What do Asian GDP, Your Commute Home and Supply Chain Analytics Have in Common?
by Andrew Donaher
February 6th, 2015
What is one of the biggest influencers of transportation volume in Western Canada? Asian GPD. Depending on the time of year and value of Asian GDP (heavily influenced obviously by China) so goes transportation of goods in Western Canada. The economic performance and seasonality have a tremendous effect on the types of goods and direction of traffic. Whether coming or going to/from Northern Alberta, the Prairies, or Central Canada, the road, rail and waterways are often near capacity.
SupplyChain247 just promoted an article by Chris Ziegler of The Verge on the state of transportation in the US and the future outlook: "6 Reasons You Should Be Terrified About the Future of Transportation“. This article focuses on the United States and draws mainly on, as the article states, "The US Department of Transportation (USDOT) just released 'Beyond Traffic,' a study best described as a dire warning about how the country’s arterial lines will clog and implode over the next several decades." In my view, this serves as a proxy for the state of transportation in Canada.
Closer to home here in Western Canada, a paper by Jonathan Arnold, "Congested and Nowhere to Go: Congestion, Road Infrastructure, and Road Pricing in Metro Vancouver” estimates the cost of congestion in Metro Vancouver, "when adjusted for inflation, the range increases to $0.9–$1.5 billion today.” A bit low based on some of the research I have seen but you get the point, it is real money as they say.
These facts refocus our attention on why Supply Chain Optimization and Transportation Optimization are so critical especially in the current economic state. Yes, while oil is low gas prices are low which is a savings on Op Ex but this is the time when need is highest to drive greater cost savings from transportation optimization and route sharing. There is more to save than just the cost of fuel.
So what does this have to do with Business Capabilities and Information Management? An organization’s ability to integrate information into the decision making process and optimize decisions in an effective and repeatable way is the key to achieving those possible savings. The ability to slice and dice, analyze and optimize transportation information can bring direct bottom line savings to your organization in relatively short order.
We worked with one retail organization in Western Canada and built seamless interfaces to synchronize information between the Transportation Management System and Warehouse Management System to support the business process for delivery route planning. The results helped in a variety of areas spanning from transportation savings and load sharing, to customer satisfaction with more accurate delivery times.
I often see organizations struggle with Supply Chain Analytics because their inability to access trusted information in an easy-to-analyze way. Throughout my career, I have seen organizations battle with transportation issues resulting in large, unnecessary emergency and fill rate costs. There are various reasons for this; however one of the key reasons is an inability to gain visibility into the comprehensive Supply Chain (including Demand Planning & Shaping). I have seen organizations achieve success in driving out the savings from low hanging fruit and then begin self-funding more sophisticated forecasting and demand planning and optimization capabilities.
An initial statement for an organization exploring solutions should be “I need the ability to...”
Not, “I need a report and a dashboard that …” The opportunity is there for the taking but the bottom line is: it requires access to trusted information.
comments powered by Disqus
