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The usefulness of technology among shippers remains undisputed. Through advanced transportation management systems (TMSs) and greater automation, shippers can reap an unparalleled competitive advantage. What happens when shippers simply forgo implementing shipping technology, and how can shape their future demise? Although it sounds ominous, shippers must be willing to become tech-savvy, or they will lose any existing competitive advantage they have.

Shippers Must Weigh In-House Versus Off-the-Shelf Shipping Technology Solutions.

The first struggle with implementing shipping technology in an enterprise goes back to considering in-house versus outsourced tech solutions. In modern shipping, there are numerous off-the-shelf tech solutions and platforms that can enhance a company’s productivity. As mentioned in this webinar, autonomous vehicles and third-party logistics providers (3PLs) are making shipping technology affordable for small to mid-sized shippers, leveling the playing field at last and improving supply chain efficiency across the board. In addition, shippers in this stage of implementation must also consider how TMS solutions and technology profitability has increased.

Standards in TMS Capacity and Profitability Have Evolved.

Standard TMS capacity is changing. While its origin focused on improving outbound shipping practices, today’s systems can leverage both inbound and outbound operations to create a unique business strategy. This strategy is designed to enhance efficiency and drive competitive advantage for companies that lack internal resources or financial capital to invest in traditional technologies.

Adoption of TMS Remains Steady.

There is another issue shippers face. Adoption rates of TMS and other like technologies have continued to fall below industry experts’ opinions. As explained by Talking Logistics with Adrian Gonzalez, a mere 33 percent of shippers have adopted TMS solutions. However, growth in the number of shippers reporting usage of such technology may lead possible inconsistencies among statistics. Meanwhile, mergers and acquisitions among shippers can still collude statistics. In other words, actual adoption rates may be higher, but changes in the industry overall continue to contribute to a 33-percent statistic. So, why are shippers faced with greater competitive advantage and how does that translate into greater use of shipping technology?

Driving Forces Behind Shippers’ Adoption of New Tech.

There are three primary driving forces behind shippers’ adoption of new technologies, which include the following:

  • Omni-channel sales are growing. More customers demand seamless integration across brick-and-mortar and online shopping venues.
  • Timely and accurate shipments. More customers want to receive the right package, the first time and faster than ever before.
  • New regulations. Increasing government oversight in the U.S. and abroad will drive companies to re-evaluate compliance programs and increase visibility.

Now, how does shipping technology address these concerns while improving competitive advantage? Fundamentally, increased technology can isolate issues with a supply chain and identify ways of correcting them. This may be accomplished automatically through machine-to-machine systems, “The Internet of Things,” or by leveraging Big Data to give decision makers the information they need to create the best system. In addition, technology can improve a company’s competitive advantage in five ways.

  • Efficiency Gains. The first step to gaining competitive advantage through technology rests on efficiency. If it costs the company less, the cost to the end-user, the customer, decreases. In turn, customers are more likely to shop with your company, not your competitor.
  • Better Responsiveness. As more customers want better, cheaper products, your company must become more responsive. This is about more than just shipping the right products. You must ensure inventory levels do not cost sales, and you must still work to make an ever-increasing lineup of products available. You need better insight into what products will sell, and how to make the per-product overhead cost as close to zero as possible.
  • Compliance. If you knowingly or unknowingly violate compliance statutes, your company will pay for it. Although the new administration is focused on restoring manufacturing in America, companies that fail to meet the administration’s standards, which are subject to change, may face large fines and penalties.
  • Analytics. Using analytics is also changing how shippers implement technologies. Analytics can be leveraged to bring organizational silos together, improving omni-channel sales processes and benefiting the whole supply chain. However, analytics that are not maintained will lead to cost increases across your company, reports CIO Review. In other words, you need systems that will track and verify all insights for accuracy and profitability by “cleaning data.”
  • Sustainability. The final piece of the puzzle is sustainability. If your organization has sustainable practices in place, you can achieve better scalability and responsiveness to your customers and shareholders. However, companies that do not improve efficiency cannot attain sustainable practices, and they will be lost as their competitors reap the benefits of implementing technology-driven practices.

Technology Will Become Necessary to Maintain Competitive Advantage. Period.

Shippers that do embrace technology will be able to continue meeting rising customer expectations, improve retail configuration, increase direct-to-consumer sales, respond to industry consolidation, move operations to the cloud, focus on improving back office processes, improve and attain operational benchmarks and prepare for greater innovation in tomorrow’s technology. Since customers will only demand greater, cheaper and faster service from shippers, shippers that fail to implement innovative, game-changing technologies, like TMS systems, will lose competitive advantage.