Transforming Shipping Logistics

While effective planning and control of logistics lay the foundation for smooth execution of supply chain processes, ‘transportation’ offers significant opportunities to maximize supply chain value. As a critical link in the supply chain, inbound and outbound shipping plays a vital role in executing both forward and reverse logistics operations.  Various issues and challenges call for transformation of  shipment logistics.

Managing transportation, particularly global shipment operations has become a critical & strategic business function for many vendors, manufacturers, distributors, online retailers and carriers. As global sourcing and distribution operations have increased manifolds, several supply chains have blown up in size and complexity  creating need for wider logistics networks and vendor relationships, making the transportation management increasingly complex. Simultaneously, supply chain and transportation executives are under immense pressure to keep transportation costs down in the face of rate increases and keep service levels up in the context of capacity constraints. Besides, gaining competitive edge through more effective shipping operations has become imperative.

In addition to the strategic and operational issues, confidential service contracting as an effect of deregulation in deep-sea transport has made vendor management and allocation more complicated. Besides, the rising security issues have put increased pressure on the shippers to uphold firm control over their supply chains. On the other hand, making transportation decisions which are highly significant for operational success  have become very difficult due to a lack of information and process standardization across the partners. In view of tight carrier capacities, increasing fuel prices, traffic congestions, dearth for drivers, rising security concerns, hours-of-service(HOS) constraints and increasing lead-time variability, collaborative ‘win-win’ transportation management relationships is emerging crucial for both shippers and carriers. In one of the recent issues of Supply Chain Digest, its readers have also expressed the same set above-discussed problems as today's logistics challenges and issues. Given these emerging challenges and concerns, it is indispensable for manufacturers, distributors, retailers and third party logistics (3PLs) to transform their transportation arena so that their shipping operations become more efficient, resilient, responsive and secured.

Best practices such as centralizing the load planning and shipping operations, mechanize the order consolidation process, taking greater control of inbound shipment and self-invoicing persist to drive value for the shippers. As managing the global transportation has become increasingly complex, retailers and manufacturers can embrace a holistic approach called ‘Transportation Resource Planning’ that redefines the processes (plan, optimize, execute and measure) and technology requirements, of shipping operations at regular intervals.

As noted earlier, various factors such as increasing transportation costs, under-utilization of truck capacities, driver shortages, increased security concerns, more trading partners, hours-of-service (HoS) constraints, and increasing lead-time variability are highlighting the need for the shipper, carrier and receiver to work closely. This creates the need for practicing collaborative transportation management (CTM) in three transaction areas that represent key opportunities for CTM viz., capacity procurement, inbound management and integrated movements, while it helps in weeding out shipping inefficiencies. Present-day web-based Transportation Management systems (TMS) are offering dynamic functionalities for managing transportation network and collaborative processes covering all modes of transportation with a global span.

Emergence of Internet has revolutionized transportation procurement landscape increasing the bidding efficiencies through standardization, and leveraging the analytical and decision support. Breakthrough capabilities in TMS are opening door to the truly integrated procurement, execution and analysis that ensures compliance and security. The next generation TMS will synchronize with other supply chain execution processes and systems in order to develop a holistic supply chain system. Further, adoption of workflow standards in TMS supports global shipping operations, with multi-country/multi-language support and, collaboration within the order-to-deliver/order-to-cash processes, while providing interoperability across systems. On the other hand, automatic vehicle locator (AVL) systems provide a real-time view of the vehicle route in addition to shipment or delivery status by using a blend of technologies such as Geographic Information System (GIS) and Global Positioning System (GPS). AVL across wide range of industries including banks offer a set of logistics applications ranging from vehicle tracking to pilferage control. Adoption of advanced AVL systems also verifies the misusage of trucks, checking adulterations and retrieving vehicles from rough terrain.

Marketing Social Change

Customary practices to sell pro social behaviors are not considerably successful so far. Scientific approach leveraging principles of management and marketing, promises social marketers the desired social change. 

Detrimental human behaviors trigger a strong need for massive social change. Social change involves in bringing about attitudinal, behavioral and cultural changes amongst the masses. But how do we do this? Who are the key players? Age-old practices like educational programmes, traditional methods like mass communication and conventional media like radio, television, etc. were predominantly used for changing specific groups/communities. Although these programmes are not cost-effective as desired, they were successful to some extent. They’ve (most), however, failed to inculcate desirable social behaviors. Customary practices and mechanisms being used for social campaigns lack several important elements that are prerequisites for selling desired behavior(s) viz., effective communication and change management. Professional approach was rarely practiced. Firstly, most social awareness programmes didn’t apply the principles of communication and management. Secondly, marketing principles and practices that would have helped sell behavioral changes effectively were almost absent. But, social organizations yet have the option to use management practices for their social campaigns.  

Art of Selling ‘Change’ 

Social organizations and Govt., departments concerned have to assume the role of a marketer, think like a marketer and act like a marketer by applying marketing principles in all their social change endeavors. This approach leverages marketing practices such as marketing mix, market research, consumer behavior, branding, target marketing, promotion mix, media research and planning, celebrity endorsement, multi-cultural marketing, etc. 

Social marketing yields a significant influence in the behavior of people.  t has been practiced across the world for more than thirty years in the fields of public health, environmental protection and political marketing with considerate success. This technique has been under extensive practice by United Nations (UN) and other NGOs such as Public Service International (PSI) for marketing their international health programmes aimed at preventing and controlling HIV/AIDS, Tuberculosis (TB), etc. 

Non-business enterprises like NGOs and Govt., departments have tried using ‘social marketing’ in the areas of drug abuse, family planning, organ donation, etc.  For instance, Washington-based Population Services International (PSI), a leading non-profit social marketing firm, through its ‘clever and culturally sensitive’ promotional initiatives was able to increase the condom sales in Myanmar from 2.6 million in 1996 to 40 million by 2005. PSI designed a marketing campaign that involved a customized marketing mix. The marketing mix largely constituted a brand name and image that could gel with the conservative local population; package design – ‘silhouette of a couple at sunset under a palm tree’; use of Burmese language for the brand name and instructions to make the product more familiar to the local population (however later changed to English); and offering quality products at an affordable price.  With the support of huge international funds, PSI launched a massive condom-marketing programme carrying its advertisements on billboards and privately owned magazines. To generate brand familiarity and increase its brand recognition, PSI approached a leading Myanmar-based marketing agency to develop its own advertising mascot. To further promote general awareness about AIDS and use of condoms, PSI produced two television serials and two feature films and also began sponsoring TV shows like sports talks and English League matches. With a mission to reach every town and big village, PSI built its own national sales network instead of the commercial distribution system. It has its own full-time sales representative team of 28 persons and a wholesaler base of 50. Further, PSI targeted the pharmaceuticals, hospitals and small retail shops to sell its products. To reach small villages and towns, where a majority of its target population resides, PSI made its products available through various non-traditional outlets like betel nut stalls, massage parlours, guesthouses and barber shops. To increase its market, PSI diversified its product mix by innovating on the existing product to make it more appealing to consumers. As part of this, it has introduced banana and strawberry flavoured condoms.