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Note: This is the latest installment in a series of posts where I discuss the current landscape for logistics service providers (LSPs). In the first post, I discussed some of the top challenges that they face. In the next two, I discussed a broad set of opportunities that I am calling “Coordination Services and Harmonization services“.
The third category of opportunities for LSPs that come with the cloud network model can be thought of as “orchestration” services. Now, there’s been a lot of talk in recent years about “orchestration” to the point that the concept has become over-hyped. But what I’m going to discuss today is very real and the most advanced logistics providers can deliver them today.
With orchestration, an LSP is afforded the visibility, monitoring, and operational insights required to ensure client service levels are maintained no matter who is performing actual supply chain tasks.
Orchestration services focus on the complex permissibility and ownership challenges that must be managed when incorporating multiple tiers of specialty logistics providers and documentation enablers on top of the standard buyer and seller permissions. With orchestration, an LSP is afforded the visibility, monitoring, and operational insights required to ensure client service levels are maintained no matter who is performing actual supply chain tasks.
Orchestration is an area is of special importance given the number of providers required for increasingly complex international moves. In addition to tracking ocean carriers and sailing schedules, these moves have grown to include consolidators and feeder vessels, as well as the different providers associated with final delivery modes and specialized services. One approach to this (that I am working on) includes developing a new generation of “milestone managers” to extend the capabilities afforded by today’s event management services and tracking milestones.
The most challenging orchestration scenarios involve international transportation processes where the documentation complexities of international banking, insurance, and customs are combined with the physical handling and movement challenges of multi-leg transportation moves often involving multiple modes and service providers. These handoffs often create blind spots for the shipper where delays often jeopardize on time performance or cause expedite conditions which greatly impact landed costs.
Another orchestration example occurs when an LSP can combine current knowledge of supply chain needs (derived from a cloud-enabled real time view) with the understanding of key lead times, which means decisions are made at the appropriate time without adding nervousness and extra work to supply chain operations. For example, One Network’s port arrival milestone manager includes planning events associated with validating mode of final delivery. This activity reviews the current supply and demand positions for those orders in the container and flags opportunities for change. A shortage may lead to changing the inland move from truckload to team or expedite, while a surplus may provide the opportunity to transition that container to rail to save on the cost of the inland move and defer storage fees or warehouse congestion if inventories are above plan.
The key takeaway is that the next generation of cloud-network platforms provide the capability to proactively manage end to end supply chain processes through multiple tiers of trading partners and logistics service providers. With orchestration services, LSPs can provide a global backbone to support their multi-national clients, global processes, and international operations.
In future posts, I’m going to continue to discuss some of the opportunities that LSPs have to add more value to their customers. If you’re impatient however, I suggest you read the new whitepaper “8 Opportunities for Today’s Logistics Providers“.
- How to Optimize Port Throughput in Global Supply Chains - March 22, 2018
- Big Opportunity for Logistics Providers?Supply planning and inbound services…. - October 26, 2015
- How logistics providers can offer order promising and delivery services - August 7, 2015