Should part-load operators look around to learn from their peers?
We are living in the era of digital disruption – or disruptive digitalisation, if you prefer, – a term that is fully intended to sound unsettling. The core message behind it is: Change means power! Or, in other words: The courage to innovate is key to our survivability as an industry and as individual companies.
Of course, no experienced business owner will invest randomly in all kinds of novel technologies just because they are being hyped. Everybody has seen those advertisements with calculations promising dramatic savings; the reality often speaks a different language. As a matter of experience, healthy scepticism is always advisable. On the other hand, we have seen fundamental changes happening with increasing frequency in recent years, both in the economy in general and the logistics business in particular. The speed of innovation has made it abundantly clear that the processes of the past can no longer be optimised by conventional means.
There is a growing pressure to take more radical action. In the multi-drop delivery business in particular, which is struggling to keep pace with the extraordinary growth of online trade, the big question is where to start. Of course, every investment poses a risk – you can never be entirely sure that you will ultimately reap the benefits. Furthermore, every technology change could severely disrupt daily operations, something nobody could possibly want during peak times; giving up proven procedures contradicts popular wisdom; and new technologies should be given time to demonstrate their potential before you embrace them.
With all this in mind, many business owners delay investments in new technologies until the vendor has been successful in the market for a certain minimum number of years. They leave it up to their industry partners who have the courage and perhaps some extra financial padding to venture into uncharted territory. This mentality is legitimate. Nevertheless, it is crucial to be aware of what is going on in the market, observe successful trends and watch what your competitors do and whether it helps them. And it is just as important to be willing and ready to take rapid action when a new trend shows good potential; after all, you do not want to fall behind the competition.
The bottleneck in part-load distribution is the dispatch process
In the part-load distribution business, an efficient dispatch process combined with sufficient storage capacity at the depot can decide about a company’s success. When the volume of shipments exceeds the amount of deliveries your available resources can handle on a day-to-day basis, your warehouse will eventually get so jammed that you will be unable to process shipments in due time. You will be forced to reject new shipments and lose business. Facing an impossible task, your dispatchers will lose control and begin improvising, which will further compromise operations.
Before you allow such a situation to emerge, it is advisable to look what others are doing to deal with the situation, especially the leaders of the segment. How are they tackling these challenges? And where is the hidden optimisation potential waiting to be uncovered? How can you benefit from it? The fact is, there is plenty of potential.
Artificial intelligence – a term many of us have heard often enough without getting a clear picture of what it can mean in our industry – is now showing its virtual brainpower in very tangible ways: Transport companies such as Hartmann International or Wackler Spedition & Logistik have tried and tested this technology and shown that the underlying sophisticated algorithms are capable of overcoming the key issues our industry is dealing with, putting a lot more shipments on the road, cutting dispatch time and effort, and reducing the amount of undelivered shipments per day noticeably.
The technology behind this is called Smartlane Transport Intelligence. Delivering value by optimising and automating the dispatch process step-by-step, it has demonstrated its power for several years now. But what about the disruption of daily operations when implementing this new software? In fact, this has been one of the main concerns of its developers. The solution can be deployed in a phased approach without interrupting your day-to-day operations. It ties into your existing TMS via an API. As time progresses, the solution takes on more and more of the dispatcher’s routine tasks, especially in the pre-dispatch stage. Contrary to other business software, you neither have to stop your IT systems for days nor change your processes in any major way. The Smartlane solution ensures that the right information will be available to the dispatchers at the right time within their familiar system environment while reducing stress and fatigue, enabling them to distribute shipments across vehicles and routes much more efficiently. Early movers such as Hartmann and Wackler have achieved impressive savings in the single-digit percentage range while delivering significantly more shipments per day without adding new resources.