Why computers don’t cure sloppy business practices

In Tech in Transport, May 20246 MinutesBy Trevor AmmundsenJune 25, 2024

It is people who create sloppy business practices, so it is up to people to cure them.

My family involvement with the trucking industry goes back to 1870 – and so I do not intend to disrespect that history – but it first started to become more established and grow after World War II. The highway system was expanded, and it became relatively straightforward to acquire a truck, so a number of men who had an enthusiasm for things mechanical and moving set up local businesses. The next generation grew up mucking around with Dad’s truck waiting until they were allowed to drive. And so the industry evolved.

I may be simplifying things, but the road transport industry is largely run by practical people who know a lot about the hands- on elements of their businesses and have a lot of relationships they can use. Still, in many cases, they fight the constriction they feel from strongly managed business processes. For example; a rural carrier north of the Harbour Bridge generally was slow at charging clients as the oldest generation insisted that the only way it would survive was if he priced every job personally.

On one occasion, the company had an order for a full load to go up north, which was completed. The old fella’s daughter spotted the consignment when the driver dropped it off at the office. She realised that it would be at their normal rate, so she priced the job herself and sent off an invoice.

A couple of days later, the customer rang to say how embarrassing this was. He had only given them the job because he usually got at least six months to pay, and yet this time, he had been invoiced straight away. Money was tight but he would see what he could do; but could they at least warn him if they intended to invoice on time in future?

Most transport companies have moved on from this sort of process, with the third and fourth generations moving into the industry with a broader base of training and experiences. This has led to most companies doing the basics of charging clients, paying costs of various sorts and possibly receiving some level of monthly reporting. Where there is scope for improvement of processes is in obtaining and using detailed, yet practical, information that can assist a company to refine and increase the productivity of its fleet and the company as a whole.

When reading the business section of your local paper, you will read how our nation’s productivity has decreased, and we need to do something about this. We cannot all fix the country, but we can improve our company’s productivity, and the first step is to understand what economists call productivity.

The definition is basically revenue divided by staff numbers – the more you earn with less staff, the more productive you are. Now, who said economics was hard? Overpaid, maybe, but not hard.

Productivity comes into play in many areas of a transport company – obviously, in driving freight on a trip but also in loading freight, operating a warehouse, administering operations and so on. There is obviously a lot of data needed to start providing meaningful pictures of productivity, such as the number of kilometres travelled, the time it took, the number of tonnes carried, the number of storemen at the depots and so on.

To perfect business processes, we need to close the circle, starting with the loading of freight on a truck and finishing with paying a dividend to shareholders. We need to put in place the analytics, at fleet and company levels, that provide the information that enables productivity to be lifted at the most minute level of operation.

This information can help you increase revenue in a controlled manner and indicate where you might be carrying a bit of ‘fat’. The processes that will provide you with this information must be focused on providing understanding to the multiple generations involved with your company; if both your grandfather and your son can understand the picture presented, then you are making real progress.

Computers don’t cure sloppy business processes but they will certainly help you to not only cure these yourself but also to develop processes that will move your company forwards over the next period, increasing productivity for all stakeholders.