Steve Twydell of 3T (www.3t-europe.com) explains how technology is revolutionising transport management.
It’s the million dollar question in logistics – how can we maximise vehicle utilisation? Achieve this, and the rewards will be bountiful: from reduced costs, to improved service levels, to reducing the number of freight vehicles on the road.
But, like most really important things in life, the ‘what’ is easy – it’s the ‘how’ that causes the real headaches. Some suggest that collaboration is the most viable way of optimising transport but I have yet to see many examples of true collaboration in action or have any significant impact. There is a better way – the application of technology in the form of artificial intelligence.
Time for a cultural change
The logistics industry is the perfect arena for the application of some of the amazing technology that we now have access to. However, the sector has traditionally been slow to take this on board. While a lot of technology has been trialled, the actual organisation of transport on a daily basis is so variable that few systems have had the capacity to cope with the flexibility required.
However, some of the big users of transport such as car manufacturers are driving a requirement for change, looking to take control of their transport operation. For example, Honda is now using 3T’s latest technology to bring transport processes in–house, managing several carriers with fewer people while saving money and improving service levels.
The emergence of smartphone and tablet applications has been a major game changer, but according to our research with 500 carriers, many are confused and unsure how to move forward. Part of the problem is the number of diverse systems with no common operating platform that smaller systems can link in to. Many transport management platforms are US centric and not really designed for the European market with its numerous tariffs, differing currencies and historic road system. SAP is one of the few European platform options, but its processes are limited and it is very much a shipment administration system.
The human face of technology
The Oxford English Dictionary defines artificial intelligence as ‘the theory and development of computer systems able to perform tasks normally requiring human intelligence’. Now, for the first time, transport management systems have the capacity to replicate the infinite knowledge of the human brain. However, unlike even the most talented transport manager, a computer can deal with hundreds of locations at the same time meaning that AI can now be used for day to day planning, not just strategically. The new breed of systems can work with all the variables, operating in real time, making changes and identifying optimal usage instantly.
Smartphone applications do present a dilemma for companies that have spent millions of pounds investing in sophisticated systems which are already outclassed by applications which cost a few pence to install and as little as £5 a month to run. This can cause problems where capex expenditures and budgets have been put in place but have not yet recovered their investment – with the result that finance departments are sometimes blocking the advancement of technology because they cannot grasp it.
Today, a smartphone app can track a shipment, not just the vehicle, offering real-time information and real-time data. As a result, the culture is changing. Honda is just one of many large organisations looking to take control of their operations by implementing this type of system, rather than handing transport over to the big 3PLs.
Measuring true utilisation is always difficult, but in our experience most vehicles are underutilised by around 40%, so having the knowledge to manage vehicles in and out of places, similar to the Uber app for taxis, but including control systems and service controls at the same time has the ability to revolutionise the industry.
Companies like Amazon, eBay and PayPal understand technology and how it can change the way operations are managed. It’s time for the transport industry to apply some of this understanding, combined with a little imagination and a clear vision to take advantage of the fantastic benefits that technology can offer us.