We have all seen it. We have all heard it. Perhaps many, or most of us, have even participated in the ongoing debate over which is more critical, transportation planning or transportation execution? Some trivialize planning as something generic and focus on the hard realities of execution. Others advocate the basic principle that a better plan leads to improved execution. In typical Canadian fashion, I would and will argue that the answer is somewhere in the middle.
Where the Money is
The first premise I want to establish is that planning is where the money is. While there is absolutely value in auditing freight bills more efficiently or having more effective ways to communicate with carriers, the bulk of the value proposition for any transportation initiative lays in the ability to plan better. Whether it is through improved consolidation, increased asset utilization or just better carrier and equipment selection, the math is clear. Clearly, this establishes the importance of effective planning as any incremental improvement in strategy sophistication creates a direct increase in potential value.
The Flaw in the Logic
The counter argument for a focus on effective transportation planning is that the best plan falls apart in the face of the realities of execution, whether it is unavailable capacity, limited dock space or order variability. On the surface this makes complete sense until you consider the flaw in the contention. It assumes that there is a disconnection in the consideration of constraints between planning and execution. Unfortunately, this is exactly the challenge with most transportation solutions.
The ideal is for a solution to consider active execution level constraints (dock capacity, throughput, available carrier and fleet capacity, etc.) concurrently during the planning process. While not everything can be anticipated, there is much that can and the more that is considered upstream allows for the enablement of more complex strategies, greater value realization, and minimal user intervention.
Iteration and Postponement
In addition to the concurrent consideration of active constraints during the planning process, additional challenges that create a clear disconnect are the active variability of those constraints during the time lag between the planning and execution processes and the missed opportunities due to a lack of visibility to new orders and order changes. To effectively deal with these challenges a transportation solution has to move beyond the traditional approach of “point in time” optimization to a paradigm of more active iterative planning where plans are incrementally adjusted and improved based upon the visibility of new orders and order changes within the network. This does not preclude of course the consideration of network constraints but instead implies the creation of true interoperability between planning and execution where those constraints change dynamically through time.
The benefits of this approach are multifold. First, it reduces the latency between the planning and execution domains which subsequently reduces the variability between the two and creates actual realised value. Second, it creates a notion of resiliency through the ability to sense and respond to inevitable order variability and disruption. Lastly, it provides the opportunity to create consolidation and utilization opportunities that were previously not possible.
Do it Right
In the end, it’s not about planning or execution. In the world of transportation, the two are intertwined and consequently, to achieve the ideal of value maximization, solutions must bridge the gap. They must allow constraints to be concurrently considered during the planning process, planning should be iterative and not static, and planning must be interoperable with the variability of execution.