If there is one common law in logistics, it’s that we’re all pretty much connected. Yes, technology is dramatically changing the logistics landscape and can be a service differentiator, but at the end of the day, relationships make for a great supply chain. And we’re not talking about “let’s play golf after I buy you lunch” relationships. We mean vendors, suppliers, and clients’ multi-functional teams working together with a shared vision of success, a healthy discussion on goals, and the openness to hold each other accountable. In a word: collaboration.
Looking ahead to 2023, let’s identify a few areas where our team at Wavepoint 3PL believes collaboration will go a long way in achieving excellence.
Collaborate on Total Transportation Costs
Starting with your best carriers, have an open dialogue regarding how you can lower your total transportation cost. Don’t start down the road of rate-per-mile; it just creates a somewhat adversarial dialogue. Instead, consider exploring an alternative approach, such as:
- Longer contracts on certain lanes gives your carrier the opportunity to develop backhaul programs
- Committing to greater volume in specific lanes
- Shipping on off days, such as Fridays, when your carrier has more available capacity
- Extending or being more flexible with lead times
- Offering assurances to load your carrier quickly, based on agreed KPIs
- Look for opportunities to bundle transportation with warehousing services
This change from a cost-based to a value-based way of thinking requires a paradigm shift that is often difficult to achieve but it’s the catalyst for any solid, long-term partnership.
Leverage Analytics: Measuring Shared Data
Given the complexity of supply chains, it’s easy to become overwhelmed by the sheer volume of data. Focus on the lowest hanging fruit, and begin your collaboration by establishing realistic goals, what data you need and how to capture it as the basis for benchmarking and monitoring performance. Ask yourself what matters most to your brand and what’s most important to your stakeholders – available capacity, shipping volumes, end customer needs (or demands), densities, and costs; determine what is key to your success.
Your team will benefit the most when all stakeholders work with consistent and accurate data. That requires shippers, 3PLs, and other supply chain participants to share information. You’ll uncover additional value by pulling other supply chain stakeholders, such as procurement, in for their collaborative contributions. As the saying goes, you can’t manage what you don’t measure. Tracking the right data will give you the clarity and confidence you need to invest your energy where it will produce the highest ROI.
The Trend for Visibility Continues
With only 6% of companies reporting full visibility, it’s no wonder supply chain visibility is among the top strategic priorities of companies worldwide. The most frequently cited technologies remain those that are execution- and transaction-based, including transportation management-planning (62%), transportation management-scheduling (57%), and warehouse/distribution center management (48%).
It’s no wonder shippers will look for 3PLs with technology capable of integrating with their own. As businesses strive to eliminate manual processes, supply chain technology is a big part of the discussion.
Shippers with large order volumes will want to have the ability to tie their point of sale, order management software, accounting systems, or any other software into that of the 3PL.
More reasonable, depending on where you are on the technology spectrum, you may elect to focus on the basics:
- Order (PO) Visibility
- Shipment Visibility
- Inventory Visibility
- Cost Visibility
Regardless of your goals in 2023, supply chain stakeholders willing to share in a collaborative process are the ones most likely to succeed.