We have been talking a lot about Supply Chain Management Control Towers. Yes, transportation (usually under logistics) is included in the control tower. In many companies, transportation is outsourced to a 3PL, 4PL or 5PL provider. This provider is an expert at hooking your company up to any required transportation resources. Your provider already has some excellent tools available. A popular concept since the 1990’s has been the “Load Control Center” (LCC). We are looking at outsourcing, but yes, excellent software is available if you do it yourself.
Transportation has always been an opportunity to centralize and get some benefits. 3M started the concept of Load Control Centers(LCC) and lots of others followed suit. The LCC is simply centralization of transportation planning and execution. Benefits include:
- better pricing from centralized transportation sourcing
- development of standardized operating procedures
- fewer planners than in several separate operations
- ability to combine more shipments and loads because of greater visibility
- electronic integration with carriers
Because most companies do not have a lot of the required skill sets, outsourcing brings a lot to the table. But there are some good choices available:
1) Outsource whole thing: Business Process Outsourcing (BPO). Company manages strategically while BPO manages tactically.
2) Outsource with intent to bring back in home.
3) Use consultants in an advisory role.
One of drawbacks of the LCC was building a complete network of electronically-connected trading partners. A lot of time and effort was spent in connecting trading partners. Very difficult connecting partners who, at that time, saw no benefit in the Internet. Any LCC had numerous holes in its visibility. That meant the customer could not completely trust the results. The LCC had to take a fall-back decision to not managing anything but fleet carriers and rail. They had big troubles with small carriers and anything international.