Guest Opinion: Collaboration, Continuity, and the Cloud
May 25, 2012 - SCMR Editorial
Editor’s Note: This is a guest opinion piece submitted by Bryn Heimbeck, CEO, Trade Tech
Remember playing the game of telephone as a child? One person whispers a phrase into the ear of the next person, who repeats it to the next, and by the time it gets to the last person, it’s often become unrecognizable.
What’s fun for children is a nightmare for the international supply chain. In today’s complex logistics industry, there are so many hand-offs and so many participants who each have a variety of responsibilities and tasks to take care of. Messages get garbled, emails pile up in inboxes, and people at one end have no way to quickly learn about sudden changes at another end. We need a system that allows people to work together.
That’s where cloud-based computing comes in. With the cloud, every handoff is automatically recorded, and everyone involved can see it—the manufacturers and suppliers, the freight companies, the truck dispatchers, and the buyer. Every change made to an order or a delivery is instantly available. It’s a continuous, integrated, end-to-end system, where buyers are assured that what they order is what arrives.
But it’s not just about visibility. Each member of the supply chain cannot only see what’s happening, they can also step in. The buyer can change the order at any time by entering it into the cloud-based system. All the other members can see what was done, and the appropriate parties can confirm that they’ve followed through.
In the old days, Ralph had to tell Emma to tell Sven to load the size 9 ½ shoes, but leave back the size 8. With the power of the cloud, all three are on the same system. Ralph can change the order to eliminate the size 8, and Emma and Sven can see that it was done and proceed accordingly. In other words, they spend less time corroborating and more time collaborating.
The supply chain process has traditionally relied heavily on specialization. At each point along the supply chain, we have people with particular expertise and their own system. A salesperson comes back from talking with importers, learning about their business needs and negotiating their requirements, and then has to update all the people in the organization. They each, in turn, have to memorize the tasks they’re responsible for in order to serve the customer. For instance, the operations manager creates the shipment based on his or her interpretation of what the salesperson reported. Separate systems, minimal visibility. That’s why traditionally supply chains are set up with lots of room for error—which adds to the overall costs for everyone.
It’s much better if the salesperson can be part of a continuous environment, one in which that sales role is carried forward by others. With the cloud, there’s only one master copy of the information, which everyone involved can see. The salesperson enters into the cloud-based system what he’s committed to the customer. Then, when the orders are made, they’re made against the very same quotes that salesperson gave to the customer. No need to re-key data or reinvent the wheel. And the customer can tweak the order as needs change—as soon as the customer hits save, that tweak is instantaneously visible. This system is much more flexible and responsive at all levels.
Interesting things start to happen when people don’t have to spend so much time figuring out what happened and transmitting that information. They’re freed up to step in and solve problems right away. Suppose a truck driver misses a delivery. In the old days, the driver had to inform the dispatcher, who had to notify the origin traffic department, which had to get in touch with the destination traffic department. With a cloud-based system, the destination traffic department can immediately see that the driver missed the delivery, figure out what’s needed to fix the situation, and make it happen.
By eliminating so many intermediary steps, information reaches the appropriate decision-makers all along the supply chain much more quickly and more accurately, giving them more control and a greater ability to change direction when necessary. Inventories can be smaller, responsiveness to demand can be faster, companies can quickly take advantage of rate discount initiatives from carriers, and cargo can move around the world much more smoothly. And end customers are more satisfied, because they’re much more assured of getting what it was they wanted.
Consider just one of the features that cloud technology enables: online bookings. Online bookings represent a significant step forward, tying the seller to the logistics process and to the buyer. Blue Cargo Group has had a lot of success since they implemented our collaborative online booking system about six months ago, so let’s use them as an example.
In the old days, booking cargo to travel from Shanghai to Chicago would go something like this: a factory in Shanghai would contact Blue Cargo Group’s Shanghai office, which would then send a booking confirmation request to its office in Chicago, which would then coordinate with the local importer to confirm the booking. Once the importer confirmed with the Chicago office, the Chicago office would notify the Shanghai office, which would inform the factory and make the booking with the carrier. In other words, it was a giant game of telephone.
Today, the factory makes the booking online: immediately, the importer in Chicago gets an alert and can authorize the booking. The Shanghai office of Blue Cargo sees the authorization and makes the booking with the carrier. It’s all a lot simpler.
“This process has made us all highly efficient, streamlining not only for the shippers, but the consignee by eliminating the different time zones in the process to our customers on a global scale,” notes Paul Selvage, vice president of Blue Cargo Group.
The benefits are clear: a continuous system based in the cloud speeds time to market and enables companies to increase the volume of their business and meet more complex requirements.
And we can save the telephone game for our kids.
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