In my time at FourKites, I’ve assisted in many yard management system (YMS) implementations and asked customers why they decided to adopt a yard management system. Across the board, the responses are some variation on the theme of cutting costs and operating their yards more efficiently. Fortunately, with Dynamic Yard, they’re able to see real results in both of those areas immediately post-implementation. Previously manual tasks are being automated and measured, leading to increased throughput, cost savings and continual process improvement.
But this post isn’t about Dynamic Yard, specifically. Across the board, the ROI of yard management systems has been proven, with more and more evidence pointing to the need for a YMS for companies of all sizes. And yet, only 21% of companies have adopted a YMS. In this post, we’ll cover the benefits of adopting a yard management system; the opportunities for return on the investment in a YMS; and the ways in which real-time data can help you pursue continual improvement.
“The advent of cloud technology has also made an impact on YMSs, offering faster deployments (especially when starting as a stand-alone solution) and lowering costs, thus making the ROI more attractive. In many cases, companies can start using these YMSs as nonintegrated solutions to automate mostly manual processes, and to very quickly increase visibility to yard operations and their equipment.”
What are the benefits of YMS adoption?
For the last couple months, we have been taking a close look at the far-reaching benefits of adopting a yard management system, and the challenges that such a platform addresses, including inventory management, operational costs, expensive overtime labor and eliminating arduous manual processes. We’ve also taken a close look at the benefits of a YMS from the perspective of gate attendants, administrative staff, yard jockeys, dock workers and others.
Several other benefits of a YMS include:
Enhanced carrier relationships
By providing carriers a platform to manage appointments and receive notifications for changed schedules, you’re empowering the carrier with autonomy and removing pesky phone calls or emails from the equation. Making a name for yourself as a shipper of choice improves the likelihood that the best carriers will want to work with you. Considering today’s extreme capacity crunch, this is a critical benefit that can give you a true competitive advantage.
Improved employee morale
Morale among workers improves when they are given the tools they need to do their jobs more easily and effectively, cutting down on their need to stay at the office longer, and shifting their time to higher-value tasks. One of the biggest benefits of a yard management solution is its ability to drastically reduce the heavily manual tasks that plague facilities, which in turn improves employee morale and job satisfaction.
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What are the sources of ROI for a yard management system?
When considering whether a yard management system is the right solution to address inefficiencies in your facilities, one of your first questions should be whether there could be a substantial and speedy return on the investment. The ROI for a yard management system can come from a number of sources:
Increased trailer utilization
Increased visibility into trailer inventory enables improved usage, as well as reduction in unnecessary trailers. This is especially valuable for dedicated fleets (trailers owned or leased by an organization). Improving utilization allows the fleet to reduce trailers and save trailer expense, like gas and maintenance.
Improved dock utilization
By improving trailer visibility, dock teams don’t have to wait around for trailers to be located. This means that the loading and unloading process is much faster, decreasing cycle time as well as the time trailers spend unused.
Decreased dock labor expense
Without trailer visibility, dock teams spend a lot of time waiting for the location of trailers to be determined manually. As a result of improved dock utilization, dock teams can use their time more effectively, thereby eliminating overtime and reducing warehouse labor.
Decreased spotter labor expense
Because a YMS tracks spotter and trailer locations on the yard, it feeds spotters only those tasks that are most constructive and efficient to complete. This allows yard managers to fine tune yard labor expenses to precisely what is needed, down to the time of day.
Inventory control improvements
By knowing what is in each trailer and how long trailers have been on the property, product inventory can be better managed. Misplaced product in a trailer can cost corporations more than $30,000, even north of $100,000, depending on the value of the inventory within the trailer. Additionally, knowledge of what a trailer contains makes it easier to quickly access those specific goods in case of a spike in demand (toilet paper, anyone?).
Carrier behavior metrics
Detailed carrier metrics can give you a site’s or an organization’s average detention spend, average detention hours per piece of equipment, percentage of on-time, early or late deliveries, and more. This level of intelligence informs carrier selection and enables an organization’s carrier relations team to improve carrier performance, which can lead to reduced freight rates.
By knowing when the driver and/or trailer arrived and departed the property, you can improve control over detention expenses by having accurate metrics to use in your calculations. The improved throughput of inventory in and out of the facility due to streamlined processes also serves to reduce detention spend.
Spoilage or expiration of perishable inventory
For organizations using reefers (refrigerated trailer units), maintaining a consistent temperature within the trailer is of the utmost importance. Items such as vaccines, fruits and meats need to be kept within specific temperature thresholds to be sellable or receivable. Some yard management systems are able to identify when a trailer has ventured from these temperature thresholds and for how long, enabling yard crews to intervene to prevent spoilage. This can save organizations hundreds of thousands of dollars per year in expired goods.
The value of data in the yard
The single most valuable feature of a modern yard management system for most organizations is metrics, or reporting. Being able to identify the areas of your facility or operations that are costliest or slowing down throughput (often one and the same) is key to helping you make comprehensive improvement plans. Beyond the immediate payoff of the ability to pinpoint problem areas, yard and appointment metrics can assist organizations in managing key performance indicators, or KPIs. Many modern organizations implement KPIs to lower costs and improve operations, but gathering enough data to show improvement is difficult without metrics. With a yard management system, you are armed with data to support improvements made in your supply chain in areas such as detention costs, carrier on-time performance and equipment dwell time, to name a few.
We recently surveyed representatives from some of the largest corporations in the world to gauge their yard technology use and needs. From the survey results, it was clear that this is a real area of potential growth for most organizations, with almost half of respondents capturing appointment metrics and only 16% capturing metrics for both yard and appointments.
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Once your organization has determined that it is time to adopt a yard management system, the next step is to choose the platform that can deliver ROI – and quickly. In my experience, across the board, once an organization selects FourKites’ yard management system, Dynamic Yard, they see benefits almost immediately, and the comprehensiveness of our implementation process reduces common onboarding issues that may delay ROI. For this reason, it’s important to consider experience when selecting a yard management solution. The more the implementation team understands the yard and the nuances of implementing an effective YMS, the faster your organization will realize a return on its investment.
If you’re still not certain that a YMS is right for you, be sure to check out Gartner’s new report on yard technologies to further understand their value for your operations.