IFW – Friday Focus by Bryn Heimbeck, CEO of Trade Tech
I’m sure you’ve noticed that everyone is talking about the Cloud these days! Many people in the industry have been asking me why I think international logistics is particularly well situated to benefit significantly from the Cloud.
No other industry is as geographically challenged as ours. International logistics requires many more parties than domestic-oriented companies to work together seamlessly to deliver a single deliverable. Imagine if an assembly line had to stretch across continents or oceans. Yet, in many ways, logistics is the assembly of pivotal information and command sets that represent and create the digital picture of a shipment. Each participant has to hand off key information to the next – all along the line — until the shipment is delivered at destination. This means across time zones, cultures, and languages. In the United States, logistics providers manage business from origin to destination because there are only three time zones, everyone speaks English, and all that is required is to pick up the phone and go to work. International logistics does not work that way.
I’m sure you’ve noticed that everyone is talking about the Cloud these days!
Many people in the industry have been asking me why I think international logistics is particularly well situated to benefit significantly from the Cloud.
No other industry is as geographically challenged as ours. International logistics requires many more parties than domestic-oriented companies to work together seamlessly to deliver a single deliverable. Imagine if an assembly line had to stretch across continents or oceans. Yet, in many ways, logistics is the assembly of pivotal information and command sets that represent and create the digital picture of a shipment. Each participant has to hand off key information to the next – all along the line — until the shipment is delivered at destination. This means across time zones, cultures, and languages. In the United States, logistics providers manage business from origin to destination because there are only three time zones, everyone speaks English, and all that is required is to pick up the phone and go to work. International logistics does not work that way.
The real challenge is coordinating with local entities around the world for the collection and administration of information relative to each shipment. This was just not possible prior to the Cloud-based model. Consequently, we saw a lot of people staying up late at night or getting up exceptionally early to talk by phone with their counterparts overseas.
The Cloud-based model allows a company to project its system around the world, with all of its imbedded process controls, enabling all of its offices and counterparts to collaborate, on a very cost effective basis. It’s really about exchanging accurate real-time information because the overseas counterparts are tied into the same system.
The Cloud forces us to think globally while acting locally. A good example of this focusing on using conventions that others will understand, especially others on the other side of the world. Think of the concept of customer codes which have traditionally been set up in a way that only users with local expertise would recognize. We encourage our customers to use their customer’s full name when setting up codes or validation sequences and avoid using numbers to represent companies, places, lines of business, services, etc. This enables users, now accessing that information on the other side of the world, to find it quickly and then complete many of the functions that have to be done at destination currently.
Today’s Cloud-based solutions contain a large amount of customer-specific information, located in globally accessible data bases, but this information has to be readily accessible to the local person needing to take action on behalf of that account. Those who access the information quickly can take strong and effective actions that are in line with the end customer’s desires and directives. This is the key to enabling local action through access to global information.
Ultimately, this translates into the end customer getting what they are expecting with far greater predictability and enhanced visibility throughout the process. End customers love the visibility because it allows them to make closer forecasts and improve their own business models.
Cloud-based SaaS applications for international trade are a great equalizer for small to medium sized businesses who are often more nimble and creative in their capacity to leverage new technologies vis-à-vis their larger and better capitalized competitors.
It does not require the same capital expenditure for hardware and software development (not to mention time frames), while eliminating the long term costs of an internal IT department to maintain and refine the technology solution.
The SaaS model is purchased, as needed, on an incremental basis, facilitating rapid expansion without the capital up-front costs. This model is perfect for small businesses who want to sell a technology-driven service to compete with the major industry players, but who do not have the financial depth that the big guys have.
A Cloud-based model allows small business to purchase, on-demand, the resources they need – freeing them from the larger capital outlays. The real benefit is it allows them to collaborate with other small companies overseas – enhancing the capabilities of both companies and bringing them to a level where they can compete and often outperform their larger competitors who are mired in their less effective server-based models because of the capital they have invested in those solutions.
On a basic level, Cloud computing is a web-based system that uses low-cost, hyper-lightweight global telecommunications to extend the reach of a single computer server to any place in the world that has electricity and telephone connectivity – even cell phone connectivity. This brings everyone within an organization – agents, vendors, and customers – into a single global environment. The beauty of a Cloud-based solution is it ties users to other essential services such as Customs, carrier portals, insurance companies, and financial institutions. Participating in a Cloud-based solution means not having to build these connections yourself.
Do you see how the Cloud is revolutionizing our industry? This is just the beginning – very exciting times now and ahead!
Bryn Heimbeck is CEO of Trade Tech, an integrated global application service provider for the transportation and logistics industry. For more information, please contact www.tradetech.net
Another aspect of the Cloud that is exciting and revolutionary is its cost effectiveness.
