There’s no denying it, supply chain optimization is a hot topic right now. But for many businesses, recognizing the signs that optimization is needed, and just as importantly, taking action to address them, is a challenge.
There’s a reason that it’s difficult to find answers around this as well, and that because the fact is that there are generally no easy answers when it comes to optimization. Properly determining how best to optimize supply chain operations requires a deep dive into your organization’s specific situation by having experts analyze all available shipping data to identify the factors that are creating inefficiencies, and establishing solutions for addressing them.
While there are some tried-and-true supply chain optimization techniques, you can rest assured that there is no “one-size-fits-all” approach to successfully improving operations across the board. So how can you recognize that your organization is in need of a deeper analysis of its supply chain? And what can you hope to get out of performing one?
Signs you need to optimize
1. Busy yet unproductive staff
If your staff always appear busy, but the bottom line doesn’t reflect this, there is an issue. Whether it means employees are overworked, or that they are not being efficient, or that they simply lack the tools to do their job well, it’s important you know how your employees are working and to uncover methods for improving their processes.
2. Late or delayed shipments
Ensuring that every shipment is picked up and delivered on time is a challenge, and it’s one that’s often elevated as businesses scale. Processes that previously worked to track and manage a distribution network can quickly become overwhelmed when more trucks are out on the road, and new methods may need to be explored.
3. Inefficient distribution
High fuel consumption, long waiting times at loading docks and unutilized space on trucks are all signs that your distribution network could benefit from optimization. This aspect of inefficiency can be difficult to gauge at the surface level, but chances are that if something feels off in this area, a full analysis will uncover ways that it could be improved.
If you are too close to your operations, it can be a challenge to remain objective enough to know if your supply chain is struggling and identify the causes and solutions to any issues at hand. This is why companies typically partner with third-party experts to help manage the optimization process and provide solutions to ensure lasting results.
Shipwell’s data science experts will work to establish a baseline of your demand using our proprietary analytics tools to provide you with a tailored report complete with immediately actionable recommendations that can help to eliminate inefficiencies from your supply chain — all free of charge.
How can an analysis benefit you?
Performing an analysis will allow you to look at a wide range of metrics including transportation costs, operating expenses and distribution networks. By utilizing advanced analytics tools, the data science team is able to dive deep into your organization’s data to create various “what if” scenarios to uncover the best solutions for creating new efficiencies in your shipping processes.
Some key areas that see the biggest impact from this include:
Decreasing the cost of operations
Modern supply chains are larger and more intricate than ever, which can lead to risks and loss of both time and money at each stage just to keep them moving. And today, many organizations are under additional pressure as the ‘Amazon effect’ forces them to lower costs while providing fast and efficient shipping.
In order to ensure that the logistics team is able to provide this, an analysis will identify what areas of the shipping operations processes are truly working efficiently, and there are opportunities for utilizing money and resources more effectively. From there it’s possible to determine which processes have the potential for automation and where the team may be making decisions based on poor data quality in order to save time and money. On average, our customers are able to benefit from a 30% reduction in OPEX by implementing these changes
Automating even one step of a process can mean significant savings over time, while access to data on pricing trends, forecasts and carrier ratings allows for better, faster and more proactive decisions. The most likely areas for automation could be procurement, order fulfillment, payments and invoicing, shipment tracking and more. Eliminating repetitive, non-value-added tasks, while improving the quality of data at hand can help to reduce the number of man-hours required to maintain an efficient supply chain significantly.
Improving on-time delivery and pickup rates
On-time performance is all about customers and profits, and improving it leads to customer satisfaction, enhances your efficiency and draws new business. So it’s no surprise that it’s one of the key measures of a successful and efficient supply chain, yet in so many cases it is something that organizations struggle with — especially in today’s volatile market.
The first thing any organization learns when setting up a supply chain is that issues happen. What a shipping analysis can teach you is how to better prevent them from causing delays. Sometimes the answer is clear, such as a lack of visibility throughout the shipment lifecycle, and sometimes it is something easily missed, such as traffic congestion or a carrier neglecting to activate tracking. Whatever the cause, with a thorough analysis it’s possible to identify where these issues could be spotted in advance and create a plan for addressing them early. Most organizations we’ve worked with have been able to bring their on-time delivery and pickup rates to 98%.
Through data-powered analysis of your supply chain, you will be better equipped to anticipate potential bottlenecks and implement course corrections. This can help to improve load planning accuracy, provide notification of delivery risks before the load is even picked up, and reduce fees related to late reschedules, detention, and missed appointment times. For instance, improved exception management capabilities could provide real-time alerts when a shipment deviates from the most optimal route or when new risks such as traffic, hazardous weather, or loading dock congestion appear, enabling you to intervene to address these issues.
Most organizations we’ve worked with have been able to bring their on-time delivery and pickup rates to 98%.
Reducing your carbon footprint
Companies are under more pressure than ever to consider the environmental impact of their business practices and operations, and see what they can do to reduce their carbon footprint. ‘Going green’ on a personal level is quite straightforward, but on a business level, it can be difficult to know where to start.
In order to create a serious impact on the sustainability of our clients’ supply chains, our team of data scientists uncovers methods to cut emissions, optimize routes, and reduce waste at all levels, saving one customer 1.7 million land miles and 245,000 gallons of gas — equivalent to 24 trans-Atlantic flights of CO2 emissions saved — and placing us on SDEC’s Top Green Supply Chain of 2020 list.
Identifying areas where shipments can be consolidated to cut down on the number of trucks on the road, planning routes to avoid highly congested loading docks with long wait times, or forecasting demand to reduce waste and decrease lead times are just a few of the ways that an in-depth examination of your shipping processes can reveal. Making these types of ‘green’ changes doesn’t always have to involve a complete business overhaul, with even seemingly small shifts in the way shipments are handled often having a big impact on reducing your carbon footprint and saving on resources.
The supply chain is no longer simply a collection of cost centers operating as an appendage to an organization’s main business to buy parts and deliver products. Today’s supply chain is a key source of strategic advantage. A deep analysis and understanding of all the aspects that go into an efficient supply chain and a strategy to improve it that is followed and understood at all levels — from the logistics managers to the executive suite — are essential to keeping it running smoothly.
Across industries, companies can increase profit, lower costs, provide greater customer experience and achieve higher employee engagement by improving supply chain logistics. In some cases a complete overhaul may be what’s necessary to achieve this, in others it may be small shifts in practices. But whether big or small, any optimization to the way you plan, organize, execute and communicate can have an immediate and lasting impact on your costs, risks, efficiencies and growth. And Shipwell can help you to uncover them.