Scale means a lot in the trucking business. The ability to navigate the twists and turns in daily operations is where size can offer an advantage. But still, many large, small and midsized firms struggle with the ability to manage by exception and recover from unexpected delays, breakdowns and the many other variables impacting schedules in an efficient and cost effective way.
Why? A lot of it has to do with the ability to utilize data. Data savvy carriers and shippers can more precisely predict the times that loads will arrive or depart a facility. Larger carriers have more data. More trucks = more data = more precision. More precision translates to more paid miles and less waiting. It can also lead to happier customers.
They are able to do this because they’re taking advantage of something called “network effects,” which refers to the increasing value a network delivers as more users come onboard. When shippers, dispatchers, facility managers, carriers and drivers join together to share real-time logistics data, everyone benefits.
Continuous Improvement – Lean Six Sigma
The good news is that these kinds of benefits aren’t the exclusive domain of huge shippers and carriers. Small and mid-sized carriers – who often feel beleaguered and overwhelmed by requests to share data – can gain enormous value from network effects, as well, and in the process better position themselves with the big boys. This also aligns with many manufacturers’ and shippers’ focus on a management philosophy called Lean Six Sigma which drives continuous improvement. Shippers that utilize visibility services such as FourKites end up learning a lot about their own operations and make improvements such as adjusting labor to improve dock turn times. FourKites customers make up 60% of the Shipper of Choice awards presented at the recent Freightwaves conference.
Lean Six Sigma relies on collaborative efforts to improve performance and eliminate waste, whether it be raw materials, inefficient processes or wasted time. Now, manufacturers can accurately predict when a new shipment will arrive, which means they can plan labor to ensure your truck is unloaded promptly, reduced inventory, fewer trucks sitting idle and less need for warehouse space – all of which help to reduce costs and improve efficiency.
And what is important to shippers and manufacturers is equally important to carriers. You may have a relatively small number of trucks or you may have many, but by opting into the network, you now have access to inputs from thousands of trucks across the supply chain. It’s a straightforward proposition: more users = more data = more precision = more value.
Today, shipments FourKites sees in the platform has hours of slack time built in. You may have the best TMS available, but if you’re still doing back-of-the-napkin math to get transit time from Raleigh to Chicago (800 miles x 45 MPH) you’re selling yourself short. Carriers routinely add excessive buffer into their calculations because of the inherent uncertainty of life on the road. By using a purpose-built algorithms for commercial shipping the right network tool, that factors in millions of data points, including tracking and weather, in addition to the data from a vast network of shippers and carriers, you will immediately see efficiency gains across your end-to-end supply chain. For carriers, such algorithms may also enable you to accept a better paying shipment when you get to a facility, versus waiting empty for six hours for the next opportunity. Ultimately, it’s all about improving utilization, efficiency and predictability, powered by the network effect.
The Network Effect and Core Track
FourKites’ Core Track aggregates and distributes information across key participants in the supply chain. For carriers, the tool provides the ability to monitor and manage by exception; instead of culling through a list of 200 trucks for a status update, for instance, you can now focus on the five or six that need attention right now.
The tool learns as it goes and alerts carriers to shipments that have the potential to be late – even before they have left the facility. That information gives carriers the ability to take some actions to recover the load, from changing drivers to providing advanced ETA notifications to the pickup or receiving location, and the like. These data-driven insights allow you to adhere to Lean Six Sigma principles and eliminate waste while improving quality.
Rather than relying on data from your 50 or 60 assets, you now are gaining knowledge and insights from hundreds or thousands of points in the value chain. Operating in a silo, you may get it right for your usual Monday pickup. But what happens on Thursday, when a special job gets posted and a set of new unknowns impacts your performance? By tapping into the network, you can make that Thursday data work for you, improve performance consistency and strengthen relationships with shippers.
Business today is all about continuous improvement, predictability and the customer experience. Going forward, as more data points are shared to the network – dwell time by shipper, hours of service levels by carrier, departure delays and route closures, etc. – carriers will realize more and more value. Being a part of that network will allow you to adhere to the same lean philosophies manufacturers use and help you to attain a higher-margin business as you focus more on higher-value tasks and less on track-and-trace. The key here is collaboration, with real-time data at the foundation – and the quid pro quo benefit of sharing, for all involved. While no tool or network will manage your business for you, you can count on it to deliver better, more precise information so you can eliminate oversized buffers and address waste head on.
