Executive Briefings

Transportation is Winning a New Level of Respect

Transportation is winning a new level of respect from companies today, but a number of obstacles are preventing them from doing much about it. That's the view of Beth Enslow, vice president of enterprise research with Boston, Mass.-based Aberdeen Group. Speaking at a San Francisco seminar hosted by Manugistics Group Inc., she reported the results of a recent Aberdeen survey of 286 mid-market and large companies on the topic of transportation management. They cited multiple pressures forcing them to rethink transportation processes, including higher demand for data on cost and delivery status, escalating customer-service requirements, and the need to reduce stockouts and total delivered cost in the face of tightening freight capacity. The biggest obstacle to tackling those goals was the difficulty of sharing information, both within the company and with customers. "Current technology solutions are very departmental-centric," Enslow said.

Nevertheless, she said, innovative companies are forging ahead with new transportation strategies, built around the notion of collaboration with carriers. They are moving away from adversarial, price-based relationships, embracing automation, and availing themselves of more complex service options. Static routing guides are being discarded in favor of more flexible strategies that help manufacturers and distributors respond to changing demand patterns. And core transportation planning functions, both for inbound and outbound freight, are being centralized. "The best companies have changed their mindset," Enslow said. "Before, transportation wasn't viewed as a core competency or source of advantage. But it touches all parts of the organization. The view today is more strategic."

Of course, that means more work and responsibility for transportation managers. Beyond the basic tasks of booking carriers and tracking freight, they must be well versed in order consolidation, mode and carrier selection, tendering and freight settlement. All activities must be supported by better communications with carriers, suppliers and customers. Enslow urged executives to take a high-level view of transportation performance. Forty-five percent of the companies surveyed by Aberdeen were still measuring carriers only at the local level, resulting in inconsistent metrics, she said.

Transportation is winning a new level of respect from companies today, but a number of obstacles are preventing them from doing much about it. That's the view of Beth Enslow, vice president of enterprise research with Boston, Mass.-based Aberdeen Group. Speaking at a San Francisco seminar hosted by Manugistics Group Inc., she reported the results of a recent Aberdeen survey of 286 mid-market and large companies on the topic of transportation management. They cited multiple pressures forcing them to rethink transportation processes, including higher demand for data on cost and delivery status, escalating customer-service requirements, and the need to reduce stockouts and total delivered cost in the face of tightening freight capacity. The biggest obstacle to tackling those goals was the difficulty of sharing information, both within the company and with customers. "Current technology solutions are very departmental-centric," Enslow said.

Nevertheless, she said, innovative companies are forging ahead with new transportation strategies, built around the notion of collaboration with carriers. They are moving away from adversarial, price-based relationships, embracing automation, and availing themselves of more complex service options. Static routing guides are being discarded in favor of more flexible strategies that help manufacturers and distributors respond to changing demand patterns. And core transportation planning functions, both for inbound and outbound freight, are being centralized. "The best companies have changed their mindset," Enslow said. "Before, transportation wasn't viewed as a core competency or source of advantage. But it touches all parts of the organization. The view today is more strategic."

Of course, that means more work and responsibility for transportation managers. Beyond the basic tasks of booking carriers and tracking freight, they must be well versed in order consolidation, mode and carrier selection, tendering and freight settlement. All activities must be supported by better communications with carriers, suppliers and customers. Enslow urged executives to take a high-level view of transportation performance. Forty-five percent of the companies surveyed by Aberdeen were still measuring carriers only at the local level, resulting in inconsistent metrics, she said.