1% profit in sports logistics
For the last 20 years the progress made in logistics resembles a professional sport, in which nuances can make a difference. ‘Have you heard about marginal gains – a doctrine of marginal profits, based on small, gradual improvements in each element of preparations, thanks to which Robert Lewandowski is one step ahead of other footballers? We have observed a similar process in logistics for 20 years – the best use their small advantages, the sum of which makes them leaders.’
The world of revolution in logistics discusses game-changers, block-chain and machine-learning, whereas humans are being forgotten. Yet, so little is needed to combine our ambitions, technology and original ideas to make a difference. Such value in sport is like standing on the podium of the World Cycling Championship thanks to crossing the finish line by the tire width. How to build this 1% in logistics?
Team play on production
A few years ago I took part in a conference, at which a manufacturing manager boasted that he had gained 4 minutes of working time for each employee with one simple solution. The place at which they changed clothes was moved from the end of the production hall towards the entrance so that the employees did not waste time on walking there. He did similarly with other rooms and managed to bring them closer to the work stations. If people were machines, this solution would be the classic lean management approach. If this principle is applied for people, the staff turnover in this company can result in a total decrease in productivity. Thus, can this productivity be improved in the environment through e.g. traditional building of mythical team spirit and internal motivation?
The example of a football coach – Jurgen Klopp, who invited a surfer to one of his preparatory training sessions, comes with help here. Within this training footballers had to stay under water as long as possible. The first attempts ended after 20 seconds. For the whole day the surfer built up a sense of trust between the players, awareness of their own skills and a gentle spirit of competition. At the end of the day(!) some footballers were able to hold their head under water for 5 minutes. Such self-confidence was one of the factors that let Liverpool FC become the Premier League champions after 30 years, often winning their matches in the last minutes, when most athletes could barely run. Besides, since that coach took over the team, the players have run the largest number of kilometers in the whole league. The differences are approximately 1-2% depending on the season.
Fuel constitutes the largest cost of an average transport company. As a passive participant of the drivers’ groups, I heard stories of “cutting” salaries when the combustion limit was exceeded. It was usually explained by the lack of belief in the driver’s honesty. An eco-driving training is not something new, it costs around 120$ and should be included in every starter package for a new driver. How to encourage experienced drivers to fight for at least 1 litre of fuel per 100 km? All that one has to do is introduce gamification – a model that makes some elements of the job a challenge. I came across this in Trimble telematics solutions, where drivers can see each other’s results. What will an employee gain in addition to the bonus for the highest combustion? Reputation and the first place in rankings build a man and his relations with others. It is easy to calculate that this 1% for 10 vehicles (tents) gives a saving of 380$ net monthly.
We like boasting about our results, we just need a bit of support, like a developer of the application for professional and amateur cyclists – Strava. This program conquered the market by introducing the so-called segments. A segment is a possibility of setting and going along route sectors, in which the cycling time is checked. Everyone, who covers a given distance, will be able to see his results compared to others – both strangers and friends. Each time the cyclist gets closer to the familiar segment, he will certainly accelerate. I know that because I behave in the same way. When we have a chance to compare our statistics with others, this 1% profit will give us great satisfaction.
Logistics is a race against time. Couriers are aware of this fact as every lost minute is a problem to them. Recently, while talking to an employee developing a FireTMS route planner, I heard that UPS is not the only company which advises its drivers not to turn left as it does not pay off. An experienced courier driving on fixed routes knows all the places where he loses time to get into traffic. In domestic or international traffic, knowing that it is cheaper to put a few kilometers in is not only worth implementing, but also profitable. Route planners bring substantial benefits here. Even if the profit of reaching the ramp on time is marginal.
Speaking of ramps. As a manufacturer of software for simulating the loading of goods, I was wondering what Goodloading users usually save money on. A great number of them just check if a load can be accommodated, others calculate how much they can fit. What’s surprising, it is also the desire to use the application for cooperation between the planner and the person responsible for loading. Thousands of PDF documents with a load project are sent by manufacturers, forwarders and planners every month in order to save time or avoid problems with proper arrangement. That is why we decided to expand the modules concerning relations by creating loading animations, mobile previews and integrations in which other systems (TMSs, telematics or route planners) will see the effect of cooperation. And finally, can we measure it?
The conducted research shows that optimization of load units allows to gain, compared to the so-called rational solutions, more than 1% of cost reduction in the supply chain*.
Marginal gains is a cycling term. It relates to the player’s behaviour when he’s cycling, as well as the use of advanced technology. The term was introduced by the coach of the Sky team, whose athletes have won the Tour de France 7 times in the last 10 years.
*Piekarska M., Mrozek-Kantak J, Solutions to the most important problems of modern FMCG supply chains in Poland, The Polish Logistics Congress, The Institute of Logistics