Not so long ago I was chatting with the management team of one of the top ten bulk transporters in Europe. The company in question had an enviable track record and those at the helm were thinking long and hard about its future. What would it take to build on its success and ensure its position as a leading logistics service provider in the 21st century?

The result of their deliberations was a vision of the future that emphasized intelligence. They were going to grow into an intelligent logistics service provider – an LSP that applied intelligence to every aspect of its operations, and those of its customers.

I believe that company made the right decision. Before I explain why, let me state that intelligence and visibility are two quite different things. Visibility is fine but it isn’t enough. Visibility into an inefficient operation simply means that you not only know you’re inefficient – you can see that you are. It takes intelligence to actually fix the problem.

So what does intelligence involve? What will the new intelligent logistics provider of the future look like?

Here are four questions that point to the presence of real intelligence in an LSP.

(1) Can you plan and optimize operations while taking multiple constraints and changing circumstances into account?
Many companies think they have intelligent logistics in place. When you actually examine their operations it becomes clear that they still have some way to go.

Creating truly efficient trips is beyond the intellectual capacity of even the most capable planner. Which trucks, trailers and drivers should be deployed? Should you use your own resources or contact a charter? How should expected – but not yet confirmed – shipments be planned? Have you taken into account the opening times of customers, the capacity of distribution centers and docks, and a multitude of other constraints (and disruptions) that impinge on the efficiency of your transportation plan?

If you can, this is just the beginning.

(2) Are you growing into your customers’ supply chains?
Are you equipped to manage their stock levels or take responsibility for vendor managed inventory? Are you connected to their production planning systems so you know when to expect certain shipments?

Let’s take it a step further. Can you tell which changes to their production plans will reduce their transportation costs and advise them accordingly?

(3) Are your charters connected to your planning system?
Do you know – instantly – whether they are available? Can you assess their reliability within seconds? Do you have immediate access to crucial information (such as who is allowed on a particular customer’s premises and who isn’t) that affects your choice of charter?

Mobility solutions are, of course, necessary but they are only part of the answer.

(4) How easily can you assess tenders and evaluate investment decisions to expand or contract parts of your network?
How will accepting a large contract affect your KPIs? What will the impact be on your operations?

Under what conditions should you extend or merge distribution centers? Should you, for example, consider investing in more trailers?

In other words, can you explore what-if scenarios to ensure the most profitable strategic moves?

From provider to trusted advisor
Here’s a prediction. Logistics is set to be dominated by intelligent logistics service providers – LSPs who are prepared to become an integral part of their customers’ supply chains and their customers’ success.

The leaders will be those with the foresight to equip themselves with intelligent centralized planning systems that optimize every aspect of their operations and provide planners with the tools they need to make the most profitable decisions across all planning horizons.

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