Supply Chain Expertise and Technology Blog by TMC, a division of C.H. Robinson

Exceptions That Prove the Importance of Succession Planning

succession planning

Key to the success of an outsourced transportation management system (TMS) relationship is how much the provider manager responsible for the account knows about your business. Also important – but less obvious – is the availability of a backup manager who is also familiar with the nuances of your account. Such is the increasing complexity of freight networks that having a knowledgeable account manager is no longer enough; shippers also need to be reassured that there is an operations person who can step up to the plate and take over your account should the primary contact be unavailable.

Succession planning, as it is commonly called, is one of those service features that may or may not be on your radar screen when selecting a TMS provider. Yet, it is increasingly important. Not only is freight transportation becoming more demanding, so is TMS technology.

Consider your own freight network and how it has changed over the last decade or so. The chances are that there are a lot more operational exceptions that there used to be. The job of loading a truck used to be relatively straightforward; now there might be more than a dozen exceptions that if not taken into account ripple through the supply chain and cause serious disruptions. Route restrictions, co-packing requirements, delivery location constraints, timing of production (line to truck), equipment restrictions (slip sheets/swing doors, high cubed…), are some examples of these anomalies.

Just in time shipments are particularly prone to exceptions being overlooked or improperly managed. A process needs to be followed to ensure that cargo is loaded on, say, Monday so that it is available for Tuesday’s production schedule.  A slight deviation in the process that delays the shipment can require it to be transported by air at ten times the cost.

Some exceptions are relatively obscure and not easy to anticipate. Perhaps a delivery requires certain unloading equipment or elevator space. If these facilities are not booked then final delivery is delayed. In addition to incurring extra cost by idling expensive equipment, such a delay is seen by the end user as a service failure.

A good account manager is aware of these special needs, but if he or she does not pass on this information to a substitute manager, failures are likely if and when the backup person needs to cover for the main contact. Similarly, if the account manager moves on, these knowledge gaps will cause problems for both the service provider and client shipper.

Making sure that there is another operator who is well briefed about the various operational facets of an account sounds like a routine matter, and indeed it is, but the sheer complexity of some networks can trip up even the most conscientious manager. Some shipper accounts can have as many as 150-plus standard operating procedures, and if some of the exceptions associated with these procedures only kick in once every three or four months, they can easily be missed during briefing sessions.

Technology adds another layer of complexity. Electronic data interchange (EDI) has been around for a long time, and is used in countless freight transactions. But understanding when and why new EDI data fields are needed can be a challenge.

Keeping track of new technology developments and related service variations can be even more difficult. Take mobile communications, for example, a field that is transforming many aspects of freight transportation. The number of mobile applications has increased dramatically over the last year or so. While these apps can deliver significant efficiency gains, TMS managers have to be sure that shipper clients possess the platforms to support the technology and are able to utilize the flood of information it supplies.

Again, the number of potential operational exceptions is an important issue. In the past, TMC, a division of C.H. Robinson has routinely planned for and tested around five or six exception-related scenarios when preparing an account for a technical change such as the introduction of a mobile platform. These days perhaps 20 such scenarios need to be tested. Various features of a load including weight, delivery location, pallet count, freight class, and dates pending can change, requiring different responses in the mobile environment.

The globalization of TMS solutions has introduced even more variables. TMS technology provides powerful web-based functionality in North America, for example, but service providers in other countries may not have access to these capabilities. As a result, other solutions have to be developed. These workarounds introduce more exceptions and more things to learn about the account.

The explosive growth in the amount of information generated by TMS-managed freight networks is a reflection of the industry’s increasing complexity. It also underscores the importance of effective succession strategies. So the next time you are selecting a TMS solution, or reviewing an existing one, by all means quiz your account manager, but also make an effort to find out who else can answer important questions about your freight operation.