Shipping and transportation are typically seen as problems businesses face on their own. After all, no two companies share the same exact supply chain. And several aspects of the industry, like bidding for carrier contracts, are highly dependent on idiosyncratic individual relationships between enterprises. But in the last few years technology has enabled communities of shippers to act collectively in ways that benefit not only the entire shipping community, but individual businesses too.
The key technology providing this benefit is the cloud network. Supply chain platforms built on cloud networks nurture a community of shippers, logistics providers, carriers, and suppliers that brings entire supply chains closer together. But networks also allow shippers specifically to take advantage of some of the unique benefits that come from feeding the same platform.
Here are 3 major ways that businesses can make use of shipper community power:
Internal benchmarks are necessary for monitoring performance, but they don’t offer a complete picture of how a company is doing in the larger external world. Until the rise of network platforms, there was no way to get a real sense of how external entities–ports, lanes, other businesses, etc.–were doing. Platforms provide a central information hub where data can pool together to reveal insights into larger issues.
For instance, if businesses can see an aggregate view of transit times, dwell times, and performance, they can compare how they are doing against the larger community. This can influence their decision-making: perhaps rerouting shipments to a port previously not considered, but used by others, can improve transit times. By looking at how an entire community is performing, it’s possible to identify patterns and trends that can be of high business value.
During the West coast port slowdown, UPS relied on network platform data to not only provide its customers updates about delays, but also detailed updates about dwell times and transit times and the health of the ports involved. This allowed for better dialogue and decision-making consultation with UPS’s customers, thanks to community data.
2. Feeding analytics
The other aspect of network technology that’s fostered community advantage is the fact that platforms grow larger and more powerful with user data.
The most visible example of this is Google. By collecting information about what people are searching for, Google can deliver better results to any given user. Search results combined with user preferences enable customized, personalized, predictive information for individuals through features like Google Now.
Similarly, in the case of supply chain platforms, information about what features businesses want and what functionalities are most used can work to improve the platform and its analytics capabilities. The result is a virtuous cycle, where community users are constantly providing feedback to the network, and the network, in turn, is feeding the community with new tools and analytics to improve performance.
The important thing to note is that this kind of community data analysis can be done while protecting the private, confidential, sensitive information of individual businesses.
3. Sociopolitical influence
While shippers often have different and competing priorities, in several instances, like transportation, their interests overlap. Seeing transportation infrastructure improve across a region is beneficial not only to one type of business, but all who rely on that region for transportation. Given that, shipper communities can wield political and social power to ensure that the transportation rules, regulations, and infrastructure of a given region work to the benefit of everyone involved, including the customers.
For instance, legislation involving transportation is often treated as a separate issue from those involving environmental policies. But as shippers are discovering, customers increasingly care about carbon emissions and transportation efficiency. Creating transportation infrastructure that not only is more effective but also more sustainable is something that the collective power of shipper communities can push for.
With the fusion of physical, financial, and legal supply chains in technology platforms, communicating and organizing together around influencing smarter policymaking is something shippers can now do, while having the data to back up their arguments. The results benefit everyone, from shippers to customers and the entire supply chain as a whole.
Kotahi, in New Zealand, successfully worked to improve the infrastructure of the country’s ports. Through collective action, the shipper communities can improve infrastructure and sustainability on a much larger scale.
The power of community also extends to changing industry culture. Procter & Gamble identified the potential to save up to $35 million in detention and demurrage fees by rethinking the concept of “free time” as “prepaid time” and re-evaluating how processes and negotiations could be made more optimal from that perspective. P&G has since advocated the entire shipper community to rethink “free time” as “prepaid time” in order to reap the similar efficiencies.
The world of supply chains has shaken up considerably since the proliferation of information technology and globalization. Many times, the added complexity seems daunting in contrast to the simpler days of one-to-one dealings. But as network technology evolves, bringing shippers and their partners closer together, there’s actually tremendous advantage that comes from community engagement. Not only can individual businesses reap the benefits of feeding analytics platforms and benchmarking themselves against real world information, but they can work collectively to tackle larger projects like infrastructure and sustainability that require collective effort and persistence.
Suhas Sreedhar is Manager, Supply Chain & Technology Thought Leadership at at GT Nexus, a cloud supply chain provider that connects shippers and their trading partners on a global network. Suhas writes frequently on technology, supply chain, Internet of Things, retail, and manufacturing. His work has been featured in Forbes, IEEE Spectrum, and various industrial blogs and trade publications.