Technology is critical, but people still make fleets successful

Don’t get between Grandma and the delivery of Christmas presents meant for her babies: That’s my advice for the New Year, especially for companies who deliver directly to consumers.

IBM’s Watson puts on a good show, but business still needs the human touch, no matter how impressive the technology.IBM’s Watson puts on a good show, but business still needs the human touch, no matter how impressive the technology.

FedEx and UPS took the media heat and headline hyperbole for being a day late on a tiny fraction of their deliveries, and online retailers are now a dollar or two short, offering ‘make-good’ refunds and credit toward future purchases.

But did anyone really get hurt? No one over the age of 8, I’d guess.

And since angry 8-year-olds aren’t making corporate-level shipping decisions, the supply chain will only be stronger – that is, better prepared and more efficient – next Christmas.

Of course, everyone involved in this year’s late fumble will review the game film to determine whether retailers over-promised or carriers under-delivered. But that’s another way of saying ‘negotiate’: The mega-carriers will gladly add capacity, if shippers are willing to pay for it.

Certainly there will be corresponding opportunities for smaller players to step in and take advantage of the continuing growth of online shopping.

Indeed, online retailers have already diversified their delivery options, “cobbling together” networks of regional carriers who are grabbing market share, as the Wall Street Journal reports. What may be crumbs to UPS and FedEx add up: Just a 3 percent piece of the ground delivery pie came to about $1 billion in 2013. For companies that started as local couriers or express package delivery carriers serving niche needs, that’s real money.

Not only is overhead substantially lower, but because they operate in smaller market areas the regional carriers can offer later pickup times for next-day delivery, compared with the complicated, multimodal hub networks used by national carriers, as the story explains.

“It’s not just the pricing, it’s the fact that we can get it there the next day,” Ted Kauffman, chairman of Woburn, Mass.-based Eastern Connection tells WSJ.

Of course, another important reason smaller fleets can compete with the giants is technology, something I wrote about, again, this week for HWT. In that story, a veteran of the transportation and logistics business talks about being able to develop and implement technology that only the very largest companies could afford a decade ago. He also said that if he were starting out in the industry today, he’d focus on IT, not “pushing boxes” – in other words, helping fleets work smarter and more efficiently.

As someone who covers transportation, I can attest to the shift away from hardware (trucks and engines, transmissions, tires) to software as the focus of fleet executives – heck, even truck makers are likely to talk more about their vehicles’ technological enhancements than about the iron.

Simply, it’s a silicon-based, digital, networked world now.

But trucks and drivers are still essential – at least until Amazon and Google officially take over and fleets go to the drones. And as long as people are part of the system, we need to be careful about using technology to pull the supply chain so tight that humans have to be replaced because we’re the weakest link.

(For a left-leaning take on the pressures applied to people in the supply chain, here’s a recent inside-look at life on the conveyor line in an electronics distribution center. Be advised: This is not a story that will warm the heart of some business owners.)

Today’s technology aims to eliminate the waste in your operations, and often that means using machines to do the jobs of people, or at least alter the job (often paperwork related) in a way that one person can do the work of two or three.

That’s the low-hanging fruit. Improving efficiency gets harder as your operations get more efficient. But maximizing efficiency can be like a drug for management, especially for execs who may be removed from the day-to-day work. These days, it’s easy – with the right technology – to precisely measure everyone’s job performance, and build spreadsheet projections that assume something close to frictionless execution: coast-to-coast, even intercontinental, just-in-time deliveries; landscaping crews whose stops are lined out to the minute; a construction job with no margin for delays.

It’s one thing to expect your company to be perfect, and to work toward that goal. It’s another thing to make promises to customers based on unrealistic expectations – and that’s where the parcel companies picked up some bad PR this holiday season. Simply, many Americans want what they want when they want it, and retailers are happy to sell it to them.

But as annoying as an angry consumer might be over a delayed Beanie Baby delivery (or whatever the hot toy was this season) that’s nothing compared to the blowback from an angry corporate customer if your mistake shuts down a production line, or means the front lawn for a long-planned open house has no turf.

So, for the New Year, I promise to keep readers up to date on the latest and greatest tools for fleet management, but I’d like you to promise to treat staff like people, not machines.

There will always be situations that require hands-on experience and seat-of-the-pants judgment, and those are features you won’t see advertised on the features list of a new software package.

Not yet, anyway.