By Dayton Jagiela, Cultura Strategic Growth Analyst
I recently got back from a trip involving multiple customers around the country where we discussed the topic of freight and dispatch. Several takeaways arose: Freight and dispatch is unique for different silos within the overall business, it is a time-consuming and laborious process to organize this business function, and the processes have been organically shaped to fit the specific business’s need. Out of necessity, companies have combined many different software programs. My concern is: What happens if the business tries to expand one or all of these functions through horizontal integration?
To illustrate further, take into consideration the following example: A company started out as a couple of grain warehouses. It purchased a half-dozen trucks and employed drivers. These trucks hauled grain from the business to market. A few years later, the company decided to horizontally integrate and purchase a full-service agronomy plant. The plant had a technology system in place to move trucks through the workflow. It didn’t make sense to implement this technology in the grain side of the business because of costs and over-engineering, so the grain side was left alone.
Years later, the logistical demands of the agronomy department grew.
The business needed a system that tracked dispatching more closely, so a program was put into place to track all trucks – in tandem with sprayers and spreaders – optimizing the latter equipment’s efficiency. The business grew so much they started to use the grain trucks outside of harvest season to haul fertilizer. The grain department now is in charge of 15 trucks.
Fast forward five years. The grain market has changed. Customers don’t want to haul their own grain anymore because of increased liability and cost. You now have 15 trucks and 30 third-party logistics (3PL) trucks that need to be organized to meet the growing demand within the grain division. The problem now is that the agronomy freight and dispatch system cannot handle the grain division’s complexity. The agronomy solution does not meet the needs of the grain division, so the business is in a catch-22.
Cultura Technologies runs across scenarios quite often that involve or involved a horizontal integration. Certain departments have grown faster and others have been left untouched, then a market condition changes, causing issues for all of the businesses. We have the ability to create a technology platform for your business that is nimble and agile. The ability to test a solution, and if it is deemed beneficial, carry it from one department to another. The end goal is that your business can have a unified technology platform, so the next horizontal integration can be more seamless and less cost prohibitive.
Stay tuned. Next time, we’ll tell you about our solution and even invite you to get involved in giving us feedback.