There is an abundance of chatter in shipping and freight about digitizing supply chains, with reports that more spending than ever before is being poured into developing software and platforms. The consensus across industries is that improving supply chain visibility and B2B connectivity is a primary challenge, and that digitizing the supply chain is a way to enhance managing all the data.
In a recent JOC.com article, it was commented that progressive supply chain innovation lies in “cleaning up data, creating data standards, connecting siloed data sets through APIs, and facilitating collaborative workflows”.
We at FreightPOP strongly share this point of view.
B2B logistics companies are solving real problems and transforming into digital processes best by connecting all the data points throughout their entire supply chain, both internally and externally. We believe that the shippers who are connecting the data points well are attaining the best ROI and efficiencies.
A useful analogy can be made with smartphones. A smartphone is a central navigation for many data points. Much like how a smartphone is a centralized platform that allows users to interact with many data points seamlessly, good shipping software that digitizes a supply chain should offer that same user experience.
A smartphone is that connection a user has to all the data points – websites, etc. Shipping software, often referred to as a transportation management system or TMS, should be the connection a business has to its entire supply chain’s data points.
What is the current state of supply chain B2B connectivity?
From our perspective, although a lot more digitization is on the horizon, the industry is not incorporating digitalization holistically. There appears to be a lot of niche logistics carriers and developers bringing to market systems that only best serve their niche. There is a lack of shipping software that connects internal and external data points that operate well across multiple industries.
For example, we’ve seen several freight forwarding companies raise capital, put on a digital front end, and add some services around that – however, at the end of the day, they are still essentially just a freight forwarder. They are not offering tools that work across other modes or that improve workflow efficiency.
So for now, digitization is rather narrow in scope. Software developments appear to be very focused on whatever specialty already exists in the company. We haven’t seen TMS or transportation management broaden out over modes and over the supply chain.
What should a digital supply chain do?
Shipping software or platforms ideally should integrate seamlessly into the company’s internal tech stack. A company should be able to connect their inventory, warehouse, ordering system, customer service system, and even accounts payable system into their shipping software. This is the “connecting the siloed data sets” that JOC.com was talking about.
The software connection should also extend to external data points, such as carrier websites. This sort of connection to a single platform drastically cuts down on the need to log in and out of carrier websites to do daily tasks such as obtaining a shipping quote, organizing a return, or making a shipping claim. We have witnessed robust shipping software that improves efficiency by as much as 20-30% when offering this type of connection.
Many TMS solutions on the market only offer one-way communication, usually by way of the system pulling information from a particular data point. This is a closed-loop type of system. However, a more evolved system allows bilateral integration, whereby there is two-way communication. Bilateral integration allows a system to route information back to even external systems, like an external carrier website. And likewise, information such as tracking, can be looped back into internal warehouse, inventory, and customer management systems.
For the shipper who lacks digitization, their daily processes look something like this: They go to a carrier website after an order comes in and update the order information manually to book a shipment. Then they must go back to their ERP system and upload the tracking. And finally, when the shipment is delivered, they must go back into their ERP system again. There is a real back and forth between carrier to ERP without digitization.
Whereas with shipping software that offers bilateral integration, most of the information is routed back and forth automatically. This, of course, saves time, money, and helps prevent human error. This type of integration offers true efficiency in a supply chain.
What is the best digital supply chain option for B2B connectivity?
We believe that software that focuses on the connectivity of all the data in a way that optimizes the workflows is the best option for shippers. The industry does not require a TMS that is also an ERP system, or a carrier, or whatnot. That’s not the most effective tactic.
Seamless workflows that integrate and support the existing technology, thereby solving real problems shippers are having, gives shippers the most ROI now.
Centralized workflows and B2B connectivity are what we focus on. We do not seek to replace systems, but rather make them function well together. We connect the siloed data.
About FreightPOP
Built on more than two decades of shipping & logistics experience, FreightPOP helps shippers to ship smarter, and ship easier. It serves the mid-sized to enterprise-level shippers, with features that are powerful, yet affordable and easy to use.
To find out more, visit freightpop.com.
FreightPOP Contact: Kurt Johnson
Phone Number: 949.454.4611 Email: [email protected] or [email protected]
A post-Covid report by McKinsey in 2020 suggested that almost every company was planning to invest in supply chain digitisation but the absence of international standardized processes turned out to be a real blocker.