By: Mitch Bernet, Partner/CEO, Atadex
Operating within the Supply Chain can be very challenging. Historically, it has been a high volume, lower margin business that depended a lot on manual entry of information. Errors or abnormalities in the shipment process often took out all of the profit in handling that shipment. It was always a challenge to find ways to improve profitability on a day-to-day basis.
In running operations for many diverse companies like APL Logistics, Hub Group and eventually at Coyote Logistics, I always found that the more effective we could make our employees, the better they were able to take care of our customers, and our business grew as a result.
Customers are very demanding as they are tasked with keeping costs low themselves. This leads to lower inventory levels, fulfillment in many instances relying on inbound shipments and just in time delivery. As you can imagine, this can lead to many stress-filled days. This requires that the Supply Chain work the way it was designed. It has to work through driver shortages, capacity constraints, bad weather, traffic and whatever else can come up along the way.
As frontline dispatchers and customer service representatives try to manage all of these moving parts in a shipment, there is only so much time in a day to get things done. As a result, one of the key performance indicators that we always used in measuring performance was shipments per person, per day. We knew that when a dispatcher or CSR got to a certain number of shipments that they were tracking, tracing, updating records, scheduling appointments, advising customers on delays, etc., that they simply could not do any more. Service would suffer if we did not add another person to the group.
In an effort to improve efficiency, companies moved to new Transport Management Systems (TMS), but those systems required an even greater amount of order entry than was done previously. At that point, we found that the loads per person per day actually went down. We could not afford to keep adding people to the business. I’ve yet to come across people who work as hard as those in logistics and transportation. Good ones are not easy to find, and very difficult to replace. We needed to make the jobs better, more satisfying, and give our people the ability to do the great job that they wanted to do without having to work 24/7.
That is when we put a full-court press on getting as many of our customers and our carriers on EDI that we could. As the EDI increased, the need for manual entry was reduced. This not only improved our ability to handle more shipments per person per day by nearly 25%, but it also improved our data accuracy to close to 100%. No more data input or transposition errors, while giving our people the time to really take care of the customers. In effect, it supercharged our TMS, and the gains in terms of service performance and customer satisfaction were not only incredible, but sustainable.
Our employee satisfaction went up, as they were able to spend the time managing the problem shipments, as the system took care of the ones going on time. In an environment where profitability is measured by accuracy of information, avoiding accessorial charges and being on-time, EDI delivers on the promise that your TMS provider said you would see by automating your processes. EDI doesn’t make your TMS. EDI makes your TMS better.