Collaborating on Supply Chain Research

Is there a greater need for supply chain research today than in the past, and if so, why?

That was my opening question to Steve Raetz, Director of Research and Market Intelligence at C.H. Robinson, in a recent episode of Talking Logistics titled, “When Shippers, 3PLS, and Universities Collaborate on Supply Chain Research.” Here’s a snippet of Steve’s response:

What we’ve seen over the years is transportation, logistics, and supply chain moving from being back-office, required functions to being very strategic. We’re now seeing the leadership team — the C-suite and Senior VPs — becoming more and more involved in supply chain and logistics decisions. And as supply chain and logistics have become more strategic, understanding what are the best practices and behaviors of the broader market is really important and of most interest to the senior leadership team.

Most companies have done a good job of taking waste out of their supply chain already, so what they want to learn now are the best practices to really optimize it, and that’s why research is so helpful.

C.H. Robinson has partnered with several universities to conduct industry research, including MIT’s Center for Transportation and Logistics, Iowa State University’s Supply Chain and Information Systems department, and the University of Minnesota’s Carlson School of Management Supply and Operations team. I asked Steve why they chose to partner with those universities, and why didn’t they just conduct the research themselves. Here’s part of what he said:

The reason we chose MIT and Iowa State is that they really like transportation. We found that not all supply chain programs have faculty members that are really passionate about transportation, and thus far, a lot of the research we have done has been in transportation. The University of Minnesota is close to our headquarters and they have a very strong research faculty base there as well.

There are a number of reasons why we partner with universities to conduct research instead of doing it ourselves. The first is bias. If we did the research on our own, I think our customers and suppliers, our carriers, might have a little concern about there being some bias in the research, and so by using a university or other third party we can minimize that concern.

Another reason is talent. Some of the econometric models that we create and the large data sets we use require some modeling tools and talent that, quite honestly, the academic community is very adept at providing.

Better understanding the behaviors of the marketplace is another reason. We have experiential knowledge; the research helps us understand the magnitude of those experiences. So we say, “This is the behavior we typically see, but what are the drivers that create different levels of magnitude of that behavior, minimum side to maximum side and so forth?” and that’s a real benefit we get from doing this research.

Watch the short clip below where Steve shares some examples of the research they’ve conducted and the benefits and insights the projects have provided.

One of the projects, for example, was with Iowa State University called Stale Rates. “It dealt with truckload procurement strategies and understanding how fast truckload prices age,” said Steve. “It answered questions like ‘Are rates good for a year or less than a year?’ So we answered that question and the benefits of a frequent procurement event, of going to your carrier community with a frequency that creates value.”

I encourage you to watch the rest of my conversation with Steve for additional insights on this topic, including his thoughts on the best way to communicate the research results with the supply chain community and his recommendations for companies looking to enhance their supply chain research capabilities.

Do you agree that there is a greater need for supply chain research today than in the past? What research questions do you have? How are you finding the answers? Post a comment and share your perspective!