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Collaborative Model between LSP and Technology Partner

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As the business grows for a Logistics Service Provider (LSP), so will the complexities and the need to provide a long-term, comprehensive, future-proof technology platform that scales up with the business. This technology platform will become the backbone of the LSP business. It must be capable of supporting the company from an operational, tactical, as well as strategic perspective. Some of the core capabilities which the LSP needs to consider while conceptualizing a modern technology platform for business are: 

  • End-to-End solution capability: The platform must have the capacity to provide seamless information flow across the logistics supply chain covering not only core logistics but also encompassing the other critical business processes such as CRM, finance, asset /fleet management, and compliances, which may require operational inputs from the core logistics modules. 
  • Access to relevant external entities: The platform must be able to provide standard, limited views and functionality to external entities that engage with the LSP. These entities include customers who may want to view freight rates, create requests, negotiate with the LSP on quotations, view consignment visibility (track and trace), make payments, raise claims for damages, etc.

    Additionally, vendors may need this access for viewing tendering requests from the LSP, accepting or rejecting these requests, providing their quotes, negotiating with the LSP on pricing, and making the resources available to the LSP. Well designed, scalable, and efficient customer and vendor portal capability is one of the best ways for the LSP to highlight its technological platform capabilities to this set of external entities, which in turn become a magnet for business.
  • Emphasis on delightful user experience: The platform must be capable of providing a standardized and extremely user-friendly interface to all users of the platform. The absence of a uniform, comfortable user navigation, or transactional experience breeds user dissatisfaction, which evolves into user resistance. Having intuitive, and clutter-free interfaces with intelligent defaulting of data based on past transactional patterns, culled out using AI/ML algorithms, go a long way in fostering user delight.
  • Integration capability: The platform must have the capability to provide real-time, or near-real-time integration with the plethora of external applications and software platforms already present in the logistics domain that provide services such as vessel and flight schedules, ports, and distance databases, etc. The platform must also be able to standardize these integration methodologies using modern integration techniques such as API-based integration. For an LSP today, having a ready list of published APIs in its platform is a potent tool because this gives the LSP an edge when it comes to dealing with large customers with heterogeneous business models.
  • Scalability: The platform must be technologically capable of meeting the scalability needs of the LSP:
    -  Change in or augmentation of business functionality
    -  Increase in user base and a leap in data volumes
    -  Business expansion in terms of addition of new business units such as warehouses, ports, etc.
  • Portability: The platform must be browser, operating system (OS), and device-agnostic to as much an extent as possible. While it is difficult to achieve perfection in this aspect, if the platform is accessible on the most popular, widely used technologies, the purpose will be served. 
  • International business capability: The platform should support an international business by enabling the use of multiple countries, currencies, time zones, and languages. It should also be capable of providing support for numerous customs regime across the world, either organically or via integration with niche solutions for the purpose. 
  • Availability of reporting and analytical tools: The data that gets accumulated in a logistics platform is a gold mine of information that can be utilized by the LSP for taking tactical as well as strategic decisions. It is vital that the platform either has a built-in capability to provide industry-standard MIS as well as operational reports or can connect to applications that can generate such reports. The same goes for analytical tools. The capability of the platform to export data to such tools and allow the LSP to carry out analysis strengthens the platform and benefits business immensely. The use of AI/ML algorithms for predictive analysis in the platform adds a superior capability to the system, and it provides the LSP with profound insights into the data, which are not possible with traditional algorithms or manual analysis. 
  • Availability of collaboration and workflow Tools: The platform must have collaboration and workflow tools that will ensure information and messaging flow throughout the business. Event management, email/SMS-based alerts, custom workflow definitions allow flexibility to the end-user in managing the flow of information to the right stakeholders in the system. 

Finding the right technology partner

LSPs, like any other business, look to leverage the latest technologies available in the market for improving the efficiency of operations, reducing the cost of doing business, and improving profitability. But in the increasingly complex world around us, one cannot merely get hold of the most easily accessible or the least cost technology solution and hope it to be the best for the business problems at hand. Also, quite often, business leaders have unrealistic expectations from newly mainstream technology and push it through their organization, trying to find the problem this innovation would solve. More often than not, this leads to disaster because of the disconnect between the leaders and the end-user on the ground who is grappling with a lot of other fundamental issues. To jump on the business innovation bandwagon, an organization requires maturities in mindsets, processes, and systems in use. With plenty of inventions and innovations available, an LSP needs to not only analyze the problems it faces but also has to find the right technology solution provider partner who may guide the business appropriately to find the best-fit solution for their problems.

Deep, long-term collaboration, a must

If the LSP is looking forward to investing in a technology product that will make a significant impact in multiple areas of the organization, it must engage in a significant long term partnership with the technology product vendor.

Some of the areas where a technological revamp could impact:

  • Warehouse automation
  • Replacing legacy systems
  • Implementing biometric and RFID technologies to prevent identity fraud and pilferage in a warehouse
  • Mobile app for the driver to gain visibility

There is virtually no enterprise-class product that is purely plug and play and does not require any preparatory work by the business or the product vendor. If the product implementation must be a success, complete synergies between the business leaders, user champions, end-users of the LSP, and the consulting and implementation teams of the vendor are a must. Of course, as business managers and implementers know well, this is easier said than done.

Model for collaboration

If this partnership has to benefit both the parties, the LSP must first be committed to investing a significant amount of time and resources in a program that should be designed for short, medium and long term benefits that need to be derived from the implementation. On the other hand, the right technology partner must engage with the business at multiple levels, understand the real issues, and only then offer a complete solution that may involve numerous technological pieces coming together. Here’s an indicative list of expectations from the LSP if the collaborative model must succeed –

  • Senior management’s commitment to support the endeavor at all stages
  • Allocation of the right product champions and SMEs to ensure the processes are clearly articulated to the partner
  • Ongoing time commitment by these champions and SMEs to provide the partner with all the information it needs, and on time
  • Timely responses to the queries and clarifications asked by the partner

In the same vein, the following gives an outline of some of the critical expectations from the technology partner–

  • Exposure to and the capability of providing relevant technology solutions across a broad spectrum. Not all resolutions need to be organic in nature. The partner must have the ability to piece together the various strands to make it a complete solution for the LSP.
  • Dedicated pool of highly knowledgeable, motivated consultants and managers, and who work as partners in the journey rather than resources in a project.
  • Honoring delivery commitments

 Gains for the LSP –

  • A robust platform that has been built to address its business requirements of today and tomorrow.
  • A proven and long-term partnership with a technology partner who understands the LSP’s business inside out and can offer its expertise.
  • Huge savings on the time and effort that it would otherwise have to undertake to try to solve varied technological and business challenges without the guidance of someone who has the expertise to suggest the right approach to take or the right technology to use.
  • Focus its energies on core business. Once a trusted partnership has been built, the LSP can continue to focus on its core business.

 Gains for the Partner -

  • Valuable expertise gained out of its deep interactions with the core business.
  • Satisfied customers become references for bringing in new business.
  • Association with marquee names of the industry improve its profile with time.

Stay tuned to read Part 2 on a working model of collaboration.

 

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About Author

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Ashish heads the design and operations team for Ramco Transportation Management System (TMS) product. He has more than 2 decades of experience in building enterprise class software products. He currently builds AI/ML driven logistics product for 3PL providers, especially concerning TMS.

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