In part two of our series on connected shipping, we look at where respondents are focusing their digital initiatives and the processes they are targeting for automation. We also outline a maturity framework to guide transportation organizations on their journey to connected shipping.
Areas of Digital Investment
Respondents resoundingly believe that collaboration and customer experience management are key to driving innovation. In fact, every respondent we spoke with said their company had earmarked specific budgets for building collaboration tools and advancing their e-commerce capabilities. For nearly 60% of respondents, the job of understanding customer expectations consumed 1% to 5% of their IT budgets, while 20% dedicated between 5% and 10% of their IT spend to this task.
Further, roughly 70% of respondents indicated they use social media channels and employee or customer touchpoints to better understand customer expectations, with the goal of improving operations in areas such as procurement, scheduling and customer service. Many respondents believe doing so will significantly benefit their customers by increasing visibility and shortening response times. Some said they are working to ensure anytime/anywhere access to information for their customers, which they believe is a key differentiator.
With end-to-end information visibility, respondents said, they could increase supply chain agility in the following areas:
Reroute inventory at will.
Consolidate shipments efficiently.
Accelerate profitable returns.
Configure and change orders (even mid-production).
Accurately predict future demand across regions.
Existing Levels of Automation
When we asked respondents about the level of automation their systems offered for critical functions, we were surprised that few respondents had taken the necessary steps to ensure the secure transport of documents (i.e., bill of lading, delivery order and manifests). For example, a minority said their companies use a unique QR code for document verification to minimize the chances of wrongful delivery or unauthorized financial transactions.
With rapid response times of e-booking being a key factor in automating ocean shipping, most study respondents indicated their EDI booking systems have a high degree of automation.
Vessel scheduling, freight payment and documentation among respondents are primarily semi-automated. For most respondents, shopping for rates is a highly manual process that typically depends on chosen carriers’ service levels and their ability to provide real-time freight rates around the clock.
Seamless integration with existing host systems and technologies is essential for automating, simplifying and reducing costs across the supply chain. To meet this challenge, 85% of executives surveyed were committed to using external technology companies, while 15% said their companies were tackling this challenge in-house.
Based on our analysis of the e-commerce market and the approaches that some transportation and logistics companies are taking, we have defined a maturity framework to help shippers better assess their current capabilities and plan ahead (see interactive figure below). We have observed that most shipping organizations operate between Levels 2 and 3 (“managed” and “optimized”), which suggests they have attained competency in key functional areas.
As companies build an automated e-commerce model, a strong framework can serve as a checkpoint at every stage to confirm that the necessary level of maturity has been reached before making additional investments along the roadmap.
All told, our recent interactions with chief shipping executives confirmed our hypothesis that connected shipping is an industry priority. While the road to success will be challenging, the insights gained from peers, as well as capable technology advisors, can help your organization chart a straight-forward course.