Tag Archives: supply chain management

3 Reasons to Use a 3PL For Retail Supply Chain

With increasing competition in the retail market, it has become very challenging for retailers to efficiently manage their supply chains. Essentially, a smooth retail supply chain strategy is a fundamental part of a positive customer experience, and retail companies strive to reach the golden standard of order fulfillment and fast delivery.

The thing is, most of the retail companies are not experts at logistics and supply chain management, and they don’t have dedicated departments for this branch of business. So, to make their online and omnichannel strategy work, retailers turn to 3PL’s for help. According to Pinsent Masons study, 88% of retail companies that outsourced any type of operation to a 3PL were satisfied with the results.

When is the right time to use a 3PL for a retail supply chain?

Outsourcing logistics to a 3PL is a great step that can take a lot of responsibility off of your plate and let you focus on the main business goals. Apart from time and money savings, third-party logistics providers can offer many substantial benefits to your retail business.

Cost-efficiency

Many companies assume that outsourcing to a third party by default means spending more on service fees. However, all the efforts of a 3PL will eventually cost you less than an in-house supply chain management. Retail companies don’t have the negotiating power of a 3PL. Experienced providers work with thousands of carriers on special terms, and can offer you a much lower shipping price than the market average.

Additionally, a 3PL is a one-stop-shop for most of your supply chain needs. That means you don’t have to invest in warehousing, technology, and a logistics team. Ultimately, it’s cheaper to delegate logistics to the industry experts instead of learning every process from scratch and experiment on your own business.

Streamlined processes

Retailers have numerous distribution channels. Managing outbound shipments and consistently storing all of the data can be extremely challenging. 3PL’s take this burden away. Good logistics providers have special technology, like a transportation management system, where you can navigate any information on a certain shipment. In a dynamic world of retail, the ability to streamline transportation processes and track shipments is critical for a smooth business flow.

Flexibility

Another reason to outsource to a 3PL is their ability to adjust to your business needs. In most cases, 3PL’s provide an extremely wide span of services. You can outsource a single link, or an entire supply chain, and still be confident about the results. From transportation to inventory and returns management, you can always add up or take off operations from an outsourcing list.

Final thoughts

At the end of the day, customer demands set the bar of performance level for retail companies. Those who strive to succeed in the competition constantly look for ways to improve their business flow and efficiency. Eventually, more and more retailers turn to 3PL’s to take care of their supply chains and get excellent results while focusing on their core competence.

PLS Solutions for Retail Logistics

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Best Practices for Inbound Freight Management

Every company works to analyze its supply chain costs and eliminate unnecessary costs and processes. Regardless of how complex your supply chain is, every part of it matters, however, not every part of the supply chain is assessed equally. Inbound shipments are often overlooked by companies, although they can account for a substantial amount of transportation costs. In fact, for some companies, inbound shipment costs can reach 40 percent from the entire transportation budget. That’s why it’s important to know some useful practices for inbound freight management.

Management practices for inbound freight

Inbound freight is cargo that comes from your suppliers and vendors. Therefore, it can be complicated and challenging to control inbound shipments and simultaneously balance relationships with your suppliers. Having robust inbound freight management can significantly reduce your transportation costs and provide better visibility into the shipping process.

Analyze your current strategy

Before trying any new strategies or making any changes, look at your current approach. Here are some key things to pay attention to:

  • Vendor compliance
  • Control of inventory
  • Visibility and tracking
  • Relationships with the supplier
  • Inbound freight costs

Try to honestly answer whether your vendors meet the compliance program, what level of supply chain visibility you have, and how much control you have over the movement of inventory. Essentially, relationships with your vendors matter even more. If you have poor communication, most likely you’re losing many benefits of a collaborative partnership.

Inbound freight management is a wide term. You can start with minor changes like checking on-time deliveries to a complete strategy shift and reload. Depending on the current state of things, you will need more or less effort to make the best out of your inbound shipments.

Inventory is the key to successful inbound management

One of the core factors of a good inbound strategy is the ability to properly control and manage your inventory. Increasing administration over the transit of your product and its quantity will help benefit your supply chain in the long run.

Visibility

One of the crucial factors of successful inbound management is high visibility into the supply chain. Thanks to technology, companies can track their shipments through a transportation management system. Additionally, TMS lets you manage shipments and collect valuable data for strategic planning and defining inefficiencies.

Final thoughts

Proper inbound freight management can bring value to your supply chain and cut transportation costs. The key to a successful inbound strategy is to make it among your top supply chain priorities. A reevaluation of your current strategy will help outline working solutions for the future.

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How Does Supply Chain Management Work?

Supply chain management is a set of activities that includes supply, production, and distribution of a company’s goods. This production cycle plays an enormous role in any business. Proper supply chain management can reduce transportation costs and enhance productivity, and in order to succeed, companies should learn how supply chain management works.

What processes does supply chain management include?

A supply chain process can be described as a simple example: imagine a cake. First, raw eggs are transported from the farm to the grocery retailer. Then, the eggs are bought by a bakery to bake a cake. The cake is then either set out in the bakery or delivered to a grocery store to be sold to the final customer. All of the processes that stand in-between the raw egg and shelve-ready cake are classified as a supply chain.

So, how does supply chain management work? As a first look, the process can seem very complicated. However, supply chain contain many important key components that make it work properly.

What are the core components of supply chain management?

Transportation

Essentially, transportation is one of the main components that make the supply chain work. Transportation plays a crucial role in every step of product movement, allowing companies to focus on arranging well-organized, smooth logistics for their goods.

Communication and visibility

Supply chains are different in every industry. No matter if it’s a small local business or a large enterprise, supply chain management is a complex process. With so many links involved, it requires proper handling. Without efficient communication between manufacturers, suppliers, vendors, distributors, and retailers, supply chains would fall apart in no time. That’s why consistent communication between all parties is crucial for efficient supply chain management. Another essential part of a successful production cycle is visibility into the supply chain. That means you can easily access and analyze all the needed information to make strategic decisions.

Finance

A complex supply chain suggests high financial responsibility. Bills, invoices, and reports are key points you can’t run production without. Accounting plays a large role in supply chain management since all of the payments have to be documented and stored in a proper way.

Final thoughts

Of course, supply chain management involves numerous other activities and processes. However, the above listed are the primary parts of any supply chain. Today, companies constantly work to enhance their efficiency by applying various supply chain management practices and technologies. With more innovations and automation, it becomes easier to focus on the strategic part of the supply chain management than on its execution.

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How Efficient Transportation Can Strengthen Your Supply Chain

Supply chain management (SCM) is the heart of a company’s operations. Therefore, the company strongly depends on how smooth your supply chain is. Maintaining a robust supply management strategy is complex since it involves numerous processes that require planning and constant control.

What is supply chain management?

SCM is a complex process involving the organization and execution of product flow from the supplier to final customer in the fastest and a most effective way. 

The role of logistics in supply chain management

Supply chain management is often confused with logistics management. However, logistics is just a part of the supply chain. Also, transportation is one of the key components in the entire product flow, and it is more of a glue that sticks every part of the operations together. Therefore, a robust logistics strategy can contribute to increased efficiency and ensure your supply chain survives a long run.

How effective logistics can benefit your supply chain

One of the main challenges in an efficient supply chain flow is risk management and sustainability. All the efforts are steered towards balancing the quality and the final price, so for many companies, it becomes a struggle of cutting costs while providing a good service at the same time.

transportation for supply chain

For an efficient supply chain, companies work on developing robust transportation solutions. A transportation network allows a company to reduce shipment costs and increase service levels with little disruption to any processes. A smooth transportation process mitigates delays, provides visibility into freight shipping and saves your company’s budget.

Working with a 3PL

Companies have to impress customers and innovate processes. 75% of 3PL users say 3PL’s provide new and innovative ways to improve logistics effectiveness. Regardless of mode or freight volume, 3PL’s can assess and tailor solutions to a company’s needs. Through a 3PL, companies can gather transportation and logistics information to forecast accurate needs, influence supply chain decisions and can ultimately grow the processes efficiency and customer service.

Your supply chain is just as good as your logistics is. Developing a beneficial transportation strategy is essential for smooth product flow. Partnering with a 3PL can take a hassle out of your company and is more cost-efficient than creating an in-house logistics department.

If you need help and expert consultancy with your supply chain management, contact us now with any questions you have.

The Future of the Freight Supply Chain

The Future of the Freight Supply Chain

From drones for online fulfillment to mobile robots in warehouses, the current supply chain is undergoing a major transformation. With the extensive possibilities in AI, the future supply chain holds the promise of being completely autonomous and self-sustaining.

The supply chain of tomorrow will be more efficient, faster and most importantly, self-orchestrated. This unique transformation will be driven by a few essential technologies that will carefully and strategically be adopted by industry participants over the next 15-20 years. Here are a few changes that will likely automize the supply chain in the future.

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Autonomous Fleets

Drones are currently getting a lot of attention in the supply chain news and have stirred up a lot of conversation since Amazon announced its plans to launch drones for last-mile deliveries. Before drones came the experimentation with the first “vehicles” to become autonomous in the supply chain – forklifts. A new type of forklift, called “vision-guided fully autonomous mobile robots,” has the ability to process orders four times faster than a human.

The possibility of fleets becoming completely autonomous seems very real. Truck platooning and autonomous trucks could be a reality by 2030. Rolls Royce has even announced plans to launch autonomous cargo by 2030. One benefit of this is truck platooning, for example, which could save as much as 20 percent on fuel costs.

E-Brokerage Platforms

Growth in e-commerce, along with new and evolving technologies, will bring in new solutions for freight and logistics firms. The introduction of digitalization in trucking will force traditional freight brokers to move their business model toward mobile-based, freight brokerage-type solutions. Mobile apps are critical to a seamless, real-time brokerage system, also known as the “uber of trucking.”

Predictive Optimization

One big example of this is Amazon. Amazon wants to ship your products even before you know you want them. Their current patent on “anticipatory shipping” demonstrates a strategy where Amazon will send out deliveries to partial street addresses or zip codes to get the products as close as possible to the consumer and then in-transit complete the address and route it to someone who has placed the order.

To meet this new world of demand, freight and logistics supply chain players should understand the ways different new technologies and practices are evolving. And just as importantly, they should master the timing. Knowing the stages of change that lie ahead for the market as a whole may be the key to knowing which investments to make at which time.

 

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4 Tips for a Sustainable Supply Chain

Pressure to push sustainability into the supply chain has significantly increased in recent years. Having a sustainable supply chain is quickly becoming a necessary part of every business model.

By managing and improving economic, social and environmental performance throughout supply chains, companies can cut back on the waste of resources, optimize processes, uncover product innovations, save costs, increase productivity and promote corporate values. Research shows the business case for supply chain sustainability is growing.

Incorporating sustainability into a company’s supply chain can be complex, but the failure to act may be the biggest risk of all. Here are 4 tips for companies to move toward sustainable supply chains:

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1. Map Your Supply Chain

Make sure that you fully understand the unique challenges your company and your suppliers face. Many companies do not have a good understanding of the environmental impacts of their supply chain. A way for companies to get started on being more sustainable is to inventory suppliers, identify the most significant environmental and social challenges they have and prioritize efforts with suppliers.

2. Communicate Expectations

Focusing on sustainability within your supply chain is a great way to communicate corporate values and culture to your suppliers and customers. Establishing and communicating expectations through a supplier code of conduct is a critical step in involving suppliers in your sustainability efforts.

3. Develop Training and Capacity Building Programs

This is an important step in improving sustainability and driving behavioral changes throughout your supply chain. Many external resources are available to support these efforts, and some are tailored to specific sector needs.

4. Join Industry Collaboration

Many companies recognize that complex supply chain challenges cannot be solved by individual efforts and that industry wide collaboration is required. These collaborations help prevent audit fatigue, training redundancy and mountains of paperwork for suppliers working to meet similar requirements from their customers. Working with your industry peers is a great way to share knowledge about the sustainability performance of your suppliers.

Strengthening the industry’s sustainability efforts as a whole, in turn, benefits each company within it individually. The sooner you establish a sustainable supply chain, the better, as the benefits and requirements to do so will only continue to grow as time goes on.

 

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Increase Lead Times, Decrease Costs

The concept of lead time when booking loads is a commonly overlooked factor when delivering freight efficiently and economically. You may have heard your logistics partner say that providing more notice days or lead time for a shipment could help lower costs…

But how is this possible?iStock-698740028

To put it simply, the more in advance a third-party logistics provider (3PL) books a load, the more time and control they have over the following:

  • Negotiating pricing
  • Finding savings or efficiency improvements
  • Securing top providers
  • Scheduling ideal delivery times

Whereas on the other hand, when working to book a truck for next-day delivery, capacity is tighter, prices are usually higher and fewer delivery options are available.

In addition to these basic principles, more time between when an order is scheduled and when its picked up allows your logistics provider to play more of a consultative role. Instead of immediately responding to a request, they can analyze the potential for more cost savings and efficiencies. This could include suggestions to switch from truck to rail, try new order consolidation techniques and/or switch up network configuration.

Benefits of Providing More Shipment Lead Time

  • Lower rates
  • More capacity
  • Preferred carrier availability
  • Access to ideal delivery appointment times
  • Higher service levels
  • Better on-time performance
  • Fewer surprises
  • More control over expenditures
  • Possible identification of new savings and efficiencies

To sum it up…

Advanced scheduling is a step in the right direction towards greater visibility, as well as logistics managers having the ability to regulate time in their operations more precisely, which in turn can generate more capacity. That type of visibility goes well beyond the technology used to track and trace pallets and trucks today.

 

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Mistakes Small Businesses Make in Supply Chain Management

Small businesses often have limited human resources and have employees in charge of a wide array of different tasks. If the business has the need to ship certain products occasionally or on a regular basis, one of these tasks is managing its supply chain. It’s quite easy to make supply chain management mistakes.

Well, how hard can it be to get the product from point A to point B, you may ask? Honest answer: if you want it to be efficient and successful, it may not be that easy! Employees do their best to keep customers happy and costs under control.

At the same time, there are certain common supply chain management mistakes small businesses often make in managing their supply chain which may end up negatively affecting their customer satisfaction rate as well and their bottom line.

Let’s look at a few supply chain management mistakes that might be hurting your business:

A Non-Logistics Logistics Manager

Sounds a little confusing, right? It’s pretty simple. As mentioned before, small businesses often operate with limited resources, and it’s common for a person without any supply chain background (for example, a salesperson) to be in charge of arranging the whole shipping process to the end customer. The lack of industry-specific expertise is quite a disadvantage and may cause shipping disruptions and financial losses.

Missing the Details

This, as well as all other mistakes, often stem from the one main issue mentioned above – not having anyone with solid experience and understanding of logistics processes and details. Logistics professionals are aware of the pitfalls and tricky parts and possess the expertise which allows them to find cost-effective options and avoid unexpected issues/up charges.

supply chain management mistakes

It’s important to research all the details and make sure you are not going to end up facing hidden costs in the pursuit of the best “upfront” price.

Ask straightforward questions about anything which might potentially come back to harm you, and always ensure all the information you provide is accurate and extensive.

Lack of Automation

It’s common for small businesses to lack specific software and automated processes due to obvious reasons – automation is an upfront expense. However, automation software is an investment and can help the future of your business. Investing in automation will save you time and money in the future, help your business and your supply chain be more efficient which is a direct cost-saver.

With that being said, hiring a logistics professional for a small supply chain or investing in automation may not be at the top of your priority list for understandable reasons. What can you do in this case to manage your supply chain efficiently? You can reach out to a 3PL. They can offer the expertise and software that will be highly beneficial for your supply chain. A good 3PL can help you cut down your shipping costs and reduce your logistics-related stress.

Learn more about our supply chain management services and contact us for the supply chain advice!

 

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4 Reasons To Use A 3PL In Times Of Capacity Crisis

It’s not a secret that we are all currently operating in the conditions of the record-breaking capacity crunch. The crisis has been caused by several factors which we have previously discussed in our post, even more so with the ELD mandate finally going into effect on December 18th. This fact adds up to the reasons to use a 3PL in the tight capacity time.

reasons to use a 3plPredictably, capacity tightened further during the last week of December. Yes, there were fewer trucks out there due to holidays, but same goes for loads.

We witnessed the load-to-truck ratio increase significantly compared to the same time last year, vividly illustrating current market conditions.

According to recent DAT data, dry van load-to-truck ratio hit the highest monthly average ever recorded by DAT of 9 dry van loads per truck (139% higher than in December 2016). The flatbed ratio increased by 77% compared to the same time last year hitting 35.6 loads per truck, while reefer ratio of 14.1 loads per truck was 73% higher than that of December 2016.

Undoubtedly, this affects both, shippers and 3PL’s. However, a 3PL may have better capabilities of navigating in the tight market.

What are the reasons to use a 3PL in the capacity crisis?

Carrier Relationships

A well-established 3PL will have years of thoughtfully developed and nurtured carrier relationships. Strong relationships are crucial for stability and better rates, and you will be able to benefit from them.

Buying power

Hand-in-hand with the above, a 3PL has volume across various transportation modes, which gives them leverage in negotiating with new carrier contacts and developing mutually beneficial relationships. This helps them constantly expand their network and move your freight easier.

Expertise

3PL’s work with various customers and come across various, often uncommon, situations. They might be able to offer an alternative, more efficient and cost-effective, solutions for your freight based on their previous experience.

Support

It wouldn’t be called “crisis” if it was pleasant! At the end of the day, a 3PL is there to make your life easier. Their priority is to provide value-driven transportation solutions for their customers and make their supply chain operations a little less stressful.

We are already in 2018, and the forecast remains the same: the crisis is not expected to pass before the end of the year. The best way to survive is to use all the tools at your disposal and maximize your efficiency.

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Moving Trading Partners into Digital Supply Chain

It’s 2017, technology is practically everywhere and everyone is digitally connected. Most businesses have adapted to the changes in tech, yet some are still behind.

That’s not necessarily a bad thing! Every business works how they know best and to the best of their means. Digital supply chain is the optimal solution for businesses looking to obtain a game-changing benefit.

Based upon a SCM World study, 77% of companies in early stages of B2B integration processed less than 50% of their transactions digitally.That means there is a remaining 50% or more companies that are currently using traditional methods to exchange information (i.e. email, fax, and phone) instead of utilizing automation. That separation of formats creates a barrier between two parties which will lower total returns and affect projected goals.

So how does a large, digital business connect with a smaller business that is using traditional methods? Well, it’s easier than you think

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Utilizing electronic data exchange (EDI) or extended markup language (XML) will yield the highest results by generating and receiving digital transactions between trading partners.

What is EDI? EDI is the computer-computer exchange of business documents in a standard electronic format, typically between business partners. EDI allows the ability to create an automated document process which will save time and money.

It will also improve processing speed, reduce the number of errors, and aid the relationship between partners.

Now, not all business partners have the means to utilize EDI. It may be the case of their IT department not being large enough to manage EDI, or it may be that they don’t have an IT department.

The cost and usage time of using EDI up may be too great if their larger trading partners don’t transact as frequently with them. Nevertheless, if you have a non-EDI partner, there are still options you can use to make digital transactions work effectively.

  • Web Apps. Web apps are very common in today’s solutions, they allow easy access from any computer your partner may use while providing a simple solution to digitization. Web apps can provide common data entry and the ability to review transaction history. The data entry becomes a digital transaction which can be processed automatically and converted to EDI to be processed like other digital transactions. Web apps can reduce errors and provide feedback based uon executed business rules.
  • Web Forms. Web forms are useful for creating data entry when filling out specific documents. They are simple to setup and help by automating the processing. Just like a web app, a web form can be converted into EDI and processed. There are some drawbacks in that there is no feedback given to the user (which a web app can provide).
  • Fax & PDF to EDI. Both Fax and PDF can be converted into EDI which would allow those small partners to continue their normal transaction methods. It would require you to scan the received documents and then convert them into EDI data for processing. This method should be reviewed by an individual to ensure the data is correct, we recommend indicating the required fields.
  • Spreadsheet to EDI. Using Microsoft Excel or a similar software is similar to a web form, it can check for user error and check the data field contents making sure they are filled out and complete. It’s a method that is simple to use as many businesses have access to Excel.

Once you have finalized your best form of data transaction with your trading partner, you can start enjoying the results. You will see:

  • Faster invoice time
  • More responsiveness to unforeseen events
  • Faster inventory turns
  • Reduction in cash to cash cycle time
  • Improvement in successful product launches
  • Improvement in perfect orders

 

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