Tag Archives: supply chain management

How Shipping Lead Time Impacts Freight Rates

What is a lead time in shipping?

The lead time in shipping is the time gap between the initiation of the order to the complete execution. For example, it is time an object travels from the primary supplier to the final receiver. The concept of lead time when booking loads is a commonly overlooked factor when delivering freight efficiently and economically.

Why shipping lead time is important?

Providing more notice days or lead time for a shipment could help lower costs. Extending shipping lead time can be beneficial in many ways, including:

  • 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

The role of shipping lead time in your supply chain
lead time

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 it’s 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.

Final thoughts 

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.

 

Continue Reading the PLS

 

 

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!

 

Contact Us

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.

Learn more about our Outsourced Transportation Management services! 

Contact Me

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

iStock-642827962.jpg

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

 

Learn More about PLS PRO Here

 

 

Why Is Supply Chain Visibility Becoming More Important?

Clear visibility of all processes is important for any business – you cannot run your business efficiently with your eyes closed. Good business runs as a well-oiled machine, and you cannot achieve that without the full visibility – especially when it comes to managing your supply chain.

Of course, supply chain visibility has been important before, but even more so now. What changed?

Supply Chain VisibilityManaging the complexity

Supply chains are becoming more global and complex. It’s much more complicated to manage your extensive supply chain efficiently and ensure smooth day-to-day operations. Losing visibility of the processes will decrease the service level and trigger unexpected issues and extra costs. Staying on top of your complex supply chain from production to the final delivery is crucial.

Beating the competition

The competition is continuously getting tougher, regardless of the industry. While you are struggling to stay ahead of your competitors – so are your customers. Logically, they require higher quality service – faster and more efficient.

The customers are less likely to accept constant delays or issues which result in them letting down their customers and losing the competition. Even if they are an end customer – they are likely to switch to your competitor, who can provide better service. Good supply chain visibility is one of the most important components for ensuring the stable workflow and high service levels.

Analyzing, Anticipating and Reducing Cost

We have covered the importance of supply chain analysis in previous blogs – it’s a must-have tool to anticipate potential risks and make data-driven, evaluated and objective decision. Quality analysis is impossible without the supply chain visibility. The current market is getting more fast-paced and staying ahead of the game is the best way to ensure your business is successful. Moreover, it gives you an opportunity to pinpoint the inefficiencies which lead to extra costs and make your operations more cost-effective.

Implementing and investing into your supply chain visibility might seem overwhelming at first, but it is absolutely crucial to the success of your business and will pay off and help you keep your business ahead of your competitors in the fast-paced and rapidly developing markets.

Read more: Why Shippers Love Supply Chain Visibility, 5 Secrets to Master Supply Chain Visibility, How this Company Grew Visibility with a 3PL Partnership 

Request Freight Assessment

5 Benefits a 3PL Can Offer Smaller Businesses

Are you a small business owner? Then you know that sometimes you can be overwhelmed with all the orders and the urgent need to meet all the delivery requirements, whether it’s the material needed for production or a final delivery to your customer. That’s where a 3PL small business shipping can help.

3PL small business

Hiring someone specifically to manage your transportation needs doesn’t seem cost-efficient, but handling your supply chain is becoming more troublesome and overwhelming – and takes too much time which could’ve been spent on growing your business. Often, you’ll find yourself spending more money than you would with outsourcing. That’s where third-party logistics services can come to the rescue!

There are a number of benefits a 3PL small business shipping can offer you:

Expertise

Shipping may only be a part of your business, but it’s a 3PL specialty. They have seen it all and know what they are doing, whether it’s the rates or the most efficient mode of transportation. A 3PL can help you fulfill the orders more accurately and avoid possible mistakes which may trigger delays and extra charges.

Leverage

Are you shipping a lot of LTL? While your 3PL might be partnering up with the same LTL carriers you’re used to, they might be able to offer you better rates. A large 3PL has a buying power a smaller business doesn’t have this leverage (just imagine how much freight a 3PL ships daily!), which provides an opportunity to negotiate better rates. This also applies to full truckloads.

Network

Any 3PL ships an impressive number of loads non-stop and daily. They are screening and adding new carriers to their base every day. A 3PL can find a carrier for your shipments much faster, will be responsible for checking their safety and minimize your risks of giving your freight to someone who has no intention of delivering it.

Service

The main reason we all partner up with any third-party service providers. A 3PL will provide you the service you need – from tracking loads and reporting to resolving issues in transit. They will focus on your needs and strive to provide the service you expect to maintain the business.

Saving your time!

Most importantly, a 3PL will handle your shipping and free up the time to focus on sales and development. Instead of spending the whole day trying to arrange transportation and handle the issues that inevitably arise – you can contact your 3PL and let them handle it while you are working on growing your business.

Still looking for a perfect 3PL for your business? We can help.

Contact Us

Read next: 8 Steps to an Optimal 3PL Experience, Opinions on Outsourcing, 3PL Focus on Adding Value

How Supply Chain Analysis Keeps Your Business on Top

Managing a supply chain is all fun and games until you bring efficiency and profitability into the mix.  No matter how good the product is, a poorly-managed supply chain will give your business no chance at real success.

A supply chain is a complex network of multiple elements, each having its own characteristics and priorities. These elements must work in sync with one another to produce results while keeping costs down and increasing customer satisfaction.

Managing this complex structure efficiently is crucial for the overall success of the company. Staying on top of the constantly changing market, customer demand and their expectations can be a challenging task.

Taking an analytical approach to supply chain management helps businesses shape their decisions and ensure long-term benefits

Get smarter and optimize processes

Proper supply chain analytics determines a set of metrics and KPI’s which are used to evaluate historical data, identify and eliminate major process disruptions.

Changes and improvements based on this data increase overall efficiency and lead to cost optimization and higher customer satisfaction rate as a result of a more reliable and consistent supply chain.

It’s all about the dataiStock-522303674.jpg

Analytical data determines unbiased trends and predictions, which trigger evaluated decisions backed-up by the quantitative and proven data. Decisions based on the objective analytical results help shape the company strategy. Any strategy capable of ensuring long-term goals and success should be responsive and able to adapt to the fluctuating market and demand.

Contingency planning and risk evaluation

Evaluating risks and their potential impact on the business is one of the main purposes of analytics. It’s aimed at forecasting and anticipating changes which can cause financial losses and service disruptions. Being prepared and having contingency plans in place helps a business to keep its balance and avoid negative impact.

Did someone say sales boost?

Our end goal is to sell products to generate revenue. Efficient, profitable sales and business development efforts are a must-have for any successful business.

Analyzing the patterns and the underlying reasons for redundant stock or underdeveloped markets and applying this data to accurate forecasting contribute to more targeted and thus effective sales and development strategies.

Continuous improvement

Underperforming suppliers, production disruptions, delivery delays, and any other negative factors tend to pile up and cost businesses a fortune. Investing in the supply chain analysis helps to optimize processes and raise service standards continuously.

Efficient and flexible supply chain, synchronized with the current demand and expectations, ensures customer satisfaction and loyalty, and well as stable growth and overall profitability.

Proper supply chain analysis can help businesses stay ahead of the market fluctuation, maximize their profit, and increase the service level while keeping costs down and minimizing risks.

Need help optimizing your supply chain analytics? Contact us.

 

Contact Us

4 Ways to Maximize Your Logistics Professionals

With the continuous evolvement of global supply chains, there is a greater emphasis on investing in experienced logistics and supply chain managers. This industry movement has caused 4 key trends in logistics and supply chain education and career development for managers to look out for.

1. Look for a holistic Supply Chain education that includes transportation

In recent years, there has been a notable increase in professionals enrolled in master’s supply chain programs. However, most of these programs are focused on the broader logistics and supply chain management areas, while lacking in the transportation segment. This is attributed to the common fallacy that you can’t truly “teach” transportation.

Schools such as Penn State University have added courses on transportation in recent years to begin bridging that gap. While there can be an improvement on the transportation front, professionals agree that universities do a respectable job at creating current, relevant curriculums for the ever-changing supply chain industry.

2. Millennials: Check yes to hands-on experience

Millennials are the future of most businesses today, especially in the logistics and supply chain management industry. With such a large growth, it is more important to understand how to train these professionals for the best return on your investment in the individual. Companies should use a combination of theory and hands-on experience when training the newest decision makers in their firms. It has been tested and proven that hands-on experience improves retention and performance in individuals. By using this combination of teaching, companies can better train the next generation of logistics and supply chain professionals.

3. Compensation hikes, especially for e-commerceiStock-579259240.jpg

Driven by the continuous growth of e-commerce, there are increasing demands facing logistics managers. Not surprisingly, this added responsibility is pushing up industry salaries.

Logistics Management released its 33rd Annual Salary Survey conducted by Peerless Research Group; this found a $10,000 increase in income for individuals who have been in their current e-commerce position for 3-5 years. This rising compensation trend is something every logistics and supply chain hiring manager should be aware when it comes time to hire more professionals.

4. Opening C-suite opportunities for logistics and supply chain managers

As the supply chain is growing in importance and relevance, more supply chain and logistics managers are filling C-suite and boardroom chairs. Company focus on the bottom line makes for a persistent need to cut costs and save money, which is where supply chain and logistics professionals come into play. These professionals also add value to a company with their innovation on the product and efficiency front.

By understanding and following these 4 trends, companies can maximize their return on investment of employee hires. To learn more about how PLS Logistics Services runs our business, follow the link below.

Video: What We Do

4 Supply Chain Issues That Are Hugely Costing Your Business

Managing your supply chain is a part of your everyday business. What some professionals don’t know is that there are hidden costs in your processes that often go unaccounted for, and can result in your business losing track of your actual costs.

Free Shipping

In this day and age, free shipping is an expectation of customers. But as shippers, we understand that there’s no such thing as free shipping.

Not surprisingly, larger retailers, like Amazon and Wal-Mart, can offer free shipping easier than smaller retailers. The Wall Street Journal reported that Amazon spends an estimated $4-5 per package while an average business can spend around $7-8 for ground delivery.

Consequently, smaller businesses are struggling to meet free shipping expectations while maintaining margins. Most companies seem to be simply eating the cost. According to Kurt Salmon, only 10% of online retailers charged a shipping fee during the 2015 peak holiday season. This trend does not seem to be going away anytime soon. As eCommerce continues to grow, free shipping is an expectation, not a luxury.

Supply Chain Efficiency

Damaged Shipments

“Unsaleable” shipments account for an average of .83% of gross sales, according to Deloitte research. Damaged shipments account for about half of unsaleable goods, which can reach as much as $7.5 billion annually.

Causes of damage can be rooted in package design, improperly loaded pallets, poorly applied shrink-wrap, and other additional in-transit factors.

Regardless of the cause, claims processes, potential customer relationship damage, and costs of the product(s) are all costly. To help diminish these potential costs, it is important for shippers to have a plan in place to alert the customer and replace the shipment as quickly as possible.

Regulatory and Compliance Costs

In the past 9 years, the U.S. trucking industry had to adapt to 600 more federal regulations, according to Inbound Logistics. These heavy regulations affect everything from emissions, hours-of-service, to electronic record keeping.

With all these regulations, there are compliance costs incurred. Unsurprisingly, most of these costs are passed along to shippers.

Another hidden cost passed along to shippers is traffic congestion. Forbes Magazine reports, that congestion costs the trucking industry almost $50 billion annually and 728 million hours.

Inefficiencies

It seems like a no-brainer, but inefficiency can be a huge ball and chain to a supply chain. McKinsey & Company examined over 40 companies worldwide and found dozens of “slightly suboptimal processes and the lack of a lean mindset” that were wasting money on inefficient processes.

These inefficiencies include the design of the warehouse. In many cases, warehouses need reconfiguration to meet today’s technology-driven industry. In some cases, companies can save up to 50% of pallet picking time with a simple redesign of their warehouses.

Another inefficiency found was excess packaging costs, stemming from something as simple as small items packed in large boxes filled with packing peanuts.

By understanding and acting upon the hidden costs in your supply chain, your company can better focus on the bottom line of increasing revenue, cutting costs, and maintaining quality.

Click Here for Logistics Management Best Practices White Paper

 

 

The Future of Supply Chain Has Arrived: A Look at the Sentient Supply Chain

A new term to describe a supply chain that is all-seeing, real-time, productive, optimized, and cognitive has recently emerged. The “sentient supply chain” refers to a supply chain that’s nodes communicate 24/7.

This supply chain has been compared to a network of autonomous vehicles by SC professionals. Autonomous vehicles are designed to analyze infinite amounts of real-time data flawlessly while operating. Part of their appeal is also the promise of reduced accidents and more efficiency on the roads. If the world were only comprised of self-driving vehicles, all cars would be communicating with each other in real-time, all the time.

A system of these sentient vehicles wouldn’t just analyze data about risks and actions within its own area, but also in their immediate vicinity. They’d take in the larger view to optimize a route, and this includes looking ahead in time.

iStock-613880008.jpg

If all of these gains were applied to an organization’s supply chain, think of how unstoppable it would be.

Supply chain leaders have spent their life’s work trying to facilitate communication between each node of the supply chain in order to better manage it. Of course, the systems they’ve created have driven value and changed the supply chain for the better, but there is still much room for improvement.

The rise of the omni-channel has pushed businesses’ supply chains to great new limits. Now, more than ever, companies need them to perform like highly intelligent, orchestrated, optimized autonomous systems, like that of self-driving vehicles. Modern supply chains need to be predictive and prescriptive in order to survive in this market.

Traditionalists favor the reactive supply chain. That is, a supply chain where variability is +/- 5 days, service level is 95%, and buffer stock requirements are 10 days.

Innovators stand behind the live supply chain, where variability is +/- 48 hours, service level is 98%, and buffer stock requirements are 5 days.

However, futurists are fully committed to the predictive supply chain. Its variability is the lowest of the three, at +/- 2 hours, so is its service level, at 99.5%, and so is its buffer stock requirement, at 2 days.

When conveyances, suppliers, warehouses, manufacturing facilities, and stores all understand what each other is doing in real-time, what they plan to do and when, what external factors are like, and they have an advanced algorithm-learning machine, you have a sentient supply chain.

You’ve read the word “automation” many times now, but know this: the sentient supply chain does not mean that all actions will be 100% automated. It will still require strict determination of which decisions can be machine-made and which need to be left to the supply chain professionals.

The value of this futuristic business process is in its ability to quickly analyze massive amounts of data in real-time, and to apply advanced algorithms to that data in order to produce wildly intelligent insights. Within the complex global supply chain, humans simply cannot do this.

Sentient supply chains can track the real-time movement of ocean shipments, trucks, n-tier suppliers, even consumer behavior, and more. Though it is early in adoption, its capabilities are undeniable, and futurist supply chain professionals believe it will take the world by storm soon.

Read next: What Supply Chain Efficiency Will Mean in 2020

Download eBook  How Transportation Benefits from Big Data