Chris Ricciardi | Logistical Labs
In the 2018 World Cup, Croatia – a tiny country with a population of only 4.3 million – made it to the finals despite having all cards stacked against them. Small countries rarely reach the finals, yet Croatia defied the odds, won game after game and made history.
The sports world is full of underdog stories like this – from the 1980 “Miracle on Ice” Olympic hockey game in which Team USA’s scrappy band of mostly amateur players defeated the battle-tested Soviet Union squad, to the 2017 Super Bowl where the Philadelphia Eagles won their first championship ever against the New England Patriots, an NFL dynasty. Sportscasters and fans alike often tout these wins as miraculous, focusing on all the reasons these teams shouldn’t have succeeded – whether it’s lack of experience, size, budget, or something else. But often, victory is not a miracle at all. There is a perfectly logical explanation for why these teams emerge as winners.
In the business world, as with sports, success doesn’t automatically come to those with the deepest pockets or best talent available. Companies that experience continued, repeatable success know it doesn’t just happen by chance.
Limited Resources Force Creative Solutions
One distinct advantage the Croatian team had over their opponents was their mentality. Croatia is a country that has been plagued by civil war, and many of the team’s players grew up in unstable economic conditions. With deprivation comes improvisation; those who are used to working with limited resources quickly learn to do more with less and find their strengths in other forms. This mentality often breeds creativity, perseverance, and the ability to tackle challenges better than opponents because the stakes are higher.
Small businesses in the logistics space can use limited resources to their advantage by working smarter, not harder. Companies don’t need to build the best proprietary technology, or hire top industry talent to compete, but they do have to use what they have wisely. In the 3PL world, the sales process is time consuming and involves several steps: prospect customers, analyze their needs, research cost, source the load, etc. Efficiency and revenue per employee are stagnant and turnover is common. What if brokers could buy and sell more efficiently and accurately? What if sales reps could talk to more customers per day, with fewer phone calls, mouse clicks and keystrokes? Even shaving off just a couple seconds per rep, per day could have a big impact over time. By focusing on efficiency gains driven by a smart application of data and technology, companies can outperform their larger competitors with less effort.
Data Science as a Force Multiplier
Out of all the sports underdog stories, one of the most impressive is the Leicester City win in the English Premier League during the 2015-2016 season. Leicester did not have the most talented or experienced players, and their track records for possessions, passes, and penalties were some of the worst in the league. Yet, they defied 5,000-to-1 odds and won the championship. How? They hired an innovative sports science and medical team that leveraged data to improve performance and reduce injuries. For example, they collected data on injuries and were able to identify and bring overloaded players off the field at just the right time. A culture of data-driven decision-making is still a large part of the team’s strategy today.
Data analysis is similarly having a huge impact on logistics operations. Deployed correctly, technology can be used as a force multiplier to empower a small freight brokerage to execute and perform like a much larger one. For example, machine learning technology can aggregate data, identify patterns, and essentially “learn” as feedback is continuously added to the system. Smart pricing platforms can automatically adjust rates based on mileage bands, upcoming holidays, or market conditions and help users select the best transportation mode based on the customer’s needs.
Take on a Startup Mentality
Though a creative application of resources and innovative technology can lead small and emerging businesses to victory, that doesn’t mean large industry players can’t also find creative ways to fight back. For example, the concept of the “digital broker” has emerged in recent years, with many technology-focused transportation startups being labeled as “Ubers for Freight.” These companies have flashy websites and mobile apps that promise sophisticated carrier matching and automated pricing.
Legacy logistics companies that embrace big data should not be afraid of these newer startups because they likely have access to the same information – they just aren’t connecting the dots as well. With the right algorithms and integrations, established companies can also offer sophisticated carrier matching and automated pricing – perhaps better than digital brokerage startups because they have the added advantage of industry knowledge and deeply established relationships.
Whether it’s speed-to-market when rolling out a new product or service, responding to quote requests faster, or shortening the internal learning curve for employees, companies that think outside the box and leverage data in new ways will have a competitive edge and emerge victorious.
Chris Ricciardi is Chief Operating Officer of Logistical Labs, located in Chicago, IL. He can be reached at [email protected]
Photo Credit: Titima Ongkantong/Shutterstock.com