By Eric Meister | Logistics Viewpoint
As businesses look to implement supply chain efficiencies, the ideal of what should be done often conflicts with the reality of what can be done. Nowhere is that conflict experienced more than when businesses attempt to master their inbound transportation. The promise of combining inbound and outbound freight to leverage volume for improved service and cost is often thwarted by the reality of operational differences between inbound and outbound transportation networks, varying degrees of leverage in supplier relationships, organizational structures that inhibit total cost decision making, disparate systems and platforms, and the lack of data and metrics to make informed decisions. For these reasons, the benefit of a synchronized inbound and outbound transportation network remains unrealized for many companies. Flexible technology and service solutions that connect supply chain partners, provide visibility to the process, and generate actionable data are foundational to a comprehensive approach to bridging the gap.
Shipping Terms Conversion vs. Cost and Service Improvements
Attempts to master inbound transportation often initially focus on the conversion of shipping terms based on the assumption that savings, service improvements, and control are directly related to the volume of freight that is directly contracted with carriers. While terms conversion can be an important component of the process, sustained improvements and control are driven by first determining the comparative strengths of the supply chain partners involved and the implementation of business processes that provide transactional visibility to inbound shipments. In the context of the overall supplier relationship, evaluating the competitiveness of the freight costs embedded in product cost using market data allows for a surgical approach to change based on comparative strength. Connecting suppliers, carriers, and warehouses with an embedded best practice technology platform that provides visibility to all inbound, regardless of shipping terms, allows the capture of activity, volume, cost and service information to drive ongoing analysis and discussion. This approach allows for a data driven engagement with internal and external partners and provides the platform to ensure negotiated cost and service expectations are delivered. The combination of actionable data and visibility is the real driver for sustained improvement and increased control over transportation networks on the path to inbound transportation mastery.
Leveraging Transparent Transportation Networks to Become a Supply Chain Partner of Choice
Once the opacity of the transportation network has been cleared with actionable data and operational visibility, the next foundational element is determining the approach to managing this newly transparent network. Does the carrier network change? How are service and compliance issues handled when changes are implemented? How are increased freight volumes managed with existing personnel? How is information shared? Having the organizational resources to effectively manage a transparent transportation network increases the overall competitiveness of the supply chain and remits benefits to carriers, suppliers, warehouses, and internal customers – purchasing, operations, and finance. Providing data that partners need to grow and a process that makes it easier to do business strengthens your position as a supply chain partner of choice.
Building the Bridge
Implementing supply chain change requires an engaged, cross functional team of internal and external partners with the right skills and time. Selecting providers that have a flexible, comprehensive approach to technology, data, analysis, and execution services to support that team is critical to timely receipt of benefit. Working with providers that build transparent transportation networks ensures the benefit of change remits back to participants. With actionable data, visibility, transparency, and the right partner engagement, companies can build and cross the bridge to inbound transportation mastery.