Different IT Solutions Adopted by Linfox - Case Study Example

Name Tutor Course Date Background Information Breznik believes that is it not easy to judge the performance contribution of IT on a business and its competitiveness (1). He points out, however, that many scholars have focused on showing the effect of IT on business performance, emphasising its potential in helping the business create a competitive advantage that it will be able to sustain. The author believes that investment in information technology can greatly help firms become competitive in the industry just like any other resources can do (1). Other researchers argue that IT can significantly contribute to a firm’s competitive advantage and its effect might be directly felt by the firm, or it might be indirect. As will be revealed in this paper, IT provides firms with additional performance capabilities and enables them improve efficiency in the manner of doing business. The paper will investigate the different IT solutions adopted by Linfox and how these technologies have contributed to the firm’s success in the logistics industry. Linfox Linfox is a company headquartered in Australia that offers logistics and supply chain solutions to numerous customers and businesses. The company began operations in 1956, with just one truck but has grown to become one of the largest logistics companies in Australia. Presently, the firm operates over 3.8 million m2 of warehousing with a fleet of about 5000 vehicles in 10 countries. The firm is committed to sustainable growth within the Asia Pacific region with keen interest in Asian markets. It also targets the growing resources industry, with its business divided into four main sectors: Australian Linehaul operations, Retail, Fast Moving Consumer Goods and Resources & Industrial. Linfox has grown to become one of the most successful transport and logistics companies in Australia that has spread operations to many other parts of the world. The firm has implemented several sophisticated information technologies and systems that have enabled it streamline connectivity across its operations to achieve unique supply chain solutions. The firm has been able to implement technologies that have improved the manner in which it conducts its business processes and runs and monitors its supply chains. The firm has implemented systems that have provided efficiency in their customer solutions and helped it realise cost effectiveness (Linfox (a) p. 2). Information technologies: ‘One Click’ CRM After a major acquisition in 2003, Linfox found itself with about two times its customer base. At the time, the firm realised that it had critical customer information, including contacts and opportunities that it could use to develop business, scattered over several internal systems. It realised the need for aggregation of its intelligence in an effort to enhance its management of customer relations. The company therefore, adopted the Microsoft Business Solutions CRM to achieve a single customer contact system that made it easy for managers to remain in touch with a great number of the firm’s customers in Australia and Asia-Pacific. This technology made customer contact and interaction quicker, accurate and easier than had ever been realised before. With this system, Linfox achieved improvements in the visibility across the company in terms of customer information, and also importantly, the business development activities throughout the firm. The managers enjoyed a single source of critical information that enabled them nurture customer relationships and coordinate their approach. The technology also meant that there was easy assessment of business performance in terms of costs and successes of the development of the business. Easy and faster customization and accurate current data are among other benefits of this system that propelled Linfox to great levels by giving it a high competitive edge in the management of its customers. SAP Warehouse Management System The firm has based its operating system and the tools for planning on a leading technology. It uses the SAP to manage its warehouses. As a SAP logistics Partner, the firm uses the leading system in the world to ensure operations efficiency as well as real-time solutions. This technology provides key warehouse, payroll, OH&S, financial, fleet, transport and freight management among other functions (Linfox (a) p. 3). The Extended Warehouse Management technology, introduced multiple functionalities to the management system enabling Linfox to enhance and deliver new efficiencies. Slotting capabilities, introduced by the new management system, facilitates intelligent product location within the warehouse in a manner that has optimised product flows. It has increased picking productivity and enhanced the efficiency of replenishments within the warehouses. It has also helped the DC to balance its activities over several pickup zones, greatly reducing truck congestion. Slotting has also helped the firm realise accuracy improvements and enhancements in ergonomics by facilitating the placement of heavy goods and those that are oversized at optimum pick zones (Linfox (b) p. 12). With these capabilities, the firm has managed to enhance customer satisfaction by providing timely deliveries and pickups. The system has also realised great amount of coordination through task interleaving. This application has been used to plan routes of the resources used in the warehouse and optimised their use. Usually, these routes combine product put away with pick using routes that help minimize non-productivity of activities between different tasks. TM8 Through TM8, the firm has achieved order management as well as goods tracking capabilities that have, to a great extent, reduced costs and increased utilization of assets and improved timely shipment deliveries. This technology has also facilitated cargo billing and payment capabilities that cover the overall spectrum of the operations of the transport system. Data-crunching As Crozier points out, Linfox embarked on a huge project that was aimed at ensuring that its control centres were able to forecast dangers and convey this information to drivers so that they could navigate their ways away from such dangers (p. 1). Using the HANA in-memory analytics database engine, the firm is able to navigate over 12 million up to date data records generated and conveyed by telemetry on a subset of its numerous truck fleet (p. 2). This system maps the real time positions of the trucks in a geographical display and is fitted with desktop controllers in several centres in Australia and Thailand which drills into the data to the level at the streets, and works out reasons for any truck delays or why a particular track travelled beyond the set speed limits. The system further queries a great amount of files and historical information in order to determine whether or not the same situation has been witnessed before within the same area, and then maps out the findings. The firm, while implementing this technology, was optimistic about the expected system performance and the level in which it would help prevent occurrence and reoccurrence of avoidable destructive events. It was the aim of the firm to be able to monitor its fleet of trucks and determine why and when each of them was idling. This system helped Linfox have real time information about its trucks and in the event of any idling or over speeding, it could be easy to identify those responsible and ask them to explain (Crozier p. 22). One demonstration of the operation of the technology (see appendix) turned up a number of clusters of trucks that were just idling. An official of the firm identified these clusters, saying that one was actually the Linfox’s workshop while two others were refrigerated components. This demonstration showed a glimpse of how monitoring of trucks would be easily managed and the level of accountability that would result. The firm would therefore, greatly improve it transportation efficiency and serve customers as effectively as possible. OptiFox OptiFox technology is an important IT solution that was designed to change the way in which the firm conducted its distribution forecasting and site planning. It was also designed to improve the firm’s network levels, especially the retail business sections. With this technology, the firm has managed to significantly reduce the initially large variances between its business forecasts and the actual volumes. This has resulted to significant improvements in the efficiency of planning for the firm’s resources as well as utilization of assets in transportation and DC. Currently, operators have greater visibility of operations of the transportation system and are able to effectively synchronise the pickup of volumes and timely staging and dispatch of activities (LinFox (b) p.10). Tablets for fleet rolling Linfox also rolled out a mobile machine-to-machine (M2M) solution to enhance its communication system. The firm’s trucks were designed to accommodate one communications hub that was to replace up to six proprietary communications systems within the cabin. The M2M technology was designed to allow drivers to use a Motorola tablet or smartphone that used Google’s Android OS to access applications. With this technological innovation, Linfox sought to achieve a communication hub that accommodated satellite telephony, industrial Wi-Fi and mobile telephone network, all in one. Other additions to this technology was some intelligence regarding business regulations that determines the vehicle whose information will be conveyed automatically using the M2M technology to the concerned control centres depending on the location and connectivity of the vehicle. Linfox was concerned about its investments in the trucks and trains, noting that those carrying a lot of fuel were very expensive. In order to realise returns on investments, Linfox believed that these trains had to be kept moving as continuously as possible. The firm therefore felt the need to implement technologies that would pull information from the management system and provide indicators about any future technical or operational challenges in a manner that could help it effectively plan maintenance services and any preventive efforts that would minimise or eliminate these challenges. By doing this, Linfox was able to improve asset management out of site (Clarke p. 5). Linfox was focused on the replacement of its telemetry system that used GPS, for management and tracking of its vehicles and supplies with the new system that cost it between $300 and $5000 for each truck, depending on the truck’s location. The firm wanted to come up with applications that were relevant and specific to the needs of its drivers as well as the customers. The tablets enable these capabilities, with even much more options. Despite being used for entertainment and as satellite and mobile phones, the tablets also came with apps for signing documents, like the receipt of delivery. They also have capabilities used for still photos and video recording used to capture such things like damages or breakages of the trucks for compensation and repair purposes. These photos could be attached to GPS coordinates and it is possible to tag with comments (Croizier p. 9). The tablet technology presented great flexibility in monitoring and incident reporting, enhancing Linfox’s position as a leading logistics provider in Australia and beyond. This technology improved driver awareness as well as customer participation. It became even more useful to the control team as they received up to date information regarding the transport network and situational circumstances of the trucks. Other technologies Linfox has a strong IT team that has built and sustained the extensive interaction platform of technologies that have propelled the firm to great success. While tracking of the trucks was the major priority initially, several other technologies have changed the way drivers, customers and management interact with one another in the daily running of the business. IT has transformed the tracking itself and presently, Linfox staff at the control centre not only know the locations of the trucks, but are able to detect if any truck has applied sudden brakes, has swerved harshly or when a truck has rolled over. The team can then contact the particular driver immediately to inquire about any occurrences (p. 2). The temperatures within the trucks are also closely monitored and the information relayed to concerned centres from where actions can be initiated to prevent any damages to goods. If temperatures rise or fall below expected levels, sensors detect these changes and communicate this information before the goods get spoiled. Also, truck drivers are required to take fatigue breaks through the firm’s communication system. They must log in and log out of their vehicles and are able to send email to their families or use skype during such breaks. The signed deliveries are also instantly relayed to the office and the vehicles, trucks, drivers and other containers are all monitored and virtually followed throughout their daily activities (Walters p. 3). Within the warehouses, the firm has installed light guides that direct pickers to goods that should be packed. This has been achieved using an automated system that stores information about the packages and the sequence of packing and transportation. The result is a system that greatly minimizes time wastage and promotes efficiency in packing and transportation. Conclusion As has been seen in the discussion above, Linfox is committed to improvement of performance through adoption and implementations of information technologies that have enabled it achieve its desired level of efficiency. The technologies used by the firm do not only ensure that trucks reach their destinations in time and in safe conditions, they ensure great coordination among the different teams and the management in a manner that has given the firm complete competitive advantage in the local market, enabling it battle for dominance with other international transportation firms. These technologies have improved performance and built confidence in the customers. Customers have been made to feel part of the operations and are furnished with up to date information about their goods. Customers therefore have more confidence in the firm and feel that their needs are attended to in the most modern and technical way. Drivers also enjoy a great variety of applications as well as the current information flow from the control centres which has enabled them navigate safe and short routes to their destinations. Through the tablets, they can send and receive critical information about the goods in their trucks and can feel confident about their work. The management has also realised a significant level of efficiency and accurate reporting about truck positions. The management has managed to monitor and track trucks with more ease and they feel confident about what they do. The result is a system that has been buoyed on an intense network of technologies that have revolutionised operations and helped the firm achieve its dominant competitiveness in the industry. Works Cited Breznik Lidija. Can information technology be a source of competitive advantage? Economic and business review, Vol. 14, No. 3, 251-269, 2012. Croizier Ry. Linfox crunches big data to keep trucks on time, 2013, retrieved on 12th May 2014 from < http://www.itnews.com.au/News/343657,linfox-crunches-big-data-to-keep-trucks- on-time.aspx> LinFox (a). Information Management, 2014, retrieved on 12th May 2014 from < http://www.linfox.com/Services-and-Solutions/Information-Management.aspx> LinFox (b). Innovation, 2014, retrieved on 12th May 2014 from < http://www.linfox.com/About- Linfox/Strategy-and-Initiatives/Innovation.aspx> Clarke Trevor. Tablets to keep Linfox fleet rolling, retrieved on 12th May 2014 from < http://www.smh.com.au/it-pro/business-it/tablets-to-keep-linfox-fleet-rolling-20121105- 28u1o.html> Walters Kath. Linfox’s John Ansley: CIOs aren’t ‘head geeks’ anymore, retrieved on 12th May 2014 from Appendix Data crunching demonstration and idling truck clusters (Source Croizier, pp 20) Read More