Do you have the change management process in place to support the move to a TMS?

Logistics Technology ROI Depends on Behavior Change

Leaders seeking ROI on investments in logistics technology must manage behavior changes across their organizational hierarchy.

The best logistics technology offers you the ability to standardize and automate business processes, optimize transportation procurement and improve communications across your network.

Accessing those outcomes is likely to require some level of change, and we all know change is rarely easy. Whether we are talking about a new flavor of coffee, a simple shift in routine or a new technology tool, humans are naturally resistant to “different.”

With the right approach to managing a change into a new technology environment, you can minimize the impact on your people and your partners. At the same time, you can maximize the ability of your TMS to implement your business goals, manage those goals, and enjoy the results that drive ROI across your business.

Let’s highlight aspects of our proven process that helps business executives manage change across key stakeholders in a TMS implementation: the leadership, operational management – and your business partners.

Start at the Top, Drive Technology Adoption

Top-down sponsorship is big in any project. When it comes to implementing new transportation management technology, it is even more important. Leadership must articulate and communicate an ROI message that conveys how logistics technology empowers the organization to achieve its business goals.

The work begins when you start exploring the right TMS for your business. Involve the team members who will use the tool day-to-day. These are the people doing the work, help them understand the benefits – a “why” behind the change that is relevant to them.

It gives you more control to help automate repeatable processes, and, in doing so, it gives your team back additional time to be more strategic in their activities.

The why for the organization: you are able to control your business strategy, define your strategy in business rules and put those rules in a system that allows you to execute based on those rules.

Once you communicate the “why,” seek the input for your team.

Your logistics users know the challenges they encounter regularly, and they know the capabilities that will make their jobs easier. Seek their feedback. This creates a sense of ownership in a tool you need them to adopt – instead of discord around a burden mandated for use.

Utilization is paramount. So, too, is standardization, which is a significant benefit of a TMS. Does every user at every location accomplish the same tasks with the same steps? If not, there may be a level of SOP you can capture and implement throughout the design of your operational rules utilized within your TMS.

Then, set expectations that the program will be monitored and measured, including successes and failures. Keep the line of communications open. Encourage users to voice their challenges and concerns. As you refine the technology based on input, you foster greater openness to change. That goes a long way toward making sure your system is easy to use, while you drive compliance in support of the “why.”

Along with compliance measurement comes downstream reporting that is critical to your executive communications with leadership stakeholders. Often when these leadership layers back a logistics technology investment, they do so expecting specific, quantitative return.

Level-set expectations early: ROI is coming, but not until information moving through the TMS arrives in reporting. This is what illustrates savings and transportation performance.

Least cost summary and other downstream reporting coming through your TMS helps measure compliance to routing rules set in place.]

Understand and Manage Technology Expectations

The tactical team is changing their work processes – from the old way to the new way – but functionally, not a lot should change for them. Built correctly around the right business processes, a TMS creates an immediate benefit for these users. Quick results ease a lot of change pain.

The work creates a different challenge for your operational managers. When theyenact the change they will need to have all those conversations about the “why,” earning adoption and compliance. The most challenging aspect is only having a partial adoption rate across your cross-functional user base.

If portions of your team do not adopt the tool, there is a risk for them to vocalize that to executive sponsorship. That is a big reason the users at this level must feel like they have a role in implementing the application. Creating a positive fact-based feedback loop to leadership based on the success of the program will be critical.

At the same time, your operational team must set expectations and bridge the gap to leadership by communicating downstream without creating pushback.

Operational leaders also must maintain alignment between tactical activities and strategic goals, where results are realized more slowly. While the first load booked in a TMS saves time for the tactical user, as I mentioned above, gathering information and building a data case for cost savings and efficiency gains is a longer process.

Just as a level-set for ROI timelines is important with leadership stakeholders, maintain a measure of patience with operational managers tasked with justifying the TMS. Once the best business rules are captured and applied into your organization, your technology platform will provide operational managers with reporting they need to demonstrate the value of the logistics technology to you.

Logistics of External Change: Carriers and Vendors

Be prepared to manage change with carriers and suppliers.

Your current transportation providers may raise red flags when a new party enters the conversation, especially if you enter a relationship with a technology partner. Naturally, they want to keep your business, and they may cite artificial concerns about lost relationships or diminished service.  

The reality is, using a TMS means you execute your carrier routing dynamically based on the best cost and service. These terms dictate the relationships your business should maintain.

Meanwhile, your suppliers and other vendors will need to start providing information into the system and give you a new layer of visibility. This introduces change for your partners and their daily process. Some are resistant. Some are not.

For both your carriers and your vendors, communication is important. It often requires a new process to convey expectations, including additional standardization, to all your partners.

Your vendors may need to sign in to the system to report receipt or shipment, using all the correct reference numbers. Do you communicate these new needs in your purchase order, through the TMS or a direct letter?

Your carriers may be required to input freight movement updates manually. If they do not, they will be accountable. How does that communication occur, and who manages it? While you want to limit the amount of effort required for external users, someone still has to own the compliance management.

Along with these conversations comes the compliance monitoring piece. Any TMS inputs require a level of measurement and compliance that will drive adoption – whether it is internally, or with your carriers and vendors. To maximize the value of TMS in your business, you not only need compliance within your four walls, but also with your carriers and vendors.

Minimize the Impact, Optimize the Logistics Technology

Logistics technology can deliver benefits to your business. Combining that technology with change management support from an expert partner helps you get to those benefits faster and easier.

We have a proven process that includes different levels of stakeholders throughout the implementation. We not only capture your business rules and initiate improvement where appropriate, but also we allow your teams to be part of the overall deployment of the TMS.

We work with you to identify the “why,” help you communicate that across your organization, and implement the compliance tools required to insure adoption. Validate your business case for TMS with customized reporting that combines information from your TMS with our independent freight audit and payment solutions to paint a clear picture of performance.

We also work with your supply chain partners to make sure that they are supporting your initiatives and your success. For your carrier partners, that means protecting the relationships that provide best cost/service. If you need additional providers, we foster those relationships, coordinate meet-and-greets, and make sure expectations are outlined clearly before the first load moves. Importantly, our executive relationship with transportation providers across North America provides a secondary point of escalation that produces faster results than a terminal manager or regional sales rep.

You face a disadvantage if you have a TMS, but lack relationships with your carrier base or have an audit function to validate the compliance of your contracted pricing and routing rules. Because Transportation Insight is able to provide the additional service offerings, and we are involved in supporting the success of your business, we can help shape and affect change management in all the areas related to the technology. And since we have worked across a multitude of customers and industries, we know the best practices that work in many domains – including yours.

Deploying logistics technology into your business does not have to be a huge undertaking. We can help you ease the change by fostering relationships at the foundation of your success. Contact us today to put the power of partnership behind the behavior changes that give you the most return from your TMS solution.

Transportation Insight’s logistics technology offering is backed by experts who help your organization implement best practices, manage behavioral change and give you time to focus on other priorities.

Supply Chain Data Visibility to Plan, Adjust, Communicate

Shippers with good visibility into all aspects of their supply chain – including into suppliers for multiple tiers – can build resilience and agility to lessen the impact of disruptions like global pandemic, natural disaster or political upheaval. Supply chain data visibility, however, is just one piece of the puzzle. Your ability to act on that visibility is the key.

Drive Network Improvement with Data Visibility

Supply chain leaders around the globe are basing immediate action on real-time supply chain information – often captured through emerging supply chain technologies.

According to a recent Oxford Economics survey of 1,000 supply chain leaders, 49 percent – the top 12 percent of respondents – can capture real-time data insights and act on them immediately. Of those surveyed, 51 percent use Artificial Intelligence and predictive analytics to capture information. Although more than 75 percent of respondents recognize the importance of visibility into sustainability practices of their organization and suppliers, few have visibility into either.

While those leaders may realize new efficiencies in tactical execution, truly developing a strategic plan for procuring services and serving customers, requires more than a customized transportation management system.

Visibility End in Mind: Plan, Adjust, Communicate

You can know where to find the load, the inventory or the vendor, but you need technology, tools and talent to execute three steps integral to monetizing that information into cost savings or enterprise growth:

  1. Supply chain visibility is vital to initial network design, as well as contingency planning that may be required during an era of disruption.
  2. Supported by a contingency plan or evidence-based analysis, visibility empowers tactical operators and executive leadership to adjust their strategy to mitigate risk or seize an opportunity.
  3. Close the loop by communicating those adjustments to customers and supply chain partners, and enhance experiences while controlling costs across your supply chain.

Ultimately, visibility into your end-to-end supply chain helps you understand how to pull different levers across your network and increase the return on investment of the whole supply chain.

Real-Time Supply Chain Data vs. Real-Time Access

There’s a big difference in real-time data and real-time access, the latter can be far more valuable because allowing data to solidify can increase accuracy. The most important real-time data is track and trace. Although from the standpoint of being actionable, there is likely limited actions that can be taken to impact it other than communication.

There’s a balancing act between the information you have and the amount of lag time required for the information to be validated and integrated across the reporting. The length of time the data needs to “soak” depends how you intend to use it. You want to be able to correct performance before it gets out of hand, but at the same time you don’t want to make decisions based on incomplete data.

For instance, bidding on an LTL shipment in the TMS, you don’t want your financial reporting to reflect cost until the carrier has invoiced with any additional accessorials applied. Real-time access to your latest data gives you the power to identify trends so you can validate or eliminate services for improved cost control.

Mastering Data Visibility

Supply chain data visibility is accessible through business intelligence technology like Insight Fusion.

Deep, multi-layered visibility is a fundamental ingredient in elevating your supply chain to its optimal performance. Solutions for achieving that visibility are widely available, but none deliver greater supply chain mastery than Transportation Insight.

We build personalized solutions that give you visibility to rate savings, optimization opportunities and behavioral changes across the organization that reduce cost and can fund your initial start-up in the process. Executing in those areas, our team leverages transportation technology tools to improve the flow of data to drive ongoing process improvement that generates waste reduction, improves equipment utilization and protects profit margins.

Master visibility across your supply chain with our free resource “Mastering Your Supply Chain: Layers of Visibility.”  Download it today to access the information you need to improve service and achieve monetary savings.

Blockchain in Supply Chain: Can You Trust Your Data Sharing Partners?

Not everything is changing.

When it comes to the blockchain, artificial intelligence and other emerging technologies we’ll increasingly implement in go-forward supply chain practices, we’ll still rely on the same essential element: trust.

Now more than ever, to benefit from these technologies, all parties in the supply chain will be required to share data at an unprecedented level. Possibilities for improved efficiencies, real-time visibility, data security, vendor compliance and other benefits will flow from shared data streams.

Yet many companies are culturally uncomfortable with the depth of transparency that will be required. Those organizations that do not participate will find themselves increasingly isolated from the economic mainstream.

Certainly, organizations should exercise due diligence in understanding the partners who will access their information and how it will be used. Organizations don’t have to share with every vendor or service provider that requests access. But enterprises must prepare for the new world of shared data with policies and procedures for these technologies emerging in the supply chain environment.

Do you have concerns about sharing data with your supply chain partners? If so, do you know why?

Blockchain Builds on Trust

Technologies like blockchain create a new “trust economy” where the old intermediaries are replaced by new systems. As blockchain and artificial intelligence enter day-to-day use, sharing data with third parties and vendors will be necessary. The system creates security through technology rather than relying on familiar relationships of the past.

To be useful, your organization’s data must be validated to ensure it is accurate and complete. Information stored in the blockchain isn’t valuable if it’s wrong.

Blockchain, in particular, is developing as a safe, customizable standard to share data in a way that protects proprietary information while providing value from the openly available information. For example, companies can manage supply chain vendor compliance issues without revealing specifics about their supply chain.

As the use of blockchain moves forward, it will be critical to strike a balance between transparency and confidentiality for all stakeholders as they adopt the technology to record and share supply chain data. With well-thought-out restrictions, a company could use the blockchain for internal purposes and share only the necessary data with other stakeholders.

Sharing data makes the most sense when it’s part of a strategy to improve processes or connect with partners in the supply chain. Blockchain information will drive tactical and strategic decisions that support predictive analytics and demand forecasting. Companies fear losing control of their data for any number of reasons, from baring their operations to competitors to sharing accurate costs with vendors. Some internal organizations see data management as their base of power and are reluctant to be open to external engagements.

Validate Captured Data to Maximize Technology Capabilities

Most organizations don’t have the internal capabilities to support endeavors focused on utilizing emerging technology applications like blockchain. An Enterprise Logistics Provider with deep analytical experience can help you identify and focus on the actionable information that you already capture on a regular basis.

With a trusted partner, your organization can manage its data-sharing strategies to share only what’s required and maintain control of your information, while connecting with the benefits of blockchain.

To find out more about why and how you should share your organization’s data, read our resource guide: AI, Blockchain, Machine Learning: Is Your Data Ready?

Omnichannel: 3 Ways Service Merchandise Got it Right

In its heyday, Service Merchandise was a retail force. With 413 stores and $4 billion in revenues at its peak, the company singlehandedly turned the “catalog showroom” shopping experience into one that consumers flocked to for fine jewelry, electronics, toys, and other merchandise. 

Hindsight being 20/20, modern-day concerns like high inventory carrying costs, the escalating cost of expansive retail space, and the labor-intensive nature of its decidedly non-DIY showroom should have all been red flags for Service Merchandise. Despite these oversights, the company definitely had a few things nailed when it comes to omnichannel. Let’s look at three areas where Service Merchandise excelled.

Lesson 1: Sales in the Front, Fulfillment in the Back

Service Merchandise stored inventory in the backroom versus in the front of the house and basically understood the value of the omnichannel model as far back as the 1980s.

Stores aren’t meant to be fulfillment centers. Employees don’t know how to pack boxes efficiently. They rely on their own judgment about how much packing material and product to load into a box for a ship-to-home customer. That can get expensive when dimensional minimums come into play. For example: If a box is too large relative to the weight going into the box, the shipper is going to overpay. 

Service Merchandise escaped these challenges.

  • All inventory was maintained at the store level, in the back of the house, where customers couldn’t touch it until they ordered it, initially using a clipboard and written order and later using the “Silent Sam” ordering system.
  • Employees were trained on efficient fulfillment techniques: The goods were either sent by conveyor to the customers or shipped to their homes. 

“The average price of an item sold in the store was $30. The average transaction was $55, so we were selling less than two items per transaction,” says Service Merchandise CEO Ray Zimmerman. “Because they were $30 items, it was less expensive for us to handle it on a pick and conveyor basis than it was to stack it out and let the customer pick it up.”

Obstacles emerge when fulfillment creeps into a retailer’s sales floor customer-facing roles:

  • Store employees picking orders instead of taking care of customers. 
  • Aisles congested with big carts and harried fulfillment individuals trying to fill orders quickly. 
  • Online shipments packed inefficiently by store employees untrained in the fine points of fulfillment. 
  • Unnecessary touches: product is received, unpacked, put on store shelves, retrieved, repacked and shipped back out. 
  • Multiple touches create a high volume of dunnage and corrugate waste.

Just think about how far a store employee has to walk to collect all of the items from an online order, versus someone who was working in a warehouse with very high pick densities. Warehouses also incorporate technology (i.e., pick-to-light and voice options) that makes picking and packing more efficient.

Lesson 2: Technology is Integral to Omni-Channel Success.

Retail has come a long way since the 1980s, but it’s clear that Service Merchandise’s leaders had a knack for understanding their customer base and serving it well. They also weren’t afraid to invest in technology long before terms like omnichannel, automation, robotics, and Amazon were common vernacular for retailers. 

“We had a great group of IT people – and that was unique for most companies at the time,” Zimmerman says. “At the time, there was no point-of-sale system that had an alpha numeric. They were programming in BASIC language, it was very simple, but that’s how we developed all these systems.”

Those systems monitored inventory, too.

“We had to keep inventory tight and we spent a lot of time monitoring to make sure that stores were making inventory adjustments,” Zimmerman says. “If they didn’t have any adjustments, the store wasn’t doing its job verifying inventory count; if there were too many, the store was having a shrinkage problem.”

If afforded today’s technology advances, omnichannel data management and its innovative mindset, here’s what a profitable “Service Merchandise 2020” might look like.

  • An early adopter of warehouse automation, it deploys advanced technologies like robotics.
  • Warehouse pickers are equipped with wearable technology that enables them to do their jobs faster in a hands-free environment. 
  • Integrating automated co-bots, conveyors and cranes into its stockrooms, it effectively leverages technology to shorten fulfillment times and hit two-day and one-day shipping windows.
  • Leverage artificial intelligence (AI) and machine learning to optimally determine placement and levels inventory based on predicted customer demand. 

Lesson 3: Give Customers an Experience

Customers like going into stores to look at and touch products. 

Service Merchandise knew that its customers really wanted to experience a product before buying it, which meant stores didn’t really need to have all of their inventory visible and stacked to the ceiling when those customers walked in the door. 

With its part-catalog/part-showroom approach, Service Merchandise was meeting customers where they were in the ‘80s.

“The catalog was not for people to order from. It was an advertising tool – people could pick what they want and come into the store,” Zimmerman says. “If that customer drove 3 blocks to come into our store, they expected to get it. We had to be in stock every day, on every item.”

Many people still remember fondly a key aspect of the Service Merchandise experience, even if the retailer’s dominant presence has faded.

“When the company liquidated, I bought the name to keep it in the family. I put up a website – it didn’t sell much merchandise, but it got a tremendous amount of comments,” Zimmerman says. “Many wanted to tell me how much they loved watching the merchandise coming down the conveyor belt.”

Putting it all Together

Retailers are still trying to figure out the right recipe for omnichannel success. A multichannel approach to sales focused on providing customers with a seamless shopping experience — be it online, on a desktop, via a mobile device, by telephone, or in a brick-and-mortar store — omnichannel is pushing companies into new terrain when it comes to fulfillment, transportation, and delivery.

To help retailers understand how to improve omnichannel performance, we created “Prime Before Its Time: The Service Merchandise Experience.”

Download the guide to learn how the retail innovations of yesterday can help you deliver a prime performance today.

Where is zip code 99999? A Piece of Clean Data Makes a Big Difference

Of course not. It doesn’t exist. In fact, the highest real zip code is 99950, for Ketchikan, Alaska. Still, if you scour your database, there’s a good chance you’ll find more than a few 99999 zip codes. 

Most organizations find that it’s been entered as a placeholder in their shipment database. If shipments go as planned, what’s the problem? If your strategy calls for automating your processes, you’ll encounter serious challenges created by a lack of data accuracy. Let’s talk about how data becomes inaccurate and what you can do about it.

Dirty Data Drives Supply Chain Inefficiency 

Depending on the solutions in use, a database may fill in 99999 if no zip code is entered, or 99999 may have been entered rather than taking the time to look up the correct number. While a placeholder zip code may not be a fatal problem, it’s likely an indicator of deeper issues. That’s one reason industry experts estimate that data is faulty in 35 to 40 percent of supply chain systems.

For example, look at a company’s fundamental systems such as the Item Master, Customer Master and Vendor Master. They must be comprehensively reviewed and corrected. Basic data such as dimension and weights could be filled with default numbers. That means there’s been a lack of validation of the data that’s been input. The lack of accurate, clean data leads to expensive inefficiency through mistakes and a lot of manual handling. 

While individual data problems are not good, they are also a symptom of the more significant challenge of potentially suspect data. Without the right numbers as a baseline, it’s impossible to make accurate strategic decisions. If you’re looking at adding or repositioning distribution centers, rationalizing your product lines, or myriad other initiatives, clean data makes all the difference. 

Clean data is also essential for implementing automation, artificial intelligence and other emerging technologies. Poor data quality can lead to problems with carrier compliance, shipment tracking and predictive and prescriptive analytics. As shipments generate more and more data in real-time, quality data is essential. It’s also vital for decision-making and sharing with strategic partners to drive benefits across your shipping eco-system.

Solving the Dirty Data Problem

How do you correct the zip code 99999 problem in your company? 

The key is to evaluate the integrity of data collection and management programs continuously, not only against your internal requirements but also in relation to external demands. Does your organization have the capability to dig deep into your data collection and management programs, identify challenges and fix them with internal resources? Or will the organizational structures and culture prevent you from making the necessary changes? Third-party analysis may be required to identify the data issues that will derail your competitiveness.

To find out more about ensuring your organization is prepared for next-generation technologies, read our resource guide, AI, Blockchain, Machine Learning: Is Your Data Ready?