Control the Christmas business with the telephone and paper lists, while giving customers information about the status of their transports at any time? An idea that drives the beads of sweat on the forehead of dispatchers. Telephone conversations have long been an important source of information in logistics. However, they are now too slow for the organization of transports! This is because they do not transmit any data – and thus slow down complex networked logistics chains. The high volume of goods in 2021, on the other hand, can only be controlled and safely managed with real-time data.
To handle large volumes, logistics processes must run so quickly and precisely that they resemble the production of a machine. Forwarding networks and system cooperations have been working on this with great success for more than two decades. Information is their most important resource, because it enables the planning and control of logistics services. If important information is available too late or incomplete, process quality suffers and, consequently, performance suffers as well. An effect that was described this spring with the term quantity tsunami – because the wave of goods reached freight forwarders and logistics service providers too quickly to adjust their planning to it. They were unable to expand their capacities in time and to procure the necessary resources either quickly or cheaply. This resulted in further disruptions that continued to destabilize processes. With real-time data as part of the solution, these disruptions could be quickly contained, is the thesis to be tested.
Fluctuating volumes shape logistics
Logistics service providers have built up structures that make it possible to procure resources as needed and to control processes dynamically. Within a broad fluctuation corridor, this production functions extremely stably. The higher the capacity utilization, the more important it is to be able to optimally utilize existing resources. In this case, precise planning, and exact control, along with perfect process knowledge, become critical success factors. Two tasks that require fast and precise information – and thus at least real-time data. Early and binding order notifications would even be ideal, allowing more preparation time. After all, a freight forwarder can only optimally plan its local transport when it has the exact order data. This data determines which shipments with which dimensions and weights have to be delivered at which times to which locations – the basis for the formation of efficient routes and thus also for the best possible utilization of the trucks. If dimensions or weights deviate from the order data, a correction via mobile apps by the driver directly on site ensures the quality of the processes.
Extremely large quantities overtax processes
To be able to work economically, logistics specialists plan with capacities and resources that they can usually safely utilize. In doing so, they consider order peaks and keep additional resources available – within a framework that experience has shown to be appropriate – which they can call up at short notice. All processes are optimized for this economically worthwhile framework:
- spatial transhipment capacity
- required staff
- fixed urban fleet
- regular relations
In addition, vehicle capacities can be additionally increased in the event of higher utilization via partner networks or the spot market. Staff scheduling also corresponds to the expected capacity utilization. In day-to-day business, however, this means that local transport and delivery must be managed with the resources then deployed. Optimal utilization of these resources can only be achieved with real-time information from the ongoing process.
Clear communication improves utilization
Why is a fax too slow today? After all, sending a document only takes a few seconds. The answer is simple: A fax must first be processed, the document transformed into data and integrated into the logistical process. In addition, a fax only reaches one recipient at a time. Logistics processes in complexly linked value chains require the direct provision of information to several partners for efficient control. This is because they link processes, which always involve several participants, via various interfaces:
- Consignor, freight forwarder and carrier for the collection of a consignment
- Carrier and freight forwarder for the handling of the packages
- Freight forwarder, carrier, and consignee for a successful delivery.
In addition to the vehicles as a resource, scheduling agreements and customer priorities must also be reliably considered in dispatching. Maintaining these at all times requires proactive communication in the event of any process disruption. The faster and more precise it is, for example via mobile apps, the higher the chance of a successful adjustment.
Why premium products increase pressure in large volumes
The critical points in logistics chains are at their interfaces. Where goods are physically transferred. An example: If a main run is delayed in reaching the freight forwarder, this not only jeopardizes the punctual delivery of a deadline shipment loaded on it. The delay easily calls into question much of the local transport planning. After all, for economic reasons, the service provider must try to deliver shipments with promised deadlines via regular local transport for as long as possible, because special trips destroy revenue. With these priorities, scheduling must in turn provide for additional flexibility - which can only be achieved at the expense of vehicle utilization, thus reducing the buffer for higher volume. In this poker game between economical order processing and efficient resource utilization, dispatchers can only prevail with precise information. They must be able to clearly see whether prioritized shipments can be handled on time, ideally by the estimated time of arrival (ETA) of the main run at the forwarding terminal. The same applies to handling staff: they need clear information about which unloaded packages will not be delivered on the same day – so that they can be temporarily stored outside the core areas. Likewise, every driver needs clear instructions on when he must deliver certain shipments in the course of his tour – because the deadline order or the opening hours of the acceptance point require it. Information tasks that mobile apps perform with ease and that make the overall logistics process much more stable. With this knowledge, the resilience of the processes improves even with high volumes.
Real-time information facilitates the handling of large volumes
Information is the key to control. Those who can adjust to disruptions with precise status data from the running process also handle large quantities more easily and efficiently. They have the decision-making basis for activating process alternatives in good time and can utilize their resources as efficiently as possible. Mobile apps effortlessly close the communication chain.