The freight invoice – the holy grail of TMS visibility?

Blog Compliance, Peppol December 19, 2019

Visibility is one of the most important logistics control features, but equally important is that the information displayed is based on accurate data. Andreas Grundsell explains why the freight invoice is the most important data source for building up your TMS visibility dashboard.

Are you one of the lucky few?

Imagine opening an app on your smartphone, tablet or laptop and getting you an instant snapshot of the customer deliveries and ETAs in your logistics network. Of course, you also get an overview of potential delays and current bottlenecks, projected costs and services levels.

“You need to pay attention to the basics if you hope to get some real business benefits out of your investment.”

The above text could be an excerpt from any supply chain software sales rep, eagerly telling you a story that makes you think “I wish…” Or, better yet, you may already have such an app, albeit one that struggles with reliability. Perhaps you have an app like this that you think works like a charm and feel that this blog is not worth spending your time on – if you are a reader of the latter group, then you really should continue reading (or you are one of lucky few)!

Visibility for overview and planning

There is no doubt that visibility is perhaps the most important basic logistics control feature in any type of operation. It’s often depicted as a dashboard similar to a car’s dashboard, where you can see the car’s current speed and fuel consumption, along with planning features like a fuel gauge. Warning lights of more sinister nature indicating engine overheating, oil level warnings, etc. are also important aspects of the dashboard but perhaps not as often considered.

To translate this into logistics is very easy. Speed and consumption are KPIs like the ETA of a shipment or current location on the purchased route in your network. The fuel gauge is your consolidation of customer shipments, so you can utilise your purchased capacity optimally. And an engine overheating warning has parallels in tied-up capital trends or even, say, a factory fire at one of your suppliers.

Data quality control

Just like car dashboards have evolved from rudimentary analogue gauges with low predictability to modern, smart, pop-up windscreen dashboards, logistics and B2B, in general, are on the same path, what we refer to as ‘digitalisation’. However, there is one big difference – car developers spent years on standardising and controlling the gauges before introducing ever-smarter ways to present the data. In short: they have quality control of their data.

“Follow the money! Or, better yet, follow the invoice trail and look for a data-driven application.”

The software industry is selling the story of pop-up window dashboards, but the underlying data are at best unreliable or at worst non-existent. So, before setting off to buy that pop-up window dashboard for your procured transportation operation (and I really think you should!), you need to pay attention to the basics if you hope to get some real business benefits out of your investment.

The advantages of the freight invoice

In my view, the most comprehensive source of information for building up your TMS visibility dashboard is the freight invoice. The advantages are many, but not always obvious to the casual observer.

  • Firstly, invoices almost always carry better information quality than any other type of information carrier. That is tremendously important, as it is the data that steers you to wrong conclusions, not necessarily the application.
  • Secondly, there is no more developed area in data quality assurance than invoice auditing. The reason is obvious: money carries trust and money matters. If your supplier fiddles with accurate status data, it’s an annoyance. If the same supplier fiddles with your Accounts Payables, it’s a real problem.
  • Thirdly, an invoice carries so much more information than most people reflect upon; each procured transport service is there, associated with the order number and hence the load and the goods shipped. Furthermore, any deviation or cost associated will be listed and priced. Also, as the charged transport service per order line is listed, you also have data concerning the route and/or lane on which your goods travelled from your warehouse to your customer. In short, almost all information you can possibly think of to fill your dashboard and analytics engine can be found in your invoice – with good data quality (after auditing), standardised and compliant.

The safest data source

Naturally, real-time data for statuses cannot be satisfied via the invoice – other sources of information must be utilised for that. But for analytics, tactical planning, procurement, network configuration, financial controlling, etc., the invoice is your safest bet as a data source. Follow the money! Or, better yet, follow the invoice trail and look for a data-driven application.