Supply chains. For many people their eyes glaze over when they hear the term, thinking of it as merely business school speak.
Put simply, a supply chain is how stuff moves around to produce goods and services. For example, a supply chain ensures fruits and vegetables get from farms to processing plants to supermarkets and restaurants. Another, much more complex supply chain connects suppliers all across the globe in order to build a Boeing 787.
C.H. Robinson Worldwide is an important link in the nation's supply chain. It's a Fortune 500 company that makes sure millions of tons of goods get to where they have to go. But they don’t own any trucks.
Robinson is a logistics company, matching shipments with truckers. “Maciek Nowak, an associate professor of supply chain management at Loyola’s Quinlan School of Business, likens the business to a dating service for freight,” writes Michael Lenehan in Chicago magazine:
The people who are the logistics matchmakers rely on technology and unique skills. Lenehan vividly describes the spastic ballet of one Robinson employee, Jose Molina:
He is 31, dark and good-looking, bearded and beefy, with a huge handshake and a big grin. Dressed in a T-shirt, jeans, and sneakers, he could be a trucker himself, but the rig he’s driving consists of a computer, a cell phone, two desk phones with four incoming lines, and a double monitor on which he is shuffling a bewildering variety of windows. One shows dozens of loads available from Bridgeport, Connecticut. Another is a panel of four instant message conversations he’s having with colleagues elsewhere in the building.
Click, zoom, here’s a map of the route from Bridgeport to Tampa. And here’s a “load editor” that contains all the information he needs to complete an order: the point of origin, the destination, the contents, the weight, the packaging (boxes? drums? pallets?), the price the customer is paying for the shipment, the amount Molina can offer the carrier, the specified pickup and delivery times. Is there anything special the driver needs to do when he arrives at the loading dock? When will the gate be open? It’s all here.
Click, zoom, here’s a profile of the carrier. How many trucks does it run and what kinds? What’s its performance record? How much insurance does it have?
Click, zoom, here’s an email from a trucking company Molina works with regularly: a list of drivers and their hopes for the next few days. Jeff in Bridgeport “needs money and miles.” Frank in Hicksville, New York, wants to go “straight to Orlando, no questions.”
As he moves from screen to screen and phone to phone, Molina switches between English and Spanish: from “Thanks, brother” to “Perfecto, gracias,” from “Atlanta, Georgia” to “Atlonta, Yore-iya.” He can speak Spanish into the phone while typing English into a message. With a click and a tap, he copies a carrier’s number and pastes it into the load editor, then sends a confirmation email to the trucking company. Four forklifts weighing 27,000 pounds and valued at $99,000 have just been dispatched to Eagan, Minnesota. Jeff will get his miles. No sooner does Molina finish off that arrangement with his right hand than he punches up a chortling phone line with his left. “EnriqueslinehowcanIhelpyou?”
C. H. Robinson isn’t resting on its laurels. Another part of the company is working on selling its logistics skills via software:
If Chicago Central looks and feels like a trading room, TMC is a tech startup. The office is full of transport-themed art and reclaimed wood and has a rooftop deck that offers a spectacular view of the Loop. In one conference-size room, a lone engineer sits surrounded by four walls of pinned-up task lists, flow charts, and multicolored spreadsheets that visualize customer John Deere’s efforts to optimize its six-continent supply chain. In another space, software engineers work quietly, writing algorithms that fit loads into trailers and sort through routes and rates and commodities and dates to choose the best carrier for any given shipment.
The idea at TMC is to put Robinson’s software platform, called Navisphere, directly into the hands of companies—usually “the biggest of the big,” says Kass—that want to use it for themselves. Instead of taking a commission on each transaction, as Kass’s colleagues at Chicago Central do, TMC offers tailored versions of the software on a subscription basis, giving clients the ability to book their own transportation for rates they can negotiate directly with carriers.
Read this fascinating article to better understand how stuff gets to factories, shops, and other businesses… and ultimately to you.
For those who want to explore the future of supply chains, the U.S. Chamber will host the 5th Annual Global Supply Chain Summit on May 17. Experts from industry (including FedEx and UPS) and government will talk about how technological and policy innovations can improve the supply chains—both nationally and globally--that drive economic growth and job creation.