In an industry that could benefit substantially from streamlined processes, Renatas Slenderis, CEO of Fracht, believes his company’s new alliance offers both collaboration and control for all members. Here, he explains how the ALCS platform works
When managing vehicle sales and logistics in the finished vehicle logistics industry, speed of communication and response is imperative for any successful business. This rule applies for every related party, be it the OEM, the dealer, the compound manager, the car-carrier, the transport manager or the driver. Juggling the multitude of actions that need to be processed, while not complex, is a significant and timely necessity.
Renatas Slenderis (pictured), CEO of finished vehicle services provider Fracht, knows this all too well, having started his career within the family firm coordinating vehicle sales and logistics.
Slenderis recognised the need to streamline the process and create a more efficient response time, while also avoiding duplication of the operations that could be automated, at the right time and in the correct way.
“Whilst studying at university, I also took on a job as general manager for a finished vehicle logistics service provider,” Slenderis explains. “I was responsible for a wide spectrum of business processes: from managing a fleet of 65 trucks and 80 drivers to administration, purchasing, sales, environment and quality control. This was a job I loved, but it certainly was not a 9-5pm role!
“I was juggling my studies and examinations for my mechanical engineering degree, squeezing in some social life, whilst managing phone calls and emails from customers 24/7. It was certainly not uncommon to be working at 3am. I thought: ‘There must be a way to improve this!’”
The challenge: improving communication and response times
In fact, throughout Slenderis’ career, including roles such as TLA manager at Gefco, it had became apparent that timely communication, accurate information and responses are a common issue. So much time is being wasted, day in, day out, on routine business processes.
Many companies have their own IT solution, but this is usually only for internal communication between departments or the OEM and suppliers. It does not allow for sub-contractors and partners, which makes it impossible to have the full picture in real time.
Those other sub-contractors and partners operate their own separate systems, so messages are manually relayed. Even with the introduction of telematics solutions, it is clear that there is no standardisation in finished vehicle logistics at all. Today, many OEMs and suppliers don’t have access to the functionality required or have a platform where it is possible to exchange information with all parties in their finished vehicle supply chain.
Current communications are still managed with specific parties via emails, Excel and SFTP. It’s hard to imagine a less efficient system. Any platform developed and managed by an OEM or an LSP would in some way be proprietary to them, so an independent universal platform is the real answer.
The solution: establishing an alliance for collaboration
In 2003, Slenderis started looking for a way to solve these issues and in 2009, Fracht began working on a solution. The first version of ALCS emerged in 2012 and two years later over 265 companies were using it on a regular basis. Today, the platform connects 481 transport companies which use it regularly, although the total network includes 1,481 companies and more than 7,000 vehicle transporters.
The Fracht Alliance was established for parties wanting to access the transport data exchange and management platform, ALCS (Automotive Logistics Control System). The ALCS platform connects the demand with the resources in real time; just as Uber’s app connects small taxi operators with fee-paying clients who need a taxi. Like Uber, Fracht has made it easier to do business through its platform.
Fracht knows privacy is paramount to LSPs and OEMs and it can offer complete separation of loads that are being moved internally within the LSP from work that is exposed to the Alliance for fulfilment. In this way, any member can benefit from the speed, visibility and automation of previously manual tasks, without exposing information to peers, such as the nature of loads (though still benefitting from backloads that reduce operational costs by cutting waste).
There are three categories of members in the Fracht Alliance:
• OEMs that have vehicles to move
• Major LSPs that juggle large contractual commitments and have deadlines to meet
• A large and growing network of tier two LSPs who are agile and hungry for work.
However, the Alliance is about much more than hailing a transporter. There has been significant investment in automating the pairing of flows for members, leading to an average 10% increase in truck utilisation, therefore cutting waste and cost across the Alliance.
The ALCS platform not only offers critical functionality for communication between OEMs and suppliers, but major benefits for the OEMs and their logistics service providers (see box above for full details):
• For OEMs: send advanced transport notice; transport order; damage report; transport forecast (annual, monthly, weekly); blocking or unblocking vehicles; special forecast notification (end of year, production stops); delivery restrictions; spec of vehicle.
The ALCS app allows dispatchers to sell loads (or buy trucks), confirm offers and inform compounds about scheduled trucks
• For LSPs: send information about planning; truck plates; loading confirmation and exit confirmation; forecast response; planned load configuration; geo-positioning transport asset; transparency over the complete supply chain, especially from FBU to dealer delivery, with data available for everybody involved in the process – but secured against unauthorised access.
Fast and appropriate data exchange
The platform can adopt the individual OEM standards or quality requirements, such as truck checks, to ensure that every LSP is made aware of all the standards pertaining to the load that they are about to transport.
The platform enables a faster and more efficient reaction time, the avoidance of data management errors, and the ability to operate from anywhere in the world. The reaction time within the data exchange has been increased up to 20 times, enabling managers to make timely decisions and the system to execute the operation efficiently.
The user can monitor any data managed by the system – KPIs, schedule amends, supplier capacity, delays – and the system automatically informs all related parties responsible for operations. Where permitted, the platform will share data with customers, partners, drivers or other personnel in a simple and usable way, and at the same time maintain business continuity.
Slenderis concludes: “So far, the platform has acted in a similar fashion to a freight forwarder – without the fax, email and phone calls. Many OEMs and top LSPs already have vehicles being processed on the platform. But we want to go further. We want to cut more costs by offering the platform directly to these groups to use and gain benefits from.”