Jason is the hardworking owner of a freight forwarding fi rm. In other industries, he’d be reaping hugerewards.

Here, he’s caught between a rock and a hard place. His clients demand almost infi nite amounts of customisation and jump ship if he can’t accommodate their demands.

Yet competition is so fi erce that he’s driven to standardise so he can compete on cost as well! It seems an impossibledilemma.

If this sounds like you, rest assuredyou’re not alone.

In fact, it’s generally accepted that this is a widespread problem among freight forwarders — one that affects profi tability and impairs the ability towin and retain customers.

This article outlines a methodology (one used by world leaders in other industries) that resolves the dilemma between customisation and standardisation – fi nally allowing freight forwarders to dramatically improve service, win more clients and reduceoperating costs.

The problem with never-ending customisation
In traditional freight forwarding setups, winning additional clients means more work for individual operators. Thin margins mean no extra staff, and, often, a client is ‘siloed’ to a single operator who is already juggling several at once. Moreover, customisation increases thecomplexity of the work.

In theory, one-on-one service is more effective, more easily customisable, less prone to mistakes and more likely tokeep clients happy.

In practice, an operator delivering personalised one-to-one service is stuck in a one-person-does-everything time warp. Forced to multitask, effi ciency is reduced and output slows. The operator’s capacity is constrained, and the extra time required to fi nish eachjob increases costs.

That’s bad enough in a highly commoditised industry where it’s imperative to keep prices low. However, it also multiplies the potential for (and number of) critical failures whenever operators rush to expedite urgent tasks. This inevitably occurs at times of highdemand.

Bottlenecks arise and operators are forced to compromise between meeting delivery deadlines (increasing processing speed) and maintaining the level of personalised service (accuracy). Either way, the inevitable result iscustomer dissatisfaction and churn.

This is why personalised service initiates are counterproductive – impeding service delivery, increasing costs and, more than likely, costing youclients in the long run!

But what is the solution?
The good news is there is a solution. The even better news is it’s as simple as looking for ways to standardize your service customisation. If that sounds likea paradox, rest assured that it is not.

Inside the ‘normal’ variation of every freight forwarding job, the underlying processes are fundamentally the same. That is: the discrete tasks that make upfreight forwarding jobs are standard.

Only the sequence of individual tasks and the presentation of reports alter – depending on the specifi c demands of the customer.

Realising this offers the opportunity to use a process that dramatically improves the efficiency of your operations while retaining the customisation and fl exibility your customers demand.We call it the Scalable Approach.

Divide and conquer
The Scalable Approach is simply a matter of applying the same logic to freight forwarding and logistics that a production manager applies to the design of a manufacturing process. It’s the same logic that Ford uses on car assembly lines, or McDonald’s uses inmaking its burgers.

Begin by dividing your job process into individual tasks, pre-allocating complex tasks to skilled labour, and lowleveragework to less skilled labour.

This eliminates multitasking, and ensures skilled workers only do highleverage tasks such as tariff classifi cation. You don’t want them to work on lowleverage activities such as data entry andinadvertently infl ate costs.

Just as in a manufacturing operation, each task becomes the responsibility of a specialist, with jobs being passed along the chain according the pre-determined sequence, and being checked off at each point. Jobs can even be ranked (allowing urgent jobs to be expedited through the system more quickly) and at the end, they are signed off by a processcontroller.

Contrast this with situations where operators carry out every task in processing a job. Daily they juggle between data entry, document chasing, import (or export) classifi cation and a host of other tasks – and usually at the expense of a specifi c task they’ve beentrained to do and are best at!

The benefits to business
The good news is that the Scalable Approach offers operators andmanagement four vital benefi ts:

• Cost reduction: using division of labour to delegate ‘low-value’ clerical tasks to process workers while skilled labour concentrates on complex tasks reduces costs.

• Speed improvements: a production line operation reduces multitasking. Operators can concentrate on a single task, improving speed.

• Workflow transparency: management remains aware of the situation of every shipment — meaning far less chance of missing deadlines.

• Error reduction: Because both multitasking and last-minute expediting is minimized, the error rate is reduced.

At CargoWise edi, we’ve recently put the fi nishing touches on a whitepaper that outlines the Scalable Approach in more detail.

To fi nd out more about what you can do to reduce the bottlenecks, increase processing speed and maintain your quality of service, request your free copy by e-mailing:

[email protected].

The Scalable Approach in practice 1. Initial customization: The job is customised on a control sheet; 2. Assignment: The job goes to the fi rst operator. The control sheet provides this information; 3. Processing: The job goes from operator to operator, following the control sheet task sequence; 4. Sign off: The job is signed off by a supervisor/broker at key compliance points; 5. Invoicing: Once the job is complete, the control sheet passes to accounts for billing. This approach reduces costs while increasing the ability of the business to deliver promised service. Jobs are processed faster and more accurately while competitive position is improved. The ultimate result is the ability of the organisation to win and retaining clients skyrockets.

 

This article was contributed by Sydney, Australia-based CargoWise edi, a leading international freight forwarding and customs broking software developer. Established in 1994, the company has 180 staff in 12 offi ces and more than 1,000 client sites and 25,000 users in 40 countries.