Why Traditional ERP Not Paying Attention to This Logistics Problem

In my last few posts, I have elaborated on the challenges faced in the Indian transportation sector and how through our start-up, Return Trucks, we have tried to find solutions for them.

Recently, we had a major corporate client complaining to us that their plant logistics manager spent all day trying to source trucks from transporters. The problem was that there was no visibility of the transaction for the corporate office. They had no way of telling whether the truckers were overcharging them by creating an artificial demand or not.

The client asked for our help and this got us thinking. We studied the current workflow in the Indian transportation sector and this is what we found out…

#1: The Plant Logistics Manager takes the printout of current loads from the ERP that needs to be shipped and starts calling the Transporters.

#2: The transporters again source the trucks from agents and market.

#3: There is a back and forth negotiation on the price and availability between the Plant Logistics Manager and the Transporters.

#4: Oftentimes, the Transporters create an artificial demand for their trucks to charge a higher price over their services.

#5: They get away with this because the corporate office has no visibility on their operations. Why? All the Transporter information and truck documents such as registration papers, insurance, etc., are maintained only at the plant level.  

We came to the realization that traditional ERP was simply not paying attention to this massive logistics problem. Why?

Traditional ERP, whether it’s Oracle or SAP, has no proper provision for capturing the Transporter information, or for that matter, the truck documents.

It’s hard to fathom why not, as it would be really simple for ERP to develop a workflow between the Transporter and the Logistics Manager, but they have not. It’s like they have neglected this critical link in the chain deliberately. I wondered why.

I did some digging of my own at both SAP and Oracle, and found out that the reason for this was that there is a worry that such third party integrations would slow down the entire ERP system. This would come at the cost of tax engine integrations such as Vertex, Sabrix, etc., which are arguably more important.

Yes, that is a problem – the traditional ERPs do not have a solution for this glaring logistics problem faced by many companies. Which is why, at Return Trucks, we decided to do something about it.

We came out with a solution called RT Assist.

RT Assist is a product that automates the sourcing of trucks for the companies with their existing transporters.We developed a web application and an app that supports handheld devices for the entire ecosystem, whether it is the company Logistics team at plant, Transporter, lorry owners and other recipients.

We built an admin portal for logistics manager that includes the following functionalities…

#1: Uploading of the daily inventory intent to the admin portal using the Excel format (Export from Oracle/ERP)

#2: A provision to create a new transporter and truck inventories along with documents like insurance and registration.

#3: Configured GPS devices for Live Tracking, actual traveled path and various reports like distance traveled and Geo-fence for each vehicle.

#4: Proof of Delivery (POD) with multi-level authentication for each dropping point.

This allows the admin or the plant logistics manager to have a very good idea, in real time, of which transporter is willing to offer their services for load. The manager can then use this information to award the work to any specific transporter.

There are alerts in place for any delay in the process, which are escalated to the concerned party using SMS and App notifications.

We also built a mobile app for the transporter. What does the Transporter Mobile App do and how does it benefit the transporter?

The transporter can get real-time information on the available inventory at various companies from the Mobile App. They are given an option to show their interest to serve for any load and assign a truck once a load is awarded to them, can upload all the truck documents and confirm the truck availability.  They are sent SMS, Email and App notifications and alerts so that there is no confusion of any kind with respect to their time sensitive activities.

Okay, so how does this work? Here’s the Process Flow…

RT Assist Link

The company Admin uploads the inventory. A new indent is notified to all the Transporters through Mobile App Notifications/Email/SMS. The Transporter can see the loads and can select a Load of his choice.

The Company Admin can see which transporters are interested in their load in real time on the admin portal. They can then award a load to any Transporter.

The Transporter gets notified, following which they assign a Truck to their awarded load. They can then upload all the truck documents such as the insurance and registration papers through the mobile app.

If the Truck is equipped with GPS/Mobile App, the location of the Truck is shared with Company Admin. The Truck arrives for Loading and Truck information has already been shared beforehand at the Gate.

Once the goods delivered to the party, there is an option to take POD (proof of delivery) with the actual location stamped on the image. The Company is informed when the shipment has been delivered with the POD.

The whole process is seamless and fully automated and can be easily integrated to Oracle/SAP ERP. There’s no manual data entry needed at any stage during the process.

Final Thoughts

RT Assist will do the following…

• It will substantially minimize the manual intervention
• It allows the company to have a visibility on the transactions
• It enables transparency of cost
• It helps to upgrade the performance measurement while bringing a logical conclusion for each movement needed for POD updates in the system.

That’s why, as you can see, I’m very excited about RT Assist and its immense potential. It could very much plug many of the loopholes in the transportation sector, solve inefficiencies, and help achieve cost-savings of hundreds of crores in the long run.

I hope you enjoyed reading this. A lot of hard work has gone into the development of RT Assist and I hope I’ve been able to give you a sense of that. I really look forward to your thoughts on this, so please keep the comments coming!