The demand for trucking is increasing exponentially, so every aspect of fleet operations needs to maximize strengths and minimize errors to keep thing running smoothly. With retail giants like Amazon pushing out products faster than ever before, the idea of speed-to-market is forcing trucking companies to answer not only on quantity but also on how fast they can deliver. Amazon is transforming the fleet supply chain and forcing the trucking industry to adapt.
Speed-to-market has been analyzed to the point that delivery to the store at any price has been replaced with leaner inventory all along the route from plant to ultimate buyer.
— Chuck Clowdis, managing director of North American markets for IHS Global, an economic think tank based in Lexington, Massachusetts.
With competition growing and fuel prices rising, many fleets are rushing to implement strategies that can identify and address gaps in the fleet supply chain well before the customer feels the impact. Innovations taking hold in the trucking industry have all but eliminated legacy software, and new digital resources are in place to help fill the gaps and strengthen the fleet supply chain. A.R. and I.R. technologies are managing end-to-end workflow systems that mitigate human error and maximize operations to consolidate the supply chain. According the Harvard Business Review, the fleet supply chain as we know it may soon be obsolete.
With a digital foundation in place, companies can capture, analyze, integrate, easily access, and interpret high-quality, real-time data — data that fuels process automation, predictive analytics, artificial intelligence, and robotics, the technologies that will soon take over supply chain management.
— Harvard Business Review
Responding to the Industry Dynamic
The trucking and transportation industry is the key to most all other sectors’ supply chains because it moves the product from store to end user or customer and everything in between. So when it comes to the fleet supply chain, the emphasis on efficiencies and speed becomes dual — a focus on fleet operations and a focus on integration into their customer supply chain. That integration calls for strategies that work for both customer and fleet and requires the ability to be responsive to both. LTD Management, a logistics and supply chain management consulting firm, has documented the following strategies to consider.
- Segment. Each shipment does not have the same priority. Products, suppliers, customers, time of the year, and other factors can affect the importance and urgency of transport movements. The strategy cannot be one-dimensional. It should be segmented to reflect urgencies. That can mean mode changes and/or alternative carriers.
- Customer requirements. The supply chain involves continuous and efficient movement of product from vendor to manufacturer to customer. Therefore, the transportation program must reflect and meet customer needs. The time and service aspects of transportation are vital.
- Shipments must move in a timely manner. Customers demand their shipments be delivered as they require — on the date needed, by the carrier preferred, in the proper shipping packaging method, both shipped and delivered complete and in good order. A transportation program that can do this provides customer satisfaction and can give your company a competitive advantage.
- Mode selection. How will products move, by air or surface? What modes will be used? What role does transit time play in your supply chain? How will the inventory and service impacts be measured as compared to the freight charges?
- Carrier relationships. Volume creates carrier/forwarder attention. Even if there is no strategy, the number of carriers trying to get business will require that firms develop one. Infrequent shipping dictates another approach.
The carrier attention with volume creates a competitive interest in your business. But there is another side to this attention, as freight cannot be divided among many carriers, for two reasons. First, fracturing of the freight impacts negotiating or leverage position. Second, too many carriers hinders the ability to develop carrier relationships needed to meet supply chain requirements. Developing supply chain responsive programs demands effort by both the carriers and the shipper. Transportation must be responsive and needs a focus with a carrier — a relationship.
- Measuring/Metrics. It is important to know how well the strategy and carriers are performing. This takes two approaches. One is measuring — comparing performance to agreed-upon standards. What is the actual delivery to customer performance, on a macro basis, and on a carrier and customer-by-customer basis? A macro measure can hide a problem even if the overall measure is good. And, with supply chain management, this means realizing primary customers and delivery locations. A test of measuring costs is how well the transport spend is being managed. Transport performance metrics can provide a way to view the value of the spend.
- Carrier mergers and alliances and closings. This is an important and difficult issue. Firms should understand what is happening within each mode and align the strategy with carriers who will still be viable in the future — often five years since strategic plans may extend that far. A great strategy with a carrier who is taken over or goes out of business can be suddenly not a good strategy.
- Flexibility/Adaptability. Change is happening. It is not a question of whether it will happen. The only question is how quickly it will occur. The strategy should be able to change. New customers, new products, new businesses, new suppliers, new corporate emphasis — each of these can dramatically impact the strategy. The times they are a changing — and so will the strategy.
Clearly, trucking transportation is the most important function in logistics and is critical to both customer and fleet supply chain performance. The factors above are ways to better meet the dynamic requirements of the supply chain. Fleets are evolving quickly to adapt to the needs of the changing environment.
Customer Service’s Role in a Strong Fleet Supply Chain
Because transportation is key to the logistics supply chain, that means trucking is accountable to all aspects of communication along the route. The way that shippers manage customer service matters. A focused and proactive customer service approach makes for stronger relationships and a seamless fleet supply chain. Managing expectations at every turn is critical.
If you deal with customer service at the end of the process, you’re at a disadvantage. But incorporate it into the overall planning, and you’ve got the opportunity to tip everything to benefit you, your vendors, your customers, and your carriers.
— Chuck Franzetta, CEO of Franzetta and Associates, a Boalsburg, Pennsylvania, supply chain management consulting firm
Customer service can also address challenges before they become problems, but to do so requires an integrated supply chain management system. A system that is transparent to everyone can address issues and align different logistics functions in real-time. As the trucking industry evolves with the demand, technology has become essential in helping to identify possible issues in the fleet supply chain and mitigate errors faster than ever before. Adaptability and responsiveness have become a customer service responsibility. Without an integrated supply chain and comprehensive management system, successful and proactive solutions would not be possible.
Automation and Expert Partners
The trucking industry, especially in logistics, is no stranger to robotics and automation for help with repetitive tasks and systems that can be fraught with human error. The industry has already replaced those tasks with automation, helping to better manage the fleet supply chain and its demand. Expert partners like WEX are providing guidance and solutions to tighten labor-intensive tasks like invoicing, purchasing, accounts payable, and expense management. By relying on the expertise of a partner like WEX, trucking companies can make sure the supply chain does not break down as a result of payment delays or inefficiencies.
People may take fuel cards for granted but they have proven to be one of the most valuable ways to tighten and guarantee payment while staying ahead of the unpredictable. Proactive customer service within the trucking industry is just as important as it is delivered by the trucking industry. Companies like WEX can provide control over the spend for fuel and other expenses. And, by delivering transparency in the process, both the fleet manager and the driver will benefit. A comprehensive fleet card program offers benefits including the following:
- Fleet fuel cards with automatic expense tracking, enhanced security, and detailed reporting. Choose the best fleet card for your business.
- Powerful mobile apps to access your account, help drivers find the cheapest nearby fuel, pay at the pump, and more.
- Premium GPS telematics for tracking vehicle location, speed, fuel use, and more — to capture the data you need to keep improving your bottom line.
- Advanced analytics software to keep you informed, help you find new ways to save, and streamline your overall fleet operations.
- A U.S.-based customer service team that takes pride in being there 24/7, always ready to take your call and help you get the most value from your fleet card program.
So you can see that even within the fleet supply chain, transparency and customer service are key. Optimizing efficiencies, from lowering expenses and reducing risk to GPS tracking and advanced analytics, do even more to strengthen the fleet supply chain. WEX helps to maximize payment so fleets can focus on other aspects of the business and supply chain demands — even as those supply chains are becoming more and more automated and less of a chain. As Harvard Business Review has pointed out, “The death of supply chain management as we currently know it is on the horizon.” Fleet managers and owners who are addressing it now are sure to not only survive the transition but also lead the way to success.