5 Facts About Tactical Transport Planning
Brian Hoey - July 02, 2020
Let’s say you're a transport planner: you’re working from a long-term operational plan that’s designed around demand estimates based on the past 12 months worth of data. Your current plan involves a run of every part every two days, under the assumption that that will keep your production plans moving without burdening your inventory planners with too much stock. Unfortunately, inventory seems to be piling up anyway, and you begin to run the risk of exceeding your storage capacity and racking up a ton of extra fees.
How do you respond in this situation? More specifically, what tools and tactics do you use to respond in this situation? In the past, it might have been hard to know what to do—you might have stopped the transport routes altogether in the hopes that things would stabilize, only to find that the result was costly stockouts. Conversely, you might have decreased the frequency with which every part was delivered, and then waited patiently to figure out whether your tactic had had the intended result. Today, you’re more likely to have advanced planning tools with analytics capabilities that can help you stay responsive. Even with those tools in tow, however, there are no guarantees; to get the most out of your technology, you have to understand tactical transport planning and the role it plays in optimizing logistics operations.
1. Tactical Transport Planning Bridges the Gap Between Your TMS and Daily Operations
First things first: transportation logistics disruptions tend to crop up when you’re longer-term operational plans don’t mesh with reality. Maybe there’s less demand for particular parts than you anticipated, maybe weather conditions are slowing down all of your transportation logistics—whatever the conditions are, it’s likely that things aren’t going exactly how you sketched them out in your initial plan. This is where tactical transport planning comes in: it enables you to get a fine-granular view of transport operations on a shorter time scale than operational planning, such that you can respond to emerging conditions in a tactical way. In this way, it acts as a kind of bridge between your transport management system (which might give you a slightly broader planning horizon) and what’s actually happening day-to-day in the supply chain.
2. Tactical Transport Planning Is a Fundamentally Data-Driven Process
Since the idea behind tactical transport planning is to prevent over- and under-reactions to emerging conditions within your logistics chain, it stands to reason that you’d want to have as clear a view as possible of how conditions are likely to evolve. The best way to make that happen? Data integration. Essentially, with live datastreams incorporated into your planning software and workflows, you can use advanced predictive and prescriptive analytics to find the optimal route, tour, or network change for a given set of parameters. From there, you can continue adjusting those parameters as new circumstances emerge, always staying one step ahead of the disruptions that often plague logistics processes. Of course, real-time data isn’t something that just happens by sheer force of will—to truly achieve it, you need software integration that prevents silos and promotes connectivity. You’ll also need to be sure that you’re gathering the right amount of data in the first place, which could be a question of integrating with your suppliers’ or clients’ IT, or of implementing IoT devices and RFID chips throughout your value chain.
3. It Powers Proactive, Responsive, Real-Time Planning
Like we said above, once you’ve broken down silos and introduced crucial operational data into your planning workflows, you can use advanced analytics to optimize your decision-making. In this way, your tactical transport planning finally puts you in a position to be proactive—rather than reactive—when it comes to making short-term logistics decisions. Where, previously, the only way to make plans was to assume that past conditions would hold, these analytics workflows put you in a position to prepare for ever-changing scenarios. This might, on the one hand, look like transport routes that aren’t finalized until the last minute in order to give your planners room for adjustments—or it might mean closer consideration of backhauls and LTLs based on your data. Either way, it puts you at a competitive advantage over those who just plow forward with existing plans even when they’re not working.
4. Tactical Transport Planning Makes Excel Spreadsheets Obsolete
So far, you may have gotten the impression that tactical transport planning is something you do with software solutions in sophisticated digital environments—and you’re basically right. Though the requirements to make this process work aren’t extraordinary by any means, they do mean ditching the spreadsheet when it comes to this type of planning. Why? Because plans created in spreadsheets are unconnected, difficult for stakeholders outside of your immediate vicinity to access, and incapable of analytics integration. If you’re currently using an Excel file to come up with your short-term logistics plans, switching to a more digitized process might seem disruptive at first, but once you’ve reduced the costs associated with transport logistics disruptions you’ll wonder why you stuck with spreadsheets for so long in the first place. At the end of the day, your tactical transport planning module will make Excel-based plans seem like quaint relics of the past.
5. It’s A Key Component of Logistics 4.0
An analytics-driven process like the one we’ve been sketching out above can obviously add significant value on its own—but that's not the end of the story. Once you’ve got a system in place that’s based on connectivity and interoperability, it can easily slot into larger logistics and transport planning workflows that prioritize responsive, data-driven planning. In this way, tactical transport planning can be a key piece of the puzzle when it comes to driving towards Logistics 4.0 adoption. At the end of the day, discrete improvements in short-, medium-, and long-term logistics planning will all accumulate to create a smart logistics chain that does for transport management what Industry 4.0 is poised to do for factories. As Logistics 4.0 technologies and paradigms become more mainstream, it will be the organizations who are already committed to connectivity, transparency, and data-integration who will be poised to reap the benefits.