Opinion: No Time for Downtime
By Ken Weinberg
Carrier Logistics Inc.
This Opinion piece appears in the July 1 print edition of Transport Topics. Click here to subscribe today.
We’ve all suffered through computer downtime, usually at the worst possible moment. That was certainly the case with a number of freight carriers that experienced it during the hurricane that intensified to become Superstorm Sandy. Others were affected as a result of the 9/11 terrorist attacks. For many, the culprit has been a less traumatic but still disruptive event, such as an unexpected disk failure or file system corruption.
Some may not fully appreciate the high costs they pay for downtime. To understand the effects of system outages, do a complete inventory of all the cost areas that outages affect in your company and then, even more important, do the math. The calculations are so simple, they are almost intuitive.
First, estimate the revenue dollars that come in each hour and multiply by the hours of the outage. Then, enumerate all the employees the outage affected. Multiply their hourly pay and benefits cost by the hours of outage. The resulting number will be formidable.
Similar calculations will reveal the cost of lost productivity by the information technology (IT) staff who must fix the problem, lost customer service and credibility, overtime payments, wasted goods and financial penalties or fines. The result will be the realization that you undoubtedly lost thousands, perhaps tens or even hundreds of thousands of dollars and an untold cost in your service reputation.
Computers, which once were back-office tools for accounting, billing and pricing, now are used for customer-facing tasks, including rating, tracing and customer notifications of shipment arrivals.
And the trucking business has changed in basic ways — it is now 24/7, and customers demand instantaneous service on rate quotes and locating shipments. To keep things on schedule, companies need to operate and make decisions in real time.
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