Lots of folks in trucking – especially small carriers – may think they don’t need enterprise resource planning (ERP) systems, and for some very good reasons; the biggest, of course, being the price tag for such technology.
The thing is, though, trucking is increasingly a digital enterprise.
Yes, trucks, trailers and drivers still move physical goods and, yes, we also need plenty of human hands to load and unload that freight (though drivers often STILL get stuck with that duty) plus keep all that equipment up and running safely.
Yet to make all of that work efficiently and profitably requires careful analysis of information – and you aren’t going to get that if you don’t have some sort of ERP system in place.
Dan Griffin, director of product management for ERP provider Exact Macola, recently shared some thoughts with me on why this is so, as well as some indicators for truckers that it may be time to invest in such technology.
“In so many ways, our economy depends on the efficiency of the transportation industry,” he told me.
“With the rise of the on-demand Internet economy, business and consumer audiences alike are expecting goods to be delivered rapidly,” Griffin (seen at right) said. “Thus managing operations from a disparate collection of manual and ‘siloed’ systems like loose spreadsheets and software applications ultimately impair your ability to get a 360 degree view of the business, creating bottlenecks that can be costly to the bottom line.”
He believes ERP software addresses such issues: automating and unifying all critical business processes across the organization, making business data available in real time to executives, and – most importantly – erasing logistical and organizational inefficiencies that can threaten customer service, customer loyalty, and profitability.
Of course, nothing in this world at least is perfect and that goes double where technology and metrics measurement are concerned (go here and here for some thoughts on that). And it certainly isn’t easy extracting true value from all the data generated by a trucking company, either; go here for further thoughts along that track.
Still, Griffin contends that there are obvious signs trucking executives should heed in terms of deciding when to “pull the trigger” on ERP implementation. From his perspective, here are five of them:
- Your company currently tracks critical information in a system that neither automates nor integrates – Accounting software manages only financial records, said Griffin. It doesn’t handle projects, production, distribution or CRM (customer relationship management). For these and other tasks, you must then turn to spreadsheets, paper-based or other “siloed” or homegrown systems, he contended. “Since most billing transportation systems aren’t integrated with a financial element, you end up entering the same data into multiple systems, which is both time consuming and leads to mistakes,” Griffin noted. “ERP software automates all your business processes and functions including project management, distribution, quality management, accounting and finance, human resources management (HRM), and CRM. Data entered into any of these modules is stored in a single repository that serves your entire enterprise. By eliminating the need to maintain separate systems and manually re-enter data into each one, you’ll save time and slash your risk of error.”
- You lack real-time visibility into business performance – When data is stored in multiple disconnected systems it becomes difficult to get a true view of what is happening across the business without relying on an army of people spending hours, days, even weeks pulling data out of different spreadsheets to create custom reports that answer questions about sales performance, inventory and more, Griffin said. “Lack of visibility is particularly a problem for executives with enterprise-wide responsibility,” he stressed. “Executives need access to data about the performance of the entire company at a moment’s notice to answer a shareholder question or make a strategic decision. Think of ERP software as your business information fleet, transporting the right information to the right person at the right time and place.”
- Your service costs are on the rise – You can’t improve what you can’t measure, so you need to know what your costs are before you can find ways to reduce them. “By providing complete visibility into all your costs, including vehicles, labor and overhead, ERP software enables you to accurately determine areas that can be tightened,” Griffin explained.
- You want to improve collaboration by boosting efficiency and transparency – Chances are your company has mission-critical work processes that demand collaboration and cross-company interactions. As you grow your business, manual processes start to take too long and tasks can fall through the cracks, Griffin pointed out. “It’s often difficult to track all documents necessary to fulfill orders,” he said. “Workflow engines within ERP software prevent important tasks from getting lost and automatically route tasks to the next person in the chain.”
- You want to sharpen your competitive advantage – Cumbersome manual processes impede competitiveness in many ways, emphasized Griffin. For example, the inability to quickly and accurately answer customer questions impacts customer service and can then lead to lost business. “Automation ensures that work processes are completed in a timely fashion that allows you to be more responsive to customers,” he noted. “Document management means you have instant access to necessary documents, which further improves cycle times. ERP software also enables sales reps to provide quotes faster as it provides all the information they need at their fingertips.”
Of course, not every trucking company will see themselves reflected in the situations above, but that’s OK. This serves merely as further food for thought as the industry begins to work its way through what could be an extended near-term slump in freight activity.
And it’s during such slumps that the need to contemplate change becomes a more heightened reality. That’s especially true where technology like ERP is concerned.