By Jim Nortz | Senior Manager, Transportation
One of the most rewarding things about working with a wide variety of clients is the unique vantage point we gain into the many ways companies build and deploy transportation teams. Across our many engagements and experiences, we’ve seen several key steps hold constant as foundations for building successful teams that can sustain a high level of logistics competency.
STEP ONE: Set the Strategy
Successful companies consistently launch their transportation teams by first creating a detailed framework and strategy around what exactly encompasses transportation for their organization. This process includes significant self-analysis, including answering questions like:
- Do we want to manage our own freight?
- Are we ready to continually invest in resources and systems to create a team that will manage a critical part of our business?
- Do we have the IT resources to support a transportation team?
- How do our transportation team goals tie into our long-term strategic plans and budgeting (since building a high- quality transportation team is not cheap)?
To be successful, your company’s strategy will need to consider several areas—including functional areas outside your new team’s operational purview:
- your team’s span of control, reporting structure and necessary systems knowledge
- how the team will manage carriers
- who should be responsible for generating/handling transportation reporting/metrics—your operations team or a specialized group such as an internal or external reporting and analytics team—and manage and supply your reports
- how you will identify roles, responsibilities and skill sets for each level in your group, based on size and scope of your operations—a key point to work all the way through to an action plan
A word of caution: In the world of tight budgets, we’ve seen transportation teams tasked with misaligned duties and responsibilities, who are also not fully equipped to accomplish additional duties assigned. Cutting corners on your transportation team depth and skillsets will lead to poor results and turnover, all of which you clearly want to avoid.
STEP TWO: Determine Your Transportation Structure & Team Roles
Your company’s size, complexity and business requirements will all contribute to the shape, size, structure, and roles of your new transportation team. Many organizations make a focused effort to address key transportation roles by building out sub teams that meet their business needs.
The following key roles are just a few that successful transportation teams have in place and can be modified to fit your needs:
Direct Transportation Leadership and Operations
- Executive Leader
- Director of Transportation
- Sr. Manager Transportation
- Manager(s) – Operations
Indirect Transportation Operations Support Roles
- Manager(s), Carriers
- Manager Transportation Systems – TMS
- Manager Transportation Reporting and Analytics
- Reporting Analysis – BI Tool and Database Expert
- Network Analysis – Network Optimization and Analysis Expert
Peripheral Support Team Roles
- Freight Audit and Payment
- Information Technology Leadership
- Customer Service Leader
- Sales Leader
- Finance Leader
Your company will also want to consider who within your transportation and support teams is covering the key functional areas, which will all need to be accounted for.
STEP 3: Source the Correct Transportation Team Leadership & Staff
Once you have your transportation group strategy and design, you’ll need to source the correct staff. Best practices in this area are no secret and many have written volumes on the topic; but in the end we believe the basic principles of hiring quality and experience still hold true and are key to creating a successful, sustainable core transportation team.
Let me mention an important team-building roadblock right here: There is NO easy way to source good people. This step takes a lot of hard work and focused effort, and you’ll confront sourcing challenges like:
- Few Candidates with Advanced Levels of Data & System Literacy Plus Operational Knowledge: We continue to see transportation networks evolve into more data- and system-intensive environments that require technically advanced capabilities along with core fundamental operational knowledge.
- Limited Talent Supply: Supply chain talent continues to be in short supply, no surprises here, and attracting and retaining potential employees with today’s budget limitations continues to be a significant issue for any organization and any department. There are few individuals with a mix of both core operations and technical skill sets, but that level of talent is becoming increasingly harder to find, and when you find it, it’s expensive.
To offset talent and budget issues, we suggest you design your transportation team with realistic bandwidth to train and develop less-experienced staff for the next level; this is critical to your transportation team’s long-term success.
To address this second problem above, we believe you will need to work closely with your HR and executive team, developing a budget to attract the top talent at the leadership levels for your team. If you do not, you run the risk of talent defection. As an example, a larger organization put together a new transportation team without fully comprehending the value of highly skilled technical staff to run their transportation team and systems. As the organization began to limit resources and structure, their talent left the organization.
The point is this: Not only does top talent command a high level of compensation, but these personnel also value an organization’s commitment to supporting the development of team structure and capabilities. Without the commitment to putting the right team in place with the right tools, your new team will not succeed and even more likely, you’ll create a revolving door that ushers out your new transportation staff.
With the complexity within transportation now, organizations need to be reasonable about what to expect the team members in the transportation group to be accountable for. Organizations can run the risk of scaring off top talent when the job description combines multiple roles and responsibilities to a level of demand that leaves little or no chance for success. Top talent loves a challenge, but these people are also seasoned and networked enough to know a no-win situation when they read it.
Determining What You Need in Transportation Team Leadership
As you invest in developing your transportation professionals, you will want to make sure that you can keep your new high-level talent by not only creating a strong compensation program, but also having focused duties that will help attract and keep your top talent as it helps to define expectations.
As for those expectations, as we stated before, the all-encompassing transportation leaders are an extremely rare commodity and most of them are employed and well compensated. So we caution to be reasonable in setting your transportation group’s responsibilities and duties. As one top logistics executive described his challenges working with his hiring team to define job descriptions, “…there was only one Jesus, and he is not showing up to run our transportation team…” There is a level of truth in that comical statement. In today’s financial climate building a large staff is very difficult and organizations tend to want to combine duties to save on headcount costs.
We recommend you focus on traits and actual accomplishments in a candidate’s career, along with their demonstrated skillsets, leadership style and appropriate traits for the role, including:
- how they engage with a team, which will be paramount to the group’s success
- their level of passion, fairness, inclusiveness, honestly, analytical, openness, decisiveness, and discipline
Some of the best leaders we have seen are passionate, extremely disciplined, inclusive, and engaging, which all leads to a high level of accountability and performance.
At its core, transportation operations is the discipline of execution. Part of that discipline must be focused on the willingness to look at challenges in multiple ways to determine a viable solution, select a solution, and execute those decisions. These key traits will transcend to other levels within the transportation team structure. We suggest you look for leaders who are fairly technically capable and balance that with some real-world experience to have the group manage not only the systems, but also the physical shipping of the product.
STEP 4: Retain Your Talent to Sustain Long-Term Transportation Team Performance
Once you have selected and hired your transportation team, the real challenge begins. Employee retention—especially top talent retention—is difficult, due to the many factors involved in the relationship between employee and employer. Two realities of today’s employee pool: Talent moves between companies at a much more accelerated rate and has shorter tenures than even a decade ago, based on trigger events that start them looking for the next career challenge and financial growth.
How can you position your organization to maintain a high level of performance with inevitable turnover? Continuous learning and development programs offer teams a career track with realistic growth expectations and seem to help companies retain the best talent. Successful tools include:
- Career path programs within the supply chain
- Clear objectives and duties
- Success definition
- Shadow leaders in level up meetings
- Resources and training
- Performance-based meaningful increases
- Bandwidth to innovate
- Rotational programs within the transportation team
- Strong work-life balance
- Remote work capabilities for top performers
Yet another facet of employee retention is employee psyche. Top organizations work very hard to make sure their employees feel that they are adding value. Granted not all roles have the same level of value, but employees need to know what they are doing matters.
The last point to be made is one that can be considered obvious when dealing with direct reports, but too often is not followed. Top talent will invest heavily in the role and strive to perform. The quickest way to derail that momentum is for an organization or leader to not live up to their commitments. That level of trust must be maintained, nurtured and respected at all times. Once you lose the trust of your teammates you will lose your top talent. As we recommended earlier, clearly defined goals and expectations for each employee within the team and honest communication with the team—even the sometimes tough conversations—is extremely necessary. Top leaders must show follow through and commitment, which will set the tone for the team.
As you can see, a realistic, detailed plan for the design and responsibilities of your transportation team can create a sustainable group for your organization. And while putting the team together requires a significant amount of planning and work, the results are well worth the effort.
James Nortz is a senior manager in Chainalytics Transportation competency, working primarily with clients on assessments that cover the areas of operations, TMS, provider and mode selection. He also works on select projects where his TMS and 3PL experience provide valuable support for clients on system utilization and organizational design.