Home Editors' Picks Five ways an efficient supply chain and logistics management system can boost...
Five ways an efficient supply chain and logistics management system can boost business
By Soham Chokshi, CEO and Co-Founder – Shipsy
THE efficiency of supply chain and logistics systems can make or break a business. A small challenge can trigger a wildfire of inefficiencies. For instance, a store has run out of a specific product and has placed a replenishment order. However, the store was notified that the supplier could not deliver the order due to production delays. Without a backup plan and foresight, the product’s availability will be highly dependent on this sole supplier, leading to delays and impacting the consumer experience. With no guarantees on when the product will be made available, customers will look for alternatives or purchase the item elsewhere. Brands are also likely to lose these customers permanently.
Most recently, the global supply chain has gone through massive delays in the movement of goods due to the pandemic. According to the United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP) 2021 trade report, 73% of the respondents have encountered significant delays from the supply side due to widespread factory closures, illness, loss of talent and skills, as well as disruption on the transportation network. In Southeast Asia, for instance, container vessels may have to wait five to seven days from a maximum of two days to unload shipments in Singapore due to port, depot, and warehouse congestion.
The gaps in supply chain and logistics highlighted due to the pandemic point toward the need for building resilient, agile, and customer-centric supply chains. Here are some critical ways supply chain and logistics management technologies can boost business outcomes:
IMPROVING LOGISTICS TRANSPARENCY
The supply chain industry runs on thin margins. Any logistical delays can cascade the supply chain process. Thereby having complete visibility over goods movement is crucial. To strengthen their supply chains, businesses need to know where their goods are at any given time. They should also be able to track the product down from point A to B.
Innovative logistics management tools empower businesses with granular-level visibility to boost delivery productivity by eliminating idle times, unnecessary route diversions, unprecedented stoppages, etc. Predictive analytics and advanced reporting help companies gain advanced visibility into seasonal peaks, changing shipping demands, transportation issues, etc., dealing with delays, exceptions, and exigencies.
ENHANCING COLLABORATION ACROSS SUPPLY CHAIN STAKEHOLDERS
For decades, manual processes and siloed systems have challenged the supply chain and logistics processes by hindering timely and efficient data sharing. This lack of visibility results in data inconsistencies and leads to inaccurate decision making. Moreover, it also impacts the timely resolution of exceptions and emergencies.
Advanced logistics management platform update delivery stakeholders with real-time shipment information. It expedites resolution by alerting senior management on delivery exigencies. Such a platform enhances decision making, reduces delivery latency, and significantly improves accountability, thereby, saving 34% in incidental costs.
BOOSTING CUSTOMER EXPERIENCE
One negative experience is enough for customers to leave a brand they love. Rising cross-border e-commerce and intensifying competition are rapidly shifting customers’ delivery expectations. For instance, 69% of Singapore Millennials made cross-border purchases in 2020, and the country had the highest percentage of online cross-border purchases in the Asia-Pacific. Free (65%) and fast (49%) shipping were the top drivers of these online purchases. While speed is critical to boosting customer satisfaction, promising faster delivery SLAs without ensuring product availability affects business reputation and customer loyalty.
Ensuring inventory fidelity is critical to boosting customer experience. Smart logistics management tools allow businesses to quickly partner with the most reliable logistics partner to meet stock replenishment needs to increase on-time deliveries by 24%. Such tools also keep the customers notified about where their order is, who will be delivering it, what’s the exact ETA, should they expect delays, and more at any given time. These tools also ensure that customers can change delivery location and time on the fly and drive flexible payment options.
As much as 53% of the shipping costs are incurred in the last mile, making it the most expensive leg of logistics operations. Inefficiencies, such as poor route selection, lack of ground-level visibility, and poor capacity planning challenges businesses to bring logistical costs down.
AI and ML-powered logistics management tools allow businesses to chart out the most cost-efficient route to the customer location to reduce last-mile delivery costs by 12%. Such tools automate delivery operations, shrink investments in manual effort, optimize fuel consumption, reduce the distance traveled, eliminate empty miles, optimize capacity utilization, and more. All these pockets of optimization lessen the total cost of ownership incurred while executing logistics operations.
MEETING SUSTAINABILITY GOALS
Environmentalism is becoming mainstream. Going by numbers, 57% of consumers are willing to change their purchasing habits to reduce negative environmental impact. Customers are spearheading the need to ensure an eco-friendly supply chain and logistics operations.
Moving ahead, customers are likely to favor brands that embrace solutions to lower their carbon footprint. Businesses will need to optimize their first, middle, and last-mile operations to achieve this.
They must focus on reducing the distance traveled, increasing first-attempt success, eliminating empty miles, decreasing trip volumes, planning multi pickup and drop delivery routes, lowering fuel consumption, and improving resource and capacity utilization. Smart logistics management tools drive sustainable logistics operations by curbing distance traveled by 5% and decreasing trip volumes by 6%.
With growing global trade volumes, the supply chain and logistics complexities will increase. Going forward, new-age logistics technology platforms will play an instrumental role in ensuring transparency in logistics processes to boost customer experience, sustainability, and overall operational productivity.
Soham Chokshi is the CEO and Co-Founder – Shipsy