American Shipper recently released its annual benchmark report entitled “Global Transportation Management Benchmark Study: Climbing the Visibility Sophistication Ladder.” The study surveys practitioners from a variety of industries as well as a cross section from a diverse organizational scale.
It is an excellent report covering a number of pertinent industry aspects and challenges around developing visibility sophistication globally. There were a couple of points in particular that struck a chord with me and that I think deserve some additional commentary.
One of the views measured and expressed in the report is the difficulty that practitioners have in defining and quantifying the value created by improved network visibility. When looking at other aspects of transportation process such as consolidation and routing opportunities, the measurement is quite simple. Instinctively, it is clear that there is value but how do you express it?
The first proposition I have is that it is easier to define value for visibility when you can define it in terms of a tangible supply chain problem as opposed to just the ability to “see” data. For example, if having improved visibility of global inbound freight can drive a scenario where I can perform in-transit re-allocation of demand, based upon consumption changes; it frames a scenario that is less vague and more easily measured. In this context, value is driven through increased sales, reduced inventory and improved margin attainment.
Secondly, and as an extension of the first point, the value of visibility is better measured when it is actually actionable rather than static. Using the same example, if better visibility can not only lead to a better decision but to an automated set of workflows, then the definition of value becomes significantly clearer.
No Escaping the Need for Data
Another view measured and expressed centers on the availability, timeliness and accuracy of network data. The section is very well represented and the results panned out much like I would have expected. Focused on visibility data, it shows that the majority of respondents consider that accuracy and timeliness is important and they are actively working on incremental improvement. While the study logically focuses on data in terms of visibility, there are other aspects of data in the context of global transportation that will continue to grow in criticality. Most notably, as technology evolves and as shippers become more sophisticated, the importance, granularity and accuracy of data increase proportionally.
Take the example of the emergence of advanced load building technology. The optimization of the loading of ocean containers presents a very significant value proposition both from a monetary and sustainability perspective. While this type of optimization requires a level of data that is very difficult to obtain, this is exactly where large shippers are headed.
Going Truly Global
On a final note, the report speaks clearly to shippers expanding their reach globally, whether it is by focusing on global regional deployments or improving their intercontinental flows. As this trend continues, the role of technology will grow along with it, whether it is in the adoption of more sophisticated capabilities or in the ability to model the nuances of disparate and emerging markets. In the former case, data availability and accuracy will be one of the biggest roadblocks. In the latter case, understanding the fundamental operating principles of a region will play an important role in driving success. In either instance, there is tremendous value to be driven in a domain that is still relatively unpenetrated.
Click here to download the complete report and get more insight on how shippers and 3PLs define visibility, the quality of the data that underlies that visibility, and the degree to which their global transportation management platform covers global growth. Please let me know what you think about the importance of sophisticated visibility on a global scale.