The era of tech-infused supply chain communities
September 11, 2017
Shipper Council provides actionable information to network of carriers and partners
by Greg Kefer, VP marketing
We’ve all gone to the supply chain industry trade group events and meetings. There are always a lot of great ideas, agreements, and programs that come out of the discussions, but they rarely result in real application to the job of running a supply chain.
While the challenges are common, the solutions can vary widely. Do I solve that issue with my ERP, or my TMS system? Does my partner have a technology solution to help me? We all use the same WMS software, but we have all deployed it differently, so how do I apply new insights to my operation? Historically, the complexities of the supply chain have resulted in companies deploying highly customized software. This made meaningful best-practice sharing hard because few companies had similar software configurations.
But now, modern cloud technology platforms have multiple companies running on systems that are hosted, multi-tenant instances of software with common user interfaces. In addition to front-line software, the back-end supporting information network can also be shared. This opens opportunities for communities to not only collaborate around process, but also to improve information quality and partner connectivity. In the global supply chain, this is the key to success and presents a ripe opportunity for a different level of business-to-business collaboration.
One example is the GT Nexus Shipper Council. Formed in 2007, this group’s original charter focused on information exchange between several large shippers and the big ocean carriers that handle 90% of containerized freight volume. The top 30 ocean carriers are in the middle of most global supply chains, so if data quality standards could be improved, every shipper in the world would benefit.
When the group started, the data quality key performance indicator (KPI) score was below 60%, which meant information about shipments was missing 40% of the time. Supply chains cannot be run when nearly half of the status information needed is missing. The Shipper Council members all share GT Nexus, an Infor company, as their global supply chain information network. They also use the same carrier partners to move their ocean and air freight.
The presence of a unifying technology system has helped the Shipper Council improve data quality KPIs to over 95%, on average, across all carriers. GT Nexus technology was the enabler, and the community collaboration and best-practice sharing made the difference.
The collective power of the Shipper Council members is significant. The member companies have combined annual revenues of more than $1.5 trillion, and they move about 8 million 20-foot equivalent units (TEUs) of freight each year. While each company is a major shipper, it was the community-level engagement that ultimately made the difference.
From the carrier perspective, GT Nexus was a single gateway to multiple major customers, which enabled them to focus on one information exchange link to satisfy the entire Shipper Council community.
As the Shipper Council matured, it became important to celebrate and share the progress. The council started presenting annual performance awards to the top-performing carriers, and sharing their success with shipping trade publications.
Hapag-Lloyd and Expeditors have just received the performance awards for 2017:
- GT Nexus Shipper Council acknowledges Hapag-Lloyd for Outstanding Data Quality Performance for second consecutive year
- GT Nexus Shipper Council awards Expeditors for Superior Partner IT Performance for Air Transport
What makes the Shipper Council so effective is the highly operational nature of the group’s charter. The active members are the directors and managers that run the world’s biggest supply chains. Their work on the council directly impacts the operations of their companies. Benchmarking is not hypothetical, but rather based on what’s happening, or has happened. When an issue such as a natural disaster or a carrier bankruptcy occurs, the council members can have a call and determine a path forward that benefits all.
With technology now connecting companies and their partners in ways like social networks connect friends, the opportunities to collaborate are exploding. The Shipper Council cracked the code on ocean and air shipping information because its members all share GT Nexus. This is a win-win scenario for the shipping industry at large.