Powered by Data, Driven by People: The Future of Transportation Management
The technology landscape for freight and transportation management is completely unrecognizable from a decade ago. Advanced transportation management systems (TMS), warehouse management systems (WMS), visibility platforms, analytics and AI have transformed decision making and the speed at which companies operate.
Overall, the advances have been largely positive. The ability to have data available at a glance to gain a full picture of a company’s supply chain is indispensable, and the improved efficiencies that result from these insights have allowed companies to grow and scale much more quickly. However, data and technology alone don’t guarantee better outcomes. Human judgment plays a powerful role in eliminating errors due to nuances and factors that AI and technology aren’t able to detect. That’s why the most effective supply chains combine data-powered insights with human judgment.
The Rise of Technology in Transportation Management
The 3PL landscape in particular has seen a great deal of transformation during the last several years. As the demand for real-time visibility has increased, TMS and WMS integrations have become the norm. Predictive analytics have also become increasingly important, giving companies the ability to create more proactive vs. reactive supply chains by allowing them to optimize inventory management, optimize routing and anticipate disruptions. Automated load matching and pricing models have also helped companies achieve greater speed, scalability and transparency.
With all of these benefits, it’s important to be mindful of the limitations of data and technology, as they can often identify what is currently happening in the market but cannot always define the next best steps forward.
Technology Falls Short Without Human Input
Data algorithms can report based on the information they analyze, but they may fail in situations that require context and experience to make decisions. For example, with the recent Montgomery F4A ruling in which logistics providers can now be held liable for hiring a negligent or fraudulent carrier, an algorithm that is designed to inform about the most cost-effective carrier for moving freight from one location to another will not have the contextual experience or intuition to determine whether that carrier is reputable or reliable. Over-automating the carrier selection process also leaves companies vulnerable to service failures, which can damage customer relationships.
These are just a couple of ways in which algorithms don’t understand nuance, relationships or business priorities, which can be detrimental for companies that require reliability and high service levels. These are often non-negotiable when managing critical or high-value freight.n help to prevent customer disappointment and alleviate elevated demand on customer service teams when call volumes increase.
Understanding the Value of the Human Element
Human expertise shines in the areas where technology exposes weakness. While automation and data can help to inform better decision making and create greater process efficiencies, there is no replacement for industry experience or the ability to recognize patterns or inconsistencies due to that experience.
Relationship management is one area where technology cannot replace the value of human engagement. Working with carriers and customers and providing clear communication, contextual information around potential issues and genuinely supporting a partnership cannot be replicated by systems. In addition, trade-offs across cost efficiency, service and risk are best evaluated by experienced teams familiar with the business and its customers.
The involvement of people in making critical decisions also ensures accountability and strategic oversight, which can help to prevent issues before they occur. Experienced teams that understand complex or sensitive shipments are best positioned to plan their transport, mitigate risk, protect brands, and maintain freight and carrier integrity.
The Sweet Spot: Data-Powered, Human-Led Decision Making
Technology and human decision making are most successful when utilized together. While technology and data can provide a strong foundation for gleaning insights, teams should ultimately interpret and validate the data, create the strategy and take action. This approach allows technology to do what it does best (i.e., distill the available information and provide alerts of inconsistencies or issues) while allowing people to provide strategic oversight, reduce risk and make informed decisions. It also helps to create stronger partnerships, improve service and avoid potential risks that cannot be detected by technology alone.
Any partnership that prioritizes technology and speed over relationships will ultimately suffer due to loss of control and the impact of disruptions that technology fails to identify. At NXTPoint Logistics, our experienced professionals are always at the helm of any decisions made when managing our customers’ freight and transportation. While we utilize advanced technology and have a thoroughly vetted and trusted carrier network, we understand that human involvement in every decision helps to mitigate risk, reduce fraud and protect our customers. And if issues do arise, we always have a person available to provide responsive support. It’s all part of our mission to create custom solutions for every customer while maintaining a People Powered. Customer Driven approach to every partnership.
While technology and data are essential to keep up in the supply chain industry, they must be paired with human expertise to drive the best results. Companies that elevate service and relationships while using data to guide — not replace — decision-making will be best positioned to grow and remain competitive.
Let’s build a stronger supply chain together. To learn how NXTPoint Logistics combines data-driven insight and human expertise to elevate supply chain performance, click here to contact our experts.
