Choosing Our Terrain

Continuous Improvement for an Innovative Service Industry

By Ashley Brown, senior continuous improvement manager

(Sept. 3, 2018) Imagine living in an area known for harsh, unforgiving winters. The severity of those winters fluctuates, as does your level of preparation. Mild winters have been trending in recent years, and the current year is shaping up to deliver the mildest yet. Your preparation reflects that, despite the fact the population knows there’s a risk conditions could change, and the area is not equipped to survive a harsh winter, should one come.

Nevertheless, since recent years have been manageable, leaders prepare only for a mild season.

Now, imagine the example above actually describes a service industry, like trucking and logistics. Over time, we grow accustomed to certain business conditions, and through the years, our normal operational processes gain complexity as we add customers, technologies, and even acquire new companies. While the resulting complexity is never intentional, the removal of the new institutional complications will be, and more often than not, tearing out those complexities will be difficult.

Much like in our personal lives away from work, we – the business world – often do not want to change unless we absolutely have to. Just like people, organizations become creatures of habit, traveling down well-beaten, comfortable paths that are relatively easy to navigate – in other words, slipping into the norm of making mild preparations for a mild winter.

This scenario – or, the avoidance of this scenario – is the driving force behind continuous improvement. And continuous improvement not only in traditional spaces, but in our case, trucking and logistics.

Because like the example above, choosing the easy, well-known way instead of preparing for changing conditions could mean riding out a long, cold winter.

Continuous Improvement in logistics

When continuous improvement is mentioned, many minds go automatically to thoughts of manufacturing. Although change and shifting initiatives are frequent in the world of manufacturing – and not always highly regarded – the historical culture of manufacturing is rooted in continuous improvement methods to support and drive change and efficiency.

But given that Covenant Transport Services is clearly not a manufacturing company, how do process engineering, lean deployment, continuous improvement, and change management apply here?

With a family of companies specialized in various aspects of the transportation and logistics space – from truckload transportation, all the way to factoring and asset leasing and ownership for independent contractors and small business – our company today touches deep into the supply chain. The acquisition of Greeneville, Tenn.-based Landair Holdings in July 2018 added, for us, even another new dimension – warehousing and transportation management. With this breadth of service offerings – as opposed to manufacturing – how do we, then, apply the principles of continuous improvement?

The answer is found in the fast-paced growth of the overall service industry – and with that growth, organic complexity within operations. For Covenant Transport Services specifically, a few unique features make us a good candidate for process optimization and continuous improvement initiatives.

The challenges

First, there is natural inseparability in our “products,” meaning our services are produced and consumed simultaneously. Therefore, getting it “right the first time” is fundamental to success. Moreover, once we have produced a service, that service must be consumed by a customer, requiring our processes to have dynamic, perishable and exceedingly time-sensitive outputs.

Without diligent improvement efforts on our part, there is potential for an overabundance of idle capacity and opportunity costs. 

Secondly, the vast number of employees within a single, service-oriented organization creates inherent quality variation – in other words, the potential for quality of service to fluctuate depending on who arranges it, when they arrange it, where they arrange it and how the service is ultimately provided. When scaling up, it becomes increasingly challenging to deliver consistent, superior service across all levels of the business.

As a result, in today’s fast-evolving trucking and logistics landscape, we must proactively prepare ourselves for rougher “winters” or terrains – Covenant Transport Services is involved in many levels of the supply chain, after all – and we must proactively equip our people to avoid both discrepancies in quality and excess, costly capacity. As we seek to remain leaders in our space, our integral business units require streamlined processes, variation reduction, change awareness, and employees nurtured in continuous improvement.

This mode of thinking among business units runs contrary to the status quo, where desire for change is typically manifested slowly and only in response to market pressure, stakeholders or some unforeseen shift in overall strategy. In such scenarios, however, our ability to react and meet changing customer demands cannot be executed at a moment’s notice without disrupting operations or potentially damaging customer relationships.

The solution

To best respond to the above challenges, Covenant Transport Services recognizes the transportation and logistics industry must embrace innovation and process improvement, instituted on the belief that the terrain we navigate – especially in our field – isn’t always smooth. In order to choose our terrain, and to be able to effectively grow our business no matter the condition, we cannot sit by and hope our winters will be mild. Instead, in order to navigate even tough terrain, we have begun executing the following: documented processes; automation; reduction of failure demands; service blueprinting; and a workforce trained and eager to ask “why,” willing to challenge the status quo.

By documenting processes, and collectively identifying constraints and variations, we can create standardization in cost-effective ways. At the same time, this process creates a path for consistency and less digression from prescribed process steps, while simultaneously delivering reliable, high-quality service. Automation deployments also support variation reduction and process stabilization, due to the labor-intensive nature of our industry.

Additionally, deploying automation frees up productivity and allows for greater workforce flexibility for other priorities. Our organization and industry experience a phenomenon called failure demand, meaning demand caused by failure to do something correctly for a customer.

Analyzing our failure demands in structured, innovative ways reduces the non-value-added waste of those demands, while reducing costs and unburdening labor capacity. Getting it right the first time increases customer satisfaction while creating more value per transaction. And through service blueprinting, our customer’s role is better illustrated, our failure points are clearly identified and we successfully create a customer-focused hub that develops metrics to trace service performance that business units act on.  

Perfection is not attainable, but excellence is. At Covenant Transport Services, we believe in applying the flexibility of continuous improvement tools to grow, adapt, make data-based decisions and maximize performance improvement. Like other service industries, trucking and logistics companies across the map are today adopting the operational excellence methods used so successfully for decades in manufacturing, and we are reaping the benefits.

Change – when implemented correctly, supported by leadership, and adopted by the workforce – suddenly becomes quite manageable. And as a result, even the harshest winter can be conquered.

The proof is in people: through the utilization of the above principles and ideas, employees at Covenant Transport Services today are more engaged and more involved in bigger-picture issues than ever before. Strategy and organizational goals are not just terms our people hear in executive reviews – they are driving forces for employees to actively participate in organizational goals and to spot problems that link directly to our strategic initiatives.

Through sound leadership and a vision for a cycle of improvement, Covenant Transport Services is unlocking the power of thousands, while also inspiring innovation at every level in our organization. As a result, we are prepared to navigate whatever terrain we encounter on our road to excellence – are you?

Commentary by:

Ashley Brown is a senior continuous improvement manager at Chattanooga, Tenn.-based Covenant Transport Services. Covenant Transport Services employs more than 4,000 professional drivers across four companies, including: Covenant Transport of Chattanooga, Tenn.; Landair Transport, of Greeneville, Tenn.; Southern Refrigerated Transport of Texarkana, Ark.; and Star Transportation of La Vergne, Tenn. Brown holds a master's degree from Kennesaw State University and is a member of Beta Gamma Sigma business honor society.

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