With today’s plant technology, manufacturers can control almost everything that happens on the plant floor. However, much is left up to chance when it comes to yo-yoing materials markets.
That’s where supply chain network tracking comes in to play. Bob Farrell, CEO of Kewill, provided expert insight into the importance of transportation and warehouse management that can help manufacturers save money and maintain excellent customer relations no matter the market.
Bridget Bergin: Why is it important for manufacturers to reexamine how they track their supply chain network?
Bob Farrell: Manufacturers must consider upgrading the tools they use to manage their supply chain because customer demand has never been greater than it is today. Customers want deliveries faster and they must be accurate. Manufacturers that can’t compete with speedy, efficient deliveries will simply fall behind the competition.
A manufacturer that has full visibility over the supply chain is more able to mitigate risk. If manufacturers are unable to see exactly where widgets are in the supply chain process, it makes it difficult to dispute issues along the way.
Gaining insight into potential future issues by sharing events and alerts allows businesses and their logistics partners to address an issue either before it occurs or as soon as possible afterwards, and this can be achieved through an integrated supply chain execution platform with visibility capabilities.
BB: What are some supply chain and transportation obstacles faced by manufacturers?
BF: Top challenges manufacturers face include:
Cost Management: Supply chain managers often lack the visibility into their total spend across Parcel and LTL shipping, and carrier invoices are difficult to manage due to a variety of factors, including disparity among carriers and file formats.
Market Volatility: Whether it’s quickly automating a new customer’s routing guide or adjusting shipping service selections due to a weather event, it is critical for organizations today to quickly adapt to changing customer requirements and market conditions while still maintaining committed customer service levels.
Remaining Compliant: In order to ensure compliance with U.S. government regulations, organizations must file documentation electronically with the U.S. Customs and Border Protection for all shipments entering the U.S. This can be a lengthy process, and users who do not have the tools to file inbound or outbound shipments electronically will fall behind competitors who are able to spend time on innovation and customer service instead of paperwork.
BB: How can manufacturers improve customer service and profitability despite these challenges?
BF: There are several ways for manufacturers to combat these challenges including:
Cost Management: Organizations need to understand variances between anticipated costs and actual carrier invoice costs. This allows them to manage expenses through a controlled and organized process. It gives customers a better idea of what they will be paying to ship products, and also saves manufactures time and money wasted on back-tracking when there is a discrepancy between anticipated costs and actual carrier invoice costs.
Market Volatility: In order to keep costs down, logistics users must be able to quickly configure, test and deploy shipping business rules with no IT involvement, delivering businesses a significant time to production advantage. This also improves customer service because manufacturers are able to quickly resolve any issues that affect all stakeholders, including customers.
Remaining Compliant: Users who do not have the tools to file inbound or outbound shipments electronically will fall behind competitors who are able to spend time increasing bottom line through innovation instead of doing paperwork. If customers are consistently not receiving products on time due to compliance issues they will choose another vendor to work with in the future.
BB: What can manufacturers do to offset changing costs and availability of materials?
BF: To stay ahead, manufacturers can:
Increase Visibility: The ability to execute an order efficiently and effectively, with an ever-greater emphasis on fulfillment speed, is almost impossible to deliver without accurate visibility—from visibility of inventory at point of order through to shipment visibility throughout the fulfillment cycle and back, if and when returns are made. This heightened importance of visibility is causing headaches for CIOs throughout the supply chain, as to deliver on this (and to ensure goods are delivered to schedule), relies on all supply chain partners having that visibility and being able to share it in real-time.
Upgrade Legacy IT Systems: These systems can hold companies back from significant gains in efficiency, productivity and visibility of their supply chains. The newest systems are more flexible and scalable than older systems. With moves to the Cloud bringing a wealth of benefits in terms of rapid deployment and much easier integration with internal systems and partners and offering easy access for even the smallest supplier, regardless of their geographic location. Newer systems, especially those deployed in a Cloud environment are not constrained by these limitations and allow the business to be more responsive to changing trends.
BB: What are some solutions to mitigate operations costs?
BF: One area that is overrun with inefficiency that is often overlooked is inbound transportation management. This occurs when companies take control of inbound freight from suppliers by consolidating loads, planning continuous moves and negotiating with carriers directly instead of paying for whatever shipping services the supplier chooses. Known as freight collect, the buyer owns the carrier relationship and is responsible for shipment planning, tendering and payments. Eliminating inefficiencies, automating processes and gaining greater visibility and control across the inbound transportation management function can offer huge opportunities for cost savings – up to tens of millions of dollars a year.