

Now in it’s 29th year, the study has been recognized over this time as the ultimate report card on overall logistics operations performance. Through the survey, our research team, consisting of Mary Collins Holcomb, Ph.D., of the University of Tennessee, and Karl B. Manrodt, Ph.D., of Georgia College, dig in to reveal the percentage of freight dollars being spent by mode, share updated performance metrics by mode, and identify any major shifts in transportation spending and technology adoption.

Holcomb and Manrodt have once again put context around the findings starting on page 20. Over the past three years, Holcomb and Manrodt have also used the study to put more focus on the key factors driving digital transformation in our logistics operations, including the need for improved visibility and overall performance.

In fact, this year they found that the increasing performance pressures being placed on logistics operations due to the rise of digital commerce and the manic supply/demand imbalance caused by the pandemic is clearly pushing operations along the digital transformation path. But first, says Manrodt, logistics mangers tell us that they need to find internal balance before they apply the technology.

“One of the themes that continues to surface is that while it’s understood that technology is a key part of digital transformation in freight transportation management, respondents now realize that strategy, structure and processes must be aligned accordingly to generate new ways to create value for their operations and supply chain partners,” says Manrodt.

To make that a reality, the research team suggests that the front-office interface with the customer must now be fully integrated with the back-office internal support activities and systems all through logistics and distribution. “Unfortunately, many companies tell us that they still struggle with seamless integration both internally and externally—a key factor in our quest for a digital supply chain,” says Holcomb. “We’re still falling short.”

Of course, this all needs to begin with having effective processes in place matched up with the timely information necessary to better manage those processes. “Respondents know that supply chain information needs to move seamlessly across company boundaries,” adds Manrodt. “That will require a collaborative network—closed or open—of shippers and carriers working together on a single platform. The next step is actually allowing that information to flow.”

According to Holcomb and Manrodt, once that happens, that new level of collaboration will lead to the realization of what the team refers to as “the greatest untapped opportunity” for the logistics and transportation industry.

“Eventually, we could partner to create collaborative networks of firms to manage the 2.3 million trucks running empty 25% of the time,” says Manrodt. “The tools necessary to create this digital network exist. We just now have to make them part of the process—it could be as simple as that.