One of the reasons smaller logistics businesses are data-poor, according to Transport Intelligence, is that technology is expensive. As Ken Lyon, author of the piece, points out, this idea that technology is prohibitive is old, out-of-date and downright damaging. It’s true that 15 or 20 years ago, an IT project designed to collect and analyse data from business operations was a lengthy and costly undertaking. The world is now a very different place from that of a few decades ago.
The benefits of technology are now routinely available at a fraction of the cost they used to be. Data and applications can be kept in the cloud and accessed from anywhere in the world. Similarly, data can be fed into centralized systems from anywhere in the world, in real-time. From Amazon to Uber, most of us experience this phenomenon so regularly that we no longer even think about it much.
So what’s holding back trucking logistics companies from getting on board with digital transformation?
In his article, Lyon lays out several interconnected reasons in addition to the fear of cost, including a lack of skills within some businesses. The skills he’s referring to, revolve around an understanding of new trends and pressures in the market, and how to respond to them. For many business owners, he argues, the pace of change in recent years has simply been too brisk for them to keep up. Hiring senior execs with the new skills they need means handing over too much responsibility – something old-school business owners are not always happy about.
It’s an interesting point of view and, once again, it demonstrates how old fashioned views can be harmful. But some of his most damning assessments are concerned with the way some businesses deliberately stay away from potential improvements.
Keep your visibility hidden
Data-powered route planning has been a significant benefit to the delivery sector. It has saved time and money and made it possible for businesses to retain more margin. But it only really works for those businesses who make use of it fully.
If there’s a problem with a shipment, or with a driver, or perhaps with a vehicle it is possible to recalculate an entire working schedule at the press of a button. The data can also reveal operational problems – a warehouse that ships slower than the others, a driver who gets more complaints, and so on.
That data is only useful if you do something to fix the problem. According to Lyon, “This operational transparency causes apprehension. The fear is that any mistakes they make will be instantly visible to their clients and operating partners.”
He continues: “Simply put, they do not trust their ability to perform.”
This is a bleak assessment of the management capabilities in some smaller delivery businesses. However, if you reverse all of these worries and fears, the benefits of investing in digital technology become clear.
If you want to be the kind of business that fixes its problems proactively and, more importantly, uses that proactive fixing as a way to impress your partners/customers, you need fully transparent operational data. In today’s interconnected world, where information is always readily available for anyone, it is wiser and more strategic to commit to full transparency than to fall on old habits and run the risk of being considered too “old” to compete.