Logistics is changing fast - to succeed in 2020 and beyond, companies will have to build their brands through customer experience, digitize the supply chain, and use smart suggestions to plan operations in advance.
"what is the most important success factor in logistics?"
At the 2019 Performance Logistique Conference in Montreal, a poll taken at the beginning revealed some surprising numbers - attendees were asked, "what's the most important success factor in logistics?". With a variety of distributors, 3PLs, and carriers present, the answer was:
This begs the question - why are TMS companies invested in building better and better transportation management tools? Companies like Roserocket in Toronto and Turvo in Sunnyvale have built great transportation management systems, but have neglected what logistics service providers are looking for most.
The biggest takeaway from the event? LSPs are starting to see logistics not just as a delivery mechanism, but as a marketing tool. Technology that allows them to retain and satisfy customers is what is going to win in the next year and beyond.
If there's one thing to take away from the insights at Performance Logistique, its that todays logistics leaders have to be customer experience leaders. Instead of thinking like operations, we have to put on the marketer and customer success hats and prioritize the delivery experience the customer receives - branding, UX, speed of delivery, transparency, visibility.
However, there's a disconnect between the high level ideals of logistics as marketing and the reality that's often in place on the warehouse floor, at the loading dock, and in the front office.
Logistics leaders should then focus on reducing these pain points in their teams by promoting the following:
One way that logistics staff can accomplish this and set themselves up for success is by investing in collaborative logistics. This new model for freight technology aims to centralize communication, and make the customer experience as effortless as possible through the use of bidirectional customer portals to help your end clients track, manage, and confirm accurate delivery of their orders. It encourages companies to pivot from a siloed logistics approach to a unified one around customer experience.
Along with the focus on customer experience, its also critical that today's logistics leaders digitize all aspects of their supply chains. This includes communication, documentation, analytics, and the processes of booking, order, and inventory management. As defined by Salesforce, digital transformation is the process of using new technologies to create or optimize internal business processes and customer experiences to improve market position and meet business needs.
Digitization and customer experience are even intertwined, Salesforce founder Marc Benioff explained,
"Every digital transformation is going to begin and end with the customer, and I can see that in the minds of every CEO I talk to." - Marc Benioff, Salesforce Founder
This means that when you work to digitize the supply chain, you have to do so through the lens of customer experience. This time, you can work backwards - what's preventing you from delivering the customer experience that you want?
Again, these hurdles are the issues of staff being bogged down in manual administrative work, and poor inter-team communication, especially between the front office and the warehouse/loading dock. These obstacles can be worked around though, using digital technologies to improve communication channels and automate manual work.
This digital transformation will also make it easier to gain valuable analytics and insight on both your internal operations and your customers' purchasing patterns. Next-generation software will have to do both - aggregate the metrics that help you measure and analyze your internal performance, as well as providing insight into how customers are receiving the delivery experience that you provide.
This is the golden grail of any supply chain operation - a perfect and harmonious combination of perfect operational efficiency and perfect customer satisfaction. Of course, you'd need a crystal ball to do this - nobody can perfectly predict buying patterns, supplier timeframes, and carrier or driver rates. Anyone that promises to do so is essentially selling snake oil.
However, this doesn't mean that you should be running blind. Logistics leaders will need to embrace the data revolution and use analytics, KPIs, and AI-powered suggestions to predict buying patterns, identify problematic carriers/drivers and lanes, and estimate order lead times. In a commodity market like logistics, this is what will create the biggest wins - maximized operational efficiency (less $$$) and customer satisfaction (stronger brand = repeat business).
This might seem daunting, but the first step towards planning and forecasting operations performance is to collect the right metrics. Great freight technology can help you with this - aggregating and centralizing data across your scatter booking processes, order management systems, and warehouse management system. Only when all your data is in one place can you look at the overall success metrics that really matter - allowing you to track freight spend, lane performance, carrier/driver performance, and inventory turnover in one location.
Wrapping up, there are three key areas that logistics executives need to tackle in 2020 to be successful:
Bringing these elements into your strategy for 2020 can only strengthen your customer relationships and operational efficiency. If you're not prioritizing this, you're already falling behind the leaders.