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Visibility in Transportation Management Leads to Supply Chain Excellence

By Rich Katz, CTO, Elemica

Rich Katz, CTO, Elemica

With visibility as the key driver for an effective supply chain improvement strategy, businesses today must rely on building collaborative relationships in their extended supply chains to gain visibility from end-to-end. To build more powerful relationships, extending across a critical mass of trading partners, companies need to utilize a robust platform like a supply chain operating network, which leads to increased visibility for continuous improvements in company performance, agility, and differentiation.

Unless you have end-to-end visibility across your entire network of trading partners, you and they are operating at a distinct disadvantage. And as supply chains continue to grow, diversify and become increasingly global, total insight, oversight and foresight will become increasingly critical. If you’re not able to clearly see, examine, impact and manage every aspect of your supply chain and inventory processes–order status, shipments, in-transit goods, trade documents, costs, exceptions and more–you might as well be operating with blinders on.

Today’s technologies are allowing all the stakeholders in the supply chain to share a single network. Intra-company and intercompany, across the supply chain and across the globe, from the operator level to the management suite, information on all aspects of production, manufacturing, sourcing, and distribution is increasingly visible and accessible at all levels, so that appropriate decisions can be made and applied.

Of course, achieving end-to-end visibility requires new ways of looking at people and processes. You’ll need both a broad perspective and lots of close examination. Social media helps, too, by allowing you to access information on suppliers of raw materials and services that you won’t find anywhere else.

Gaining end-to-end visibility across your transportation processes delivers:

$32.00 in Labor Savings Per Shipment:

• Automated booking improves productivity and quality of logistics team’s activities

• Site resources are optimized with carrier appointments. Real-time visibility and proof of delivery eliminates tracking activities and dispute resolution.

• Freight Cost Management eliminates post-audits and disputes

• Access to data in single system eliminates data gathering and streamlines analysis

$181.00 in Freight Cost Savings Per Shipment:

• Logistics Sourcing activities improve negotiated rates

• Automation and Visibility reduce errors on shipment data and allow for proactive management to reduce expedited costs

• Time Slot Management dramatically reduces detention charges at load/unload locations

• Collaborating on accessorial improves accuracy, allows for passing charges to customers, reduces disputes

$82.00 in C2C Improvements Per Shipment:

• Automated shipment confirmations from logistics service providers (LSPs) reduces Days of Inventory by speeding up PGI

• Time Slot Management reduces mean lead time and variation, which reduces inventory levels

• Better in-transit inventory visibility throughout long supply chains promotes optimized inventory practices, reducing days of inventory (DOI)

• Multi-party shipments are more prone to delays in pick-ups at hand-off points. Visibility allows more proactive management of these shipments. Reduces DSO.

• Proof of delivery (POD) is required before customer approves invoice. Authenticated POD reduces DSO.

• Can negotiate better terms with (some) carriers because of electronic approval and payment–lowers disputes and decreases variability of their DSO. Increases DPO.

Total savings per shipment is $265 - $325

End-to-end supply chain visibility is a key to becoming a demand-driven enterprise. Enterprises gain significant benefits by collaborating with their supply chain trading partners through supply chain operating networks. According to industry analyst group, Gartner, end-to-end supply chain visibility will increase by 50 percent by 2018.

“Achieving end-to-end visibility requires new ways of looking at people and processes”

Here are some tips on how to enable end-to-end visibility across your enterprise:

Sense and respond are critical processes for supply chain visibility and can only be achieved through a collaborative network that is coupled with robust business process orchestration and advanced analytics.

Visibility encompasses not only sensing data, but also how to analyze it and take appropriate action across the extended enterprise. Next-generation business networks, where commerce is digitized and flows across buyers, suppliers and logistics providers, is key to enabling future looking capabilities.

Use predictive and prescriptive analytics to support your visibility goals. Predictive analytics gives supply chains the ability to respond to actual market conditions, predict consumer behavior, and identify possible delivery constraints.

Eliminate silos within your organization to take full advantage of end-to-end visibility. Typically companies operated in silos, but according to a recent Global Supply Chain Institute at the University of Tennessee survey, while some lines between business functions have blurred, silos still exist, especially between purchasing and logistics. Best-in-class companies tend to have end-to-end supply chain integration.

Create an outside-in culture within your organization by focusing on customers and trading partners. When companies can operate their supply chains to respond directly to external market drivers this is known as the outside-in supply chain. This enables companies to focus more on sensing, shaping and driving an intelligent response to the environment happening outside their internal control.

Utilize cloud-based shared process and information layers within your information architecture to sit above physical assets, supply chain, and operational applications. The cloud can be a real game changer for supply chain applications, allowing greater connectivity, which leads to greater collaboration. The cloud allows for connections to be made rapidly and at a lower cost, opening the door for richer connections to be made–and to be made faster.

Make it easy for trading partners to connect by eliminating barriers to onboarding. A recipe for unmet expectations occurs when businesses attempt to force trading partners to collectively adopt a single process or technology standard. While internal needs can be forced through by corporate mandate, external supply chain partners are not necessarily accepting of their demands. A supply chain operating network truly integrates the extended, varied, distributed, and complex needs of thousands of individual trading partners and their respective enterprises, without requiring any of them to change the way they do business.

Gaining end-to-end supply chain visibility provides significant benefits, such as higher order fulfillment rates, improved customer service levels, higher profitability, increased operational efficiency, and higher revenue growth. Using a supply chain operating network that offers collaboration and visibility capabilities, your company will experience better on-time performance, reduce variability in lead times, and free up working capital.

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