Transinnovate offers solutions for a logistics control tower, both the required software system and also the service. Because it is a buzzword, on this page we clearly explain why a control tower is useful, what it requires and how Transinnovate can help shippers with it. If you would like to spar with us about what a control tower can offer you, please feel free to contact us. contact on.
Why a Control Tower?
If your company trades or produces physical goods, transport is essential to your operations. It cuts directly into your commercial margin and has a direct impact on your customer satisfaction. After all, in case of late delivery, delays or transport damage, your customer calls you, not your carrier.
Often, when looking for improvement, companies focus on their primary process, and transport is an underexposed aspect. "It's running, and we have other projects now" is a common answer. A lack of overview and up-to-date data is often the reason why this is not tackled decisively. If there is no data to steer on, steering is automatically very difficult.
Experience shows that a control tower can save 10 to 15% on transport costs. You can also address quality issues with transport in a more structured and proactive way, instead of a gut feeling. Up-to-date data from your transport operation can also spot problems elsewhere in your process. An increase in the number of urgent shipments, for example, could be a sign that there are problems in production. So there is a lot to gain for companies.
What is a Control Tower and what does it require?
The term control tower is derived from air traffic control in a 'control tower' with central oversight handling air traffic as efficiently (and safely) as possible. This is all about 1) having information and data, 2) the ability to direct and 3) tight processes and clear responsibilities.
Information: It should be obvious that when controlling aircraft, having up-to-date and correct information is vital. Although there is usually no literal vital information in transport, again, having up-to-date, complete and correct data is a must if you want to be able to control carriers properly. However, many shippers accept that the information is not up-to-date (monthly reports and carrier invoices come afterwards) and not integrated. It is often spread across an own ERP system (customer orders) and transport orders in the email or in the portal of (multiple) carriers). So a good control tower ensures first and foremost that there is up-to-date and complete data on customer orders, transport orders, costs and quality in one central place. Here, a Transport management system (TMS)solution for shippers. A TMS provides much better data than a (often rigid and limited) transport module in an ERP that often only focuses on sending out a transport order. This can be detailed data, but also monthly reports with information from several carriers directly in one clear dashboard or report.
Steering: If the data is there, then you can start steering. There has to be the ability to do that. You have to have knobs to turn. How do you record what goes well and what doesn't? What can you do differently if things don't go the way you want? That starts with smart transport procurement (transport tendering), where our advice is to choose the right mix of carriers (i.e. more than one) that ensures a cost-effective but also robust operation. Being well organised in advance makes good management a lot easier. Again, a good TMS ensures that the possibilities for steering are in the same place as the data. For each shipment, there is then immediate insight into the options in terms of costs and delivery time, there is insight into which orders require urgent action and there is the possibility to record quality problems immediately.
Clear processes and responsibilities: With a TMS, the information is available and there is the ability to control. This often brings the trickiest part into the picture, namely the knowledge and discipline to actually take control. Good tools are half the battle, but the other half is discipline and skill. Air traffic controllers also receive thorough training for a reason, and work according to tight processes and clear responsibilities. This is often underestimated in transport management. For both internal and external stakeholders, it must be clear what their tasks and responsibilities are, and how work should be done. Here, someone needs to take the lead to oversee this. Analysis of key performance indicators should lead to the right actions and steering of internal operations and logistics service providers.
Outsource or do it yourself?
Especially because of the latter aspect, a control tower is still sometimes outsourced. This has advantages and disadvantages. An advantage is obviously that shippers do not have to invest in a TMS themselves and that the hired specialist frees up capacity for it. A disadvantage is the independence of the external specialist, and transparency. 3PL and 4PL parties often have agreements with carriers which means they do not necessarily use the best carriers in the market. In-house cars may also be used for the wrong reasons. Depending on the business model, service providers do not necessarily make the best choices for their customers (conflict of interest) and there is often not full transparency. The margin demanded by a 3PL/4PL also leads cost-increasing compared to doing it yourself, and has to be weighed against investing in a TMS and time yourself.
Doing it yourself means investing in people and resources yourself, but it is always the most transparent, leads to the most direct grip on the transport operation, and gives the most flexibility to change carriers if that is better because of quality, costs or market developments.
How can Transinnovate help shippers
We can support shippers in all steps of the process concerning a control tower. This starts with good organisation and smart buying, so that there is something to choose and control. We also deliver modular and low-threshold TMS solutions that make transport management software available to small companies and SMEs. This gives you access to up-to-date and complete information everywhere, and the ability to take immediate action. We can help you define processes and responsibilities and train your staff to manage them effectively. Finally, we can also relieve you of all your worries by offering the service of managing your Control Tower. Our knowledge, experience and independent position (no agreements with carriers and no own means of transport) ensure that we can help you realise your goals transparently and effectively.
This is how we help you on your way to maintaining a healthy margin and satisfied customers (optimal transport costs with good quality).
To learn more about how we can help you reduce your transport costs, feel free to contact us.
