“The global recession reshaped the manner in which the freight and logistics industry conducted business. Operating decisions and business models were dissected and resources were reduced to survive. Moving forward in 2010, it’s time to rethink and alter our approach to business sustainability in order to reflect changing economic dynamics.” –Simon Clark, business development manager for Europe-Middle East-Asia (EMEA) region for logistics technology supplier CargoWise
One of the most perplexing challenges facing logistics and transportation providers these days is “business continuity,” or how to keep your business healthy and thriving despite big shifts in customer demand.
This isn’t news for truckers, certainly; I mean, this is an industry under enormous fiscal pressure. G. Tommy Hodges, chairman of the American Trucking Associations (ATA), told me trucking used to be a business where profits were measured in pennies; today, however, profit is measured in quarters of pennies.
Then add in the demanding needs of trucking’s customer base: Noël Perry, industry analyst and former economist for carrier Schneider National, told me that most shippers consider anything less than a 95% on-time delivery rate to be a failure. How about THAT for high customer expectations?
That’s why it’s so important to remain as nimble as possible in the freight world these days, noted Simon Clark, business development manager-EMEA region, for logistics technology supplier CargoWise. He, for one, believes freight and logistics companies need to carefully evaluate lessons learned from the still-ongoing global recession and address future business sustainability in order to avoid future operating risks.”
"In a global economy, the business environment will always fluctuate depending on market demand," Clark said recently. “Recognizing this, businesses must always be alert to changing conditions in order to maximize variable business opportunities. Doing so also ensures that companies themselves will not be at risk when moving forward. The success of any enterprise and its operating environment are critical elements in sustaining an ongoing workload and ensuring long-term success. Corrective, proactive and resourceful continuity measures should be taken regularly.”
OK – now, obviously, Clark (at left) believes that adopting CargoWise’s information technology (IT) systems can help alleviate some if not most of these problems; he’s a salesman, of course. But put that aside for a minute, because Clark makes some very interesting points here – especially when talking about the disconnect in how information is shared and stored in the transportation industry today, compared to the rest of the business world.
“Despite the fact that our industry is increasingly dominated by web-based transactions and social media, we remain a heavily paper-based industry,” he explained.
“Masses of paperwork in the form of job files are still created, kept in offices for months and then sent to a warehouse facility for storage," Clark added. "These are not always secure areas; and if damaged or lost, businesses are impacted when the authorities perform audits. The vast number of emails sent via computer or smart phone between parties is also at risk if a server fails and information is not recoverable.”
He stressed that as businesses continue to create enhanced types of communication with trading partners, it’s important to regularly reassess how information is compiled, stored and accessed in order to avoid the risks entailed if it’s corrupted or lost. Taking preventative steps, Clark said, such as archiving all transactional documentation electronically in a single software platform, can help.
“Virtually all transactional data can be automatically archived electronically, eliminating the need to store paper documents that can be damaged or lost,” he explained. “Electronic documentation also provides the ability to have email and content automatically added to the document archive and indexed back to the job file, which offers obvious continuity benefits.”
Clark added that eliminating manual data processing also saves labor and time, plus avoids the need to keep scraps of paper notes scattered about without required access, thus ensuring an improved, reliable and real-time business continuity process.
“An automated IT solution can store notes on all business documents, including job files, client records, credit history discussions and other critical information for each job file,” he said. “These notes can then be used as electronic ‘post-its’ that can be stored and passed internally between members of staff, or used as constructive formatted notes that can then become part of a cohesive documentation process. They can even automatically appear on client facing documents.”
Now, “business continuity” as a concept comes into play here by taking into consideration the involvement of work done by key personnel for specific customers. “A high-quality business continuity management process considers if employee account knowledge is also documented elsewhere so others can access it when necessary to ensure workflow continuity,” Clark said. That’s a fancy way of saying that everyone can quickly be on the same page with a customer, knowing their specific needs, so “hiccups” in service become a much rarer event.
“Regardless of market conditions, IT-based planning tools enable management, team leaders, sales teams, and others to act proactively to keep accurate records on all transaction histories through secure data centers that are safe and sound,” Clark said.
“Practical, constructive and accessible electronic data that tracks all critical information, identifies new trends in spending patterns, trade lane analyses also prevents potential risks,” he noted. “This helps support business continuity planning by ensuring the day-to-day success of logistics operations regardless of the economic climate and business model required to meet changing market dynamics.”
Even despite a predicted uptick in the global economy this year, Clark knows business management challenges will still exist – so how the logistics industry approaches changing customer profiles while addressing business continuity planning will be critical for logistics and transportation providers to achieve both sustainability and success in their enterprises.
Something to think about as we wait for better economic times to unfold.