By Tom French
It’s worth a CEO’s time to read “Transportation: The Road Ahead” in CSCMP’s Supply Chain Quarterly. Chris Chaplice, Director of MIT’s FreightLab, highlights the accelerating shift to cheap and abundant natural gas as a fleet fuel, noting that:
“Waste hauler Waste Management reported that 80 percent of its new truck purchases would run on natural gas”.
The author makes note of the rapid pace of software improvements in the transportation space, but there are a few disconnects between what he describes (from his vantage point at MIT) and what I hear day to day, when talking with manufacturers and 3PLs. First of all, I’m surprised at how many Enterprise and near-Enterprise scale companies are still managing transportation and inventory without the latest generation of software (or even with no software at all), though everything else has been transformed by software, from resource planning to human resources to sales. But left unexamined in the article was how this new data-driven visibility into transportation data provides the missing leverage to reduce transportation and inventory costs, the two biggest cost centers in a company’s supply chain.
Finally, Chris writes that:
“Optimization models tend to treat the world as static, with no assumptions of variance or randomness of the input variables or conditions. This led to very rigid and fragile plans that fell apart when any disruption occurs.”
He suggests that the new generation of software can dynamically replan, but he leaves out the one element- the need for skilled logistics professionals who understand both the software and their transportation network.