7 Success factors on the way to optimal transport management

The own logistics is too non-transparent for many companies. Many are bogged down in details in global competition with logistical marginal issues that should be better outsourced. In an interview, Fourth Party Logistics expert Gerald Floß talks clear about how easy it is for companies to improve their logistics. The managing director of Kloepfel 4PL Solutions is convinced that medium-sized companies should expect more from their transport management.

1. Transparency: Are transparent processes in transport management not natural?

No, unfortunately not. Therefore, we as a 4PL service provider (Fourth Party Logistics Provider, Infographic) demand that this transparency must be built so that the customer can gain control over their logistics.

This has been obvious for years in online retailing, as for eBay or Amazon, which work together with CEP service providers. Each of us knows this from the private surroundings. We order socks on the Internet and can see at any time, where the shipment currently is. We see if it has left the warehouse and is on the way to the haulage center of the forwarder, when it will be delivered and if it was eventually handed over to the neighbor in the end. This is the meaning of process transparency in transport management.

But unfortunately we are miles away from this topic in shipments in the industry and this is a very special challenge for the coming years.

We want every business person who knows this transparency on eBay or courier services is able to get this for their industrial goods as well.

How does Kloepfel 4PL solve this problem?

We offer our customers a transport management system where they do not need to invest in. The task of the transport management system is to make the shipping transparent by processing and monitoring tracking and tracing data.

Unfortunately, in most cases the system is only as good as the data flowing in.

That’s the challenge, according to the motto “Shit-In – Shit-Out”. The data quality across all logistics service providers is variously good in the range of general cargo and part load as well as full load. The problem is that the market is very sporadic with its variety of providers. For example, each of these providers has another computer and telematics systems to get data from the vehicles.

Kloepfel 4PL Solutions solves this by, for example, trying to get around the forwarders’ dispatching departments, so that we can use our techniques to access the onboard unit directly and thus the data of the vehicles or drivers.

At the same time, we implement tariff systems that encourage the freight forwarder to uphold and permanently measure their data quality. Nowadays prompt data quality is just as important as the transportation itself. That means that status data that is not sent on time will also be a miss just like a delayed transport. In the end, both can lead to the loss of the order for the transport service provider.

For each of our customers and projects, we achieve a high degree of transparency. Both the supply management system and the employees of our customers can monitor and control their logistics almost immediately in the Kloepfel 4PL-Controlltower.

2. Automation: isn’t it water under the bridge now?

One would think that this would be the case, but unfortunately it is still the case that the automation rate in transport and shipping processing inbound and outbound is very low, especially among medium-sized businesses. Too much work is still done manual. There is still too much information exchanged via e-mail. We have multiple media breaks. Data is recorded multiple times and this costs money and binds the ever-dwindling workforce.

Automation is no rocket science. All you need is the right tools and the know-how to really prepare and process all the information that actually comes from your in-house ERP systems so that everyone involved in the transport process gets their information electronically.

Only the individual investments, to set it up once, are very large…

That’s right, but that’s exactly where the Kloepfel-Control tower with its transport management system starts. We have the processes, the experience and the systems therefore. The medium-sized industrial customer needs only a single interface for us. Not only is the data flow to the forwarders automated, but also the maintenance and adjustment of the system as well as the master data maintenance.

We offer an individual concept of service and technology provision for each company.

3. Outsourcing: Can and should companies outsource their logistics?

Ultimately, it is important that every company should be focused on its business purpose so that they do not get bogged down in global competition. Therefore, a medium-sized industrial enterprise should focus on its customers, production and research and not necessarily on the marginal issue of logistics.

For those problems there are logistics professionals who look into all areas of logistics and then design an optimal customized setup – no matter if it is the operational transport management, questions on dangerous goods or customs and foreign trade issues.

However one should look for independent professionals, thus 4PL-Logisticans, which do not belong to a transport company and which are not obligated to a vehicle fleet, etc. These companies are mostly just about making the most of their fleet or assets.

Whereas independent 4PL logisticians like Kloepfel 4PL Solutions, are interested in reducing logistics costs and minimizing the trucks on the road. This does not only treat the budget with care, but also protects the environment.

It is about the 4PL definition. 4PL means independence. A 4PL service provider must never be dependent on the actual transport service or the service provider.

4. Standardization: Is the effort of standardizing logistics worthwhile?

Without a doubt yes. Standardization is the basis for automation. Whether freight conditions, processes, terminologies or similar, unfortunately there are not many standardized topics in logistics. The standards that are most common are the Incoterm and maybe also the container size, but that’s it.

When you have a multitude of process types, plants to operate, and logistics service providers to deploy, it is important to define standards. Through this not every little thing becomes a disturbing exception. Only the things that are standardized to at least some extent can ultimately be automated. Thus there is no room for individual interpretation for everyone involved in the process. That is why standardization in transport management in logistics is so enormously important in general.

So that everyone speaks a common language and one do not experience problems on a daily basis?

Exactly. With so many involved in an increasingly complex process, especially in international and intercontinental transport chains, standardization is inevitable. However, this is far not implemented as much as it should be.

That’s why in a larger project, when introducing a transportation management system, you have to talk about standardization at the beginning. Of course, one should not exaggerate and must pick up all parties at the customer.

But without a reasonable level of standards, a transportation management system project would get completely out of control.

5. Scalability: How do you master these?

This is also an issue closely related to outsourcing and automated solutions. Scalability means for us that we offer our customers holistic logistics systems that adapt to them quantitatively at any time.

This is a special feature of Kloepfel 4PL Solutions.

Exactly. Our system and thus also the logistics costs adapt to the customer fully variable: whether strategic or operational components, seasonal fluctuations, shipment as pay-per-click and so on. The entire transport logistics, the freight costs as well as the control, are adapted to the needs of the customer.

Thus, one can calculate much better. The entrepreneur has a really fixed calculation size for his logistics and also no remanence costs. For example, if there are seasonal fluctuations in sales or even plant closures, there are no costs, for example, for permanent employees or other fixed logistics costs.

This is such a significant competitive advantage for companies that many are interested in our Kloepfel 4PL outsourcing project.

6. Neutrality: What is the 4PL principle?

4PL service providers can only design and implement their own, scalable logistics solutions for their customers if they are independent and do not compete with the so-called 1, 2, 3-PLern.

On the other hand, the market needs the diverse price-performance competition of asset-driven logistics companies. It is just that the 4PL service provider here is the optimal – because of independency – logistics service provider, who can procure from all logistics providers the best in class solution for his customers.

7. Measurability: What is not controlled is not taken seriously. What does measurability mean for Kloepfel 4PL?

The “common” 4PLer just deals with the optimization of the logistics of its customers and not with the utilization of transport equipment. But of course, optimization also includes measuring. Only what can be measured can be optimized.

The 4PLer likes that, because he has to show by his pay system anyway that he has improved the logistics landscape of his customer.

The optimization is not only aimed for monetary aspects, but also essentially for qualitative. For example, the transport processes, the quality of the service providers used, error rates, damage rates and cost development.

Even there, the industrial middle class is usually not positioned so that it has the costs or transparency of services in logistics. That often has to be produced by us in the project.

Thank you for the interview!

4PL – Fourth Party Logistics