The Freight Transportation Value Proposition

 

Executive Summary

If an excellent product, at a competitive price; timely and accurate information; and superior customer service are the essential elements for success, why have only but a very few astute companies availed themselves of the business discipline most capable of achieving these objectives?  Identifying those business disciplines that could best influence corporate success and performance may not even include transportation in the first, second or even third pass, and if transportation were finally identified, it would probably be recognized for only one of its many dimensions.

 

Unlocking the enormous potential of transportation’s vast resources is a critical success factor and an achievable goal! 

 

Long considered a single function, whose description is limited to that portion of the industrial process that begins with the placement of freight on or in a container and ending with its offloading, freight transportation’s robust opportunities and benefits have remained well below the industrial radar for all but a few perceptive companies.  Focusing the interdisciplinary intelligence on freight transportation holds the promise of unleashing a powerful corporate resource whose subsequent strength will continue to maximize the individual departmental capabilities while driving down costs and improving operations.

 

The singular view of freight transportation may have evolved because of corporate silos or because it has been taken for granted; there are probably as many reasons as there are companies.  Whatever the reason, freight transportation remains one of industries least understood and least utilized business disciplines.  Unlocking its enormous potential requires an enlightened corporate culture.

 

The rich and robust opportunities that reside in freight transportation may only be realized if the corporate stakeholders can be presented with a persuasive proposition.  Because each of us has a different way of looking at things, a cogent argument that can be embraced by all of the corporate stakeholders must be framed and articulated.  Transportation’s value and its corresponding proposition may provide the motivation for the stakeholders to begin to understand and appreciate the importance of freight transportation. 

 

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This white paper will consider the “freight transportation value proposition” as a means to achieve corporate recognition of the importance of freight and freight transportation.  It will also demonstrate transportation’s ability as an enabler to evoke a company’s potential; and its value as a key contributor to corporate profits, performance, and success.

 

The purpose of this white paper is to present a methodology that will create the corporate awareness and sensitivity necessary for a healthy and productive freight transportation environment.  A healthy environment provides the basis for transportation advocates to deliver transportation’s enormous potential and will position all of the corporate stakeholders as contributors by concentrating the interdisciplinary support necessary for its huge potential to be realized.

 

Value Proposition

According to Michael L. Perla in his article, “What’s Your Value Proposition” that appears on MarketingProfs.com website, a value proposition is described as,

 

“an offer to some entity or target in which they (the possessor) get more than they give up (merit or utility), as perceived by them, and in relationship to alternatives, including doing nothing.  In terms of form, a value proposition is generally a clear and succinct statement (e.g., 2-4 sentences) that outlines to potential clients and stakeholders a company’s (or individual’s or group’s) unique value-creating features”.

 

Perla goes on to say that, “a value proposition has two sides, giving and receiving, therefore a determination has to be made regarding equality—if not equal why and for whose benefit and for what purpose”. 

 

The objective of every value proposition is to persuade someone to act in a way that you want them to.  Making this happen requires a well orchestrated plan and demands attention to an orderly succession of prioritized events.  Perla suggests the following events, 

 

Identify a group and determine what they value.  Knowing a particular group or individual’s perspective is crucial in understanding their specific value drivers.

Look to what they actually do as a true representation of their values.

Each specific value description is a fact that must be understood in formulating the proposition.

Become “fluent” in a company’s or individual’s language.

 

Cogent Argument

A cogent argument must be crafted that will respect the above requirements.  It must be persuasive and capable of motivating the group.  A broad platform that compliments the corporate culture; understanding its goals, objectives and philosophy will establish the necessary common ground.  While several methods of approach are available, the typical consulting approach has been lacking in its ability to effectively and efficiently gather group support because it is “exclusive” in nature.  An “inclusion environment” is absolutely necessary in order to identify and enlist the stakeholders. Additionally, “inclusion” will immediately harness the energy and support of the group, and instantly focus the groups’ attention.  A very successful method of approach that will achieve these objectives is TransportGistics’ “convergence practice methodologies”.  Based on “inclusion” they are well suited for the corporate behavioral change necessary to achieve an understanding and appreciation of freight transportation and its future role as a key contributor.  A clearly focused, positive group attitude will naturally evoke the interdisciplinary response required for the endgame.

 

A cogent argument to be effective must first identify the jargon and establish its shared definitions.  Becoming “fluent in a company’s or individual’s language” is a demand that must be satisfied at the very beginning of the process.  Crafting the argument, because of the well entrenched singular view of freight transportation held by so many, makes it incumbent upon the advocate to determine the relative importance of each term they expect to use; they must then create a corporate understanding of their meaning and influence.  The resulting common ground is the basis upon which the value proposition can be drafted and effectively articulated.

 

Identify a Group and Determine What They Value

Because freight and freight transportation touch every part of every company as well as providing the link to and amongst all of the trading partners in the supply chain, potential group members could literally come from every part of the company.  To begin the process, stakeholder values that can be best served by a healthy and productive freight transportation environment must be identified.  For the value proposition to be most effective the group must understand the corporate values that can best exploit the freight and freight transportation attributes.  This can be achieved by distilling the individual stakeholder values into common values that will be served by a healthy and productive freight transportation environment.  To satisfy this requirement, the transportation professional can call upon their specific and relevant experience to identify examples.  Additionally, TransportGistics previous white papers have identified and described a myriad number of transportation’s attributes that can also be utilized.  The most prolific examples that can be gleaned from TransportGistics’ white papers come under, “timely and accurate information” and the most specific would address “superior customer service”. 

 

Zeroing in on the company’s management style will support the identification process.  As an example, if running the company by the numbers is an acceptable notion, then Treasury, Finance, and Accounting are obvious stakeholders; and if the need for continuous customer acquisition is an important objective, then the Sales Department is also a qualified stakeholder.  Stakeholders that bring credibility and visibility offer collateral support and carry the energy to sustain a healthy and productive freight transportation environment.

 

A Basis for Group Value Drivers

Knowing a particular group’s perspective is crucial in understanding their specific value drivers.  Exposing freight and freight transportation’s values and relating them to each stakeholder’s corporate role is the basis upon which group value drivers can be ascertained.  To assure group understanding of the value drivers, “corporate fluency” must be achieved.  Shared definitions that are simultaneously stakeholder specific and corporately understood offer the best opportunity for achieving common value drivers. 

 

By definition, “transportation” is a conveyance, and “freight” is the product being transported.  “Freight transportation” is the physical movement of goods or products.  It is at this time that a fresh perspective, appreciation, and understanding of freight and freight transportation can and should be developed by the transportation professional.  This vantage point should provide the opportunity for the group to immediately recognize that, neither freight, transportation nor freight transportation exist in a vacuum nor does the freight transportation process begin when a shipment is picked, staged, or loaded; nor does it end with its delivery. 

 

Today’s freight paradigm recognizes freight at its birth.  At the beginning of its lifecycle, freight is assigned an identity, typically described as an SKU; next, it is placed in inventory and located in the warehouse.  As part of the inventory and warehouse, freight continues its journey into various other corporate areas and departments while the freight alter ego collects and appends the associated data and information.  Understanding the “freight lifecycle” should allow the group to recognize the corporate role that freight and freight transportation play and their influence on specific corporate areas; Vis a Vis on stakeholder departments. 

 

The group value descriptions are facts that must be understood in formulating the proposition.  Establishing a common ground for Treasury, Finance, Accounting, and Sales is the basis upon which shared values can be identified.  Collaboration is prominent feature of transportation.  Collaboration amongst these departments is ongoing and understanding the department roles as they relate to freight and freight transportation will allow the group to formulate a unified proposition. 

 

By looking to what these departments actually do as a true representation of their values; we can see the Sales Department’s efforts manifested in developing profitable sales.  Transportation can supply timely and accurate tracing and tracking information which is needed to assess customer satisfaction and related sales performance metrics.  The financial area of the company needs to close the accounting periods on time and transportation can meet those reporting schedules because that information flows directly from the transaction stream.  The size of most freight transportation budgets is very capable of offering cash management opportunities.  The Treasury Department can easily obtain the required information from transportation data.

 

The Freight Transportation Value Proposition

Because transportation remains one of industries least understood and least utilized business disciplines, unlocking its resources will create significant opportunities for corporate success, performance, and profit.  Persuading the company to recognize the importance of the transportation discipline is the goal of the value proposition.  Crafting a specific freight transportation value proposition requires a keen understanding of the corporate culture.  Understanding the individual goals and objectives are the drivers that will fashion a succinct freight transportation value proposition.

 

Conclusion

The global economy has significantly increased competition; more than ever before companies are faced with good competition and spoilers alike.  To successfully compete and gain the competitive advantage, astute companies must recognize, understand, appreciate, and use all of their resources.  While world events have focused attention on freight transportation and logistics, only a handful of companies have recognized and even fewer have exploited the vast resources that exist in freight and freight transportation. 

 

Overcoming industry’s long standing singular view of transportation has been a formidable task.  For the transportation discipline to maximize its enormous potential, it must be recognized as a key corporate contributor.  The value proposition has been a very successful method for achieving corporate goals and objectives.  By embracing this method of approach, the transportation professional has the opportunity to utilize a currently successful method to achieve corporate recognition of the importance of freight and freight transportation.  Selecting the appropriate stakeholders creates a forceful group that is empowered by common value drivers, forged into an alliance whose interdisciplinary knowledge will continue to maximize transportation’s contribution to corporate performance.

 

About TransportGistics, Inc.

TransportGistics is a global, multi-product and services company that provides market leading, simple, incremental solutions for transportation management and logistics functions within the supply chain.

 

TransportGistics commitment to education is portrayed through its advancement of professional logistics and transportation programs.  Its white paper site presents important and timely transportation and logistics subjects each month, and is regularly visited by more than 125,000 clients and readers representing companies in the private and public sectors, universities and governments, worldwide. TransportGistics is a founding  partner at the Center of Excellence in Wireless Internet and Information Technology at the State University of New York-Stony Brook.

 

Continuation

Please consider this white paper as a continuum in this subject area, succeeding white papers will address common issues and address them with common solutions.  We encourage our readers to direct any specific questions or comments to papers@transportgistics.com.

 

Disclaimer

The information presented herein represents the opinion of the author, but not necessarily the opinion of TransportGistics, Inc.  This white paper is not presented as a legal position or as a recommendation.

 

“Freight Lifecycle Management”, “Convergence” and “Today’s Freight Paradigm” are sales marks of TransportGistics, Inc.

 

 

 

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