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Testing Better Decision-Making: From Strategic Evaluation to Pilot

How Mike - the logistics manager of a mid-sized manufacturer - wants to reduce transport costs. What's important to him, what he's looking for, and what challenges are on the way,

With this article, we try to summarise the experiences of a typical new TNX customer. What issues they try to solve, what challenges linger along the way, and how to move from a small pilot to a full-fledged implementation. It is given as a narrative, with fictional characters.

The Motivation

Mike is in charge of logistics at a mid-sized manufacturer. His budget covers inbound supply transport, warehouses attached to production sites, primary transport to regional DCs, and secondary transport to customers. He reports to Sarah, the chief operating officer.

Supply chain is a core function of the business, as it is for many manufacturers. The company has pledged to cut costs. The largest cost centres are raw materials followed by transportation.

Raw material prices are set by global commodity cycles, so the company is out of luck making any major cost reductions here. That leaves transport as the key part of the business to cut costs.

Status Quo

The company-owned private fleet often runs empty and is justified by a service commitment that is outdated. Subcontractors are chosen based on convenience of the dispatching team. The dispatching team is run like a chiefdom, without any accountability on decision-making.

Mike has only been in his new role for 7 months, having joined from a competitor. He has a tough time understanding why his dispatching team chose a particular subcontractor or vehicle for any job. And each job that is done suboptimally is contributing further to Mike’s problems. Forget structuring those decisions: he can’t even accurately report on them.

The Dream

Mike would like to commit to lower transport costs by improving the quality of on-the-day decision-making about how to use his private fleet and contracted carriers. Any solution needs to not just result in lower costs, but also in simpler planning processes and an increase in transparency.

He wants to move forward quickly, and not wait for his IT department to play catch up. He prefers a solution that works almost out of the box, is applicable to most of his business, and that he can test out without significant upfront cost.

Choosing a Solution

Mike decides to try TNX. It covers both his private fleet and subcontractors, and the fee structure makes it safe. If it doesn’t work, he won’t be paying for it. And if it does work, the fees are paid for by cost savings on transport.

Sarah supports the decision. The dispatching organization though is hesitant, fearing a loss of independence and adaptability in their business interactions.

Mike sets a pilot scope and a kick-off date. A laneway will be dispatched via TNX for a couple of months. One dispatcher gets selected to work exclusively with TNX.

Mike himself won’t be using the new system daily, but he’ll finally get the kind of control and visibility he missed before.

In the next part, we will have a look at the results from the pilots, along with a view on how to scale from the pilot phase to full-fledged application.