How Transportation Visibility Is Creating Supply Chain Agility

This post was originally published on the MercuryGate blog. View the original article here.

The need for transportation visibility and supply chain agility has never been higher than during the COVID-19 pandemic. According to the Sourcing Journal, “Brands and retailers have always needed software capabilities that boost agility, accelerate decision-making, respond to consumer demand, and keep suppliers funded. But as a global pandemic makes collaboration more difficult, elasticity and agility are becoming a key factor in the supply chain’s ability to recover—and that includes internal sourcing and finance teams. More than ever, supply chains need to adapt to different methods for conducting sourcing.” Thus, supply chain leaders need to consider why organizations are working to increase agility, how visibility plays into the equation, and a few steps for maximizing agility through visibility.

Catalysts For Supply Chain Agility

Informed decision-making is the backbone of transportation visibility. When a supply chain is designed to leverage the highest quality data, derived metrics of key performance indicators (KPIs) have the net effect of automating data collection. Furthermore, access to real-time data is associated with enhanced responsiveness within the supply chain. It allows companies to better manage freight and remain proactive around unexpected changes in transit times.

Transportation Visibility Promotes Supply Chain Efficiency

Leveraging an advanced TMS and connected visibility platform streamlines many of the complex operations in the everyday supply chain. While supply chains can be very diverse, there could be as many as 50 touchpoints from manufacturing to the final sale of products. And this is still not the end of the supply chain shipping process. For example, supply chains are increasingly focused on reverse logistics as e-commerce activity continues to comprise a growing percentage of total retail sales.Furthermore, increased visibility enhances an organization’s ability to intervene when a problem arises. For example, regarding the issue of late shipments, a 2018 study by “American Shipper,” entitled “A Clear View of Supply Chain,” reports Transport Topics, found “that 54% of 3PLs said they either lost business or did not know if they had due to their visibility capabilities. A late shipment or unreported delay can have a ripple effect on the productivity of a supply chain. For example, a factory might need to either idle or ramp up a production line to compensate; a retailer may have to work around an inventory shortage on store shelves, or a distribution operation may need to adjust staffing on its loading docks to account for both unproductive time and for personnel adjustments when a shipment does finally arrive. In all these cases, what you don’t know can hurt you (and others in your supply chain).”Increasing visibility helps carriers work together with shippers, avoid delays when working through third-party logistics providers (3PLs), collaborate with LSPs, and ensure customers have proper proof and notification of delivery. It is a win-win situation.

Best Practices For Creating Supply Chain Agility Through Transportation Visibility

Here are three principles supply chain executives should follow to maximize agility through visibility-driven decision making:

  • Connect the top-down supply chain. A connected supply chain allows immediate access into insights and performance metrics that indicate how a specific area of the supply chain functions. For instance, recent flooding in Wuhan inhibited facial mask production, creating disruptions to lead times. By knowing what’s happening in real-time, supply chain partners can take the appropriate steps and make necessary adjustments.
  • Rebalance the supply chain network based on data. It can be troublesome to forecast freight demand; having to redeploy trucks without planning sets organizations up for failure. Using an advanced system to forecast demand, carriers, LSPs, and 3PLs can stabilize networks and avoid massive disruptions.
  • Align freight rates based on market data. Like truck deployment planning, setting rates based on real market data remains another critical step in creating supply chain agility. Of course, only by connecting, analyzing, and applying data can organizations successfully set rates that reflect actual market conditions.

Enhance Transportation Visibility And Reap The Rewards Of Agility

The value of transportation visibility hinges on the ability to extend that visibility to all supply chain processes. When areas of the supply chain remain disjointed, the value declines, and it grows harder to make informed decisions. Fortunately, supply chain executives can rest assured their TMS and existing systems have the needed connectivity level by partnering with project44.

Christian Piller is Vice President of Value Engineering at project44.