MAY/JUNE 2019
Technology Advancements Aid Customer-Supplier Relationships
Technology advancements continue to enhance the relationships between intermodal customers and suppliers in a rapidly changing business environment.
To identify and explain how those technology-fueled relationships can work to the mutual benefits of all parties, Intermodal Insights asked for and received a wide range of responses. The comments are the latest installment in Insights’ year-long spotlight on technology innovations relating to intermodal. Future articles will be focused on specific advancements, such as terminal operations and equipment location services.
One common thread that was emphasized is how technology is bringing suppliers and their customers closer together.
"Technology is the ultimate trusted advisor relationship glue between suppliers and their customers," said Karen Sage, chief marketing officer at MercuryGate. "Companies incrementally adopt new technologies from suppliers in order to enter new markets, to enhance revenues in existing ones and to supply better customer services to the final consumer."
Two others underscored the point.
"Thanks to ongoing advancements in technology, customers are more savvy about what’s available and what’s possible in the marketplace," according to Mathew Elenjickal, Four Kites’ CEO. "This puts more pressure on suppliers to meet those demands — whether it's for differentiated products, faster service or lower costs, often it’s all three. Technology makes the market more competitive, but also gives suppliers an opportunity to build closer relationships."
"As customers turn to technology to solve issues, we always see the limits being challenged and horizons constantly expanded," said Adam Knipfel, vice president, sales and marketing, North America for Yardeye. "As technology is implemented to solve one set of problems, additional opportunities are almost always identified. This creates what I like to call ‘wouldn’t it be amazing if we could…’ scenarios."
Collaborating Like Never Before
Ingrid Crafford, Norfolk Southern’s director of operations systems, offered a similar view, saying, "Technology is vital for us. Suppliers and customers are collaborating like never before through ongoing advancements in technology. They can visualize and prototype ideas and concepts quickly and economically, preventing design oversights and unintended consequences."
Mark McKendry, NFI’s vice president of North American intermodal, pinpointed technology’s value.
"Technology is the catalyst for scale and efficiency within a supply chain, or a carrier’s operation. How that connects to the relationship between suppliers and their customers varies. What becomes obvious to all early on is that technology forms an agreed upon statement of facts in a language both parties can speak," he said.
Cliff Creech, business development manager – intermodal, Phillips Connect Technologies, stressed the benefits of change. "Technology has revolutionized supplier relationships with customers. I’m old enough to remember the world before email. Today, technology has automated many such customer interactions, increasing accuracy, reducing costs and accelerating responses."
That revolution has benefited both parties through development of solutions such as telematics, he added.
Allen Thomas, chief strategy officer for Advent Intermodal Solutions, highlighted how technology has accelerated the bond that brings suppliers and customers together. "Many technology solutions are intricately linked to mission critical, production environments which mandate more of a partnership," he told Intermodal Insights.
While those relationships are becoming closer, multiple approaches are needed as that process moves forward. "Frequent, scheduled meetings, well attended by suppliers, and communications are critical to making these partnerships effective and continually evolving," Thomas believes.
"Customers can leverage the expertise of their suppliers most effectively by clearly communicating their business needs and then working collaboratively with their suppliers to find practical solutions that address those needs," said Creech.
There’s more to the relationship than communications and meetings, others said.
Needs Aligned
"I like to understand what the supplier has done businesswise, and where they are trying to go so our needs are aligned," said Crafford. "It is important for the supplier to have a solid understanding of the customer’s interests and expectations. I’d like suppliers to be candid if they don’t have experience. The last thing either of us needs is to enter into a relationship that is not exactly what we understood it to be at the beginning."
Honesty is the best policy, must be a standard in customer-supplier relationships.
"Being honest with suppliers, even when it is uncomfortable, is a great way to ensure positive results from both sides," Knipfel said. "The best projects are not those where nothing went wrong. They are those where the problems are managed and solved openly and honestly, effectively and consistently."
"When you break it down, the things that make a successful
customer-supplier relationship aren’t all that different from personal relationships," Elenjickal believes. "Customers should communicate their needs clearly, give candid but fair feedback, and be willing to make the investment in building a long-term relationship."
Suppliers and customers face a particular partnership challenge that is technology related, Sage said.
"When it comes to technology that is nascent, customers can and should have great influence on the forward [product] development of the supplier," she explained. "Working effectively means being open to more than viewing the relationship between customer and supplier as a financial one."
Product Development Considerations
Customer-supplier relationships are also shaped by several different factors when product development is concerned.
Creech said that technology suppliers "must anticipate their customers’ needs and focus their R&D resources on the development of products and services that will most effectively address those future customer needs."
Sage said suppliers have to proceed carefully as they evaluate product development, looking for a "sharable roadmap" that embraces a balance between the needs of the supplier and the customer.
"Is the feature or function asked for by the customer something that is going to be applicable to many of your other customers?" she said. "Meaning, is the request something that belongs in the core capability and advancement of the product or is it a request specific to that customer’s needs or internal processes?"
"When I evaluate a software vendor’s solution, I am very focused on the evolution of the product and the life cycle/roadmap," McKendry said. "A supplier has to be very close to the market and stay aware of industry trends, while being strategic enough to anticipate what will ‘stick’ and what won’t. Similarly, carriers have to be aware of what will ‘stick’ and what won’t."
McKendry noted that suppliers’ technology can at times be a bit overwhelming for carriers, as new entrants proliferate in sectors such as freight visibility.
There has to be a balance between a customer’s need for development and innovation of new products and suppliers’ anticipation of how to meet those requirements, Elenjickal said. Digging deep into a problem often can produce an alternate solution that benefits both parties
Give and Take
Knipfel also highlighted how give and take can produce excellent results.
"Collaboration in our industry is increasing and it is often these situations — a supplier identifying a need which a customer did not yet know they had — which create opportunities for positive partnerships," he believes.
Thomas also underscored the importance of relationships.
"Our view is in this hyper-fast state of technology innovation, the supplier has to play more of a trusted advisor role and be responsible for bringing new ideas to the customer that could shape his, and his customer’s, bottom line. Meeting current needs are fine, but determining solutions that can impact strategic direction on a 1–3 year horizon is where real differentiation lies from a supplier perspective."
Crafford stressed the importance of customers having an open mind and the need for suppliers to "stay in tune with their customers."
"Customers appreciate when suppliers drive improvements and offer innovative solutions," she noted. At the same time, the customer must appreciate that "sometimes someone has a better idea," citing the example of a technology hardware product that was recommended by a supplier. That product, which the railroad hadn’t considered, turned out to benefit not only intermodal where Crafford works, but other departments as well.
McKendry provided an example of how business relationships can improve in many cases because manual intervention and other inefficient practices tend to be eliminated.
"If, as a customer, you prescribe a standardized visibility tool [to suppliers] that enables real time information about your supplier’s performance and better defines what is 'good,' you can become dynamic in how you manage your supply chain," he said. "This can lead to reduced cost of inventory on hand, improved cycle times and higher order accuracy."
Aggressive, or Not?
There is another aspect to business relationships between product sellers and buyers. How aggressive should the supplier be in advocating for their products, as opposed to waiting for customers to identify their needs?
The answers from experts varied substantially.
"Successful suppliers will listen to their customers to ensure that they understand their needs, then advocate for their products that meet those needs," Creech said. Sage offered a somewhat different perspective. "While there needs to be a lot of listening and direction from the customer, there also needs to be some significant advocating for products and technologies on the supplier’s own," she said. Sometimes customers are challenged to look beyond where they are today for the changes in the market a supplier can see coming.
Thomas had a more succinct view, saying the supplier should be very aggressive in advocating for their products, though "you must speak the language the customer understands and listen throughout."
Elenjickal favors being a vocal product advocate, while also stressing another quality. "You have to be honest about your features and capabilities," he said. "It never pays off to sell a customer on a product that doesn’t suit their needs and won’t provide real value."
Knipfel said he doesn’t believe being aggressive with customers is ever appropriate, preferring the word "proactive."
"If we are all to sit back and wait for a customer to identify a need, the need may never be identified," he said. "If a supplier can make a customer look good, it is a win all around."
From the customer’s perspective, Crafford said Norfolk Southern isn’t looking for aggressive suppliers, though she clearly welcomed their ideas. "With technology advancing faster than ever before, and companies operating leaner than in the past, customers may not know what they want until they can see it," she said.
Port of Virginia Solution
Joe Harris, a spokesman for the Port of Virginia, outlined how customer-supplier relationships evolved in a specific case – the development of its Truck Reservation System to manage gate flow and enhance cargo visibility.
“As the need for a reservation system became more acute, one of our first moves was to involve members of our local motor carrier community This was the beginning of a collaborative, two-year effort where we listened and used the input of those on the frontlines to develop a system that is beneficial to all of its users,” he said. “Our TRS was designed to complement and enhance the efficiencies produced by the semi-automated container stacks, improving overall results for truckers, beneficial cargo owners and the port.”
The TRS adoption rate is increasing and turn times for motor carriers are decreasing, Harris said, as the system matures and the port works with truckers to make further adjustments.
“Our experience is that collaboration, communication and phased implementation of the TRS, and similar systems, yields the best results for all of the involved parties,” he added.
