Tired of feeling behind, reactive, or like you aren’t getting data on your operations fast enough to make necessary adjustments? It’s time we empower importers with the next evolution in supply chain visibility – understanding and harnessing Node Duration Tolerances.
Written by Reade Kidd, EDRAY
When I ran track in college, there were two goals when it came to my time: an overall goal and the lap “splits”. If the goal was to run 4 minute mile, the “splits” generally wanted to be 60 seconds each lap with the start and finish being a bit faster (hopefully) than the rest.
So throughout the race, I would know how I’m doing, if I’m ahead of or behind pace or plan for the race. I would get to the middle of the race, look at the clock and say “I probably have enough time to hit the goal”. I knew. And I wouldn’t get to the last lap and for the first time, realize that I’m behind pace and decide its time to pick it up to finish within goal. I had discrete targets that I wanted to hit for each split. I knew throughout out the race how I was doing and reacted accordingly. And after the race, my coach and I would analyze the results, figure out where I could improve and then put a plan in place to prepare for the next race.
I am convinced the import supply chain has an opportunity to change the way it thinks, to consider the “splits” along the way of the journey and not just the end goal.
This is prevalent in how we think about the overall target of minimizing detention and demurrage expenses. We generally have two big a number that we historically manage to, regardless of shipper, commodity or gateway. Give or take 5 days on dock that we want to beat. And 10 days offdock that we want to return the empty before time elapses. But we don’t think about the “splits” yet. We don’t think about the individual parts, the responsible parties, and these check points along the way. Instead, we get close to the end of the journey and say “we need to get this back because we’re close to last free day!”. That’s always at the end of the move, and we miss the opportunity to check in and manage along the way.
At EDRAY, we’ve figured this out and made these “split checks” simple and incredibly beneficial for shippers.
We call them “Node Duration Tolerances”. It is our way of breaking up the total time on dock, off dock (and other areas) into individually planned “nodes” to both manage time and create stakeholder accountability for each part of the journey. With these nodes and tolerances in place, we can discretely manage each node, keep them on track unto themselves and ultimately ensure that the overall free time is achieved. Additionally, we can set the sum of the nodes to be x days less than free time to provide buffer for potential failures along the way to ensure that even with a disruption, we’re able to execute without additional expense.
Throughout the operational cycle, we’re also capturing reasons for missing tolerance. Yes, we have live visibility to know where the container is and we see that it’s late but we also now know WHY it’s late and what we’re doing to solve each issue, which the industry struggles with today. You can’t solve this when looking at one aggregate number. And let’s not forget that there could be, and often times are, multiple issues throughout the journey that need to be captured.
The next chapter of “visibility” is answering the question “why”, which unlocks the real value.
On the back side of the daily execution cycle, we’re now getting meaningful data that we can take back to analyze, find root cause and ultimately improve the import cycle with the shipper. Through more discrete metrics and KPIs, we are jointly aligned with our shippers’ stakeholders on expectations and deliverables. It turns subjective weekly reviews into objective, data driven discussions that the industry lacks today. This not only drives down detention and demurrage but also has significant impact to overall lead time calculations and lead time variability. By moving to this next level, we see overall lead time and variability (equally important) reduce for our customers, creating meaningful change in terms of inventory carrying costs.
Lastly, this cycle is now influencing our product roadmap as we clearly see where the macro challenges are.
With the insight we have across our customers through industry benchmarks and our national perspective, we’ve established a roadmap for the next 18 months: creating significant operational change for the industry, solving the downstream financial reconciliation challenges that exist today (“why am I getting charged X?”), and creating new products alongside our customer community and stakeholders that will transform the way freight moves.
Let’s not figure out how we did in the race when we cross the finish line … let’s check in along the way.
We love chatting with shippers about these topics and would be happy to connect. Let’s do it! Contact our team here.
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