Supply Chain Brain
Sponsored by BlueGrace Logistics
September 15, 2022
Managed Logistics Meets Five Challenges for Complex Supply Chain Operations
Supply Chain Brain
Whatever the business — from fast-moving consumer goods to pharmaceuticals or automotive — the success of any enterprise is the result of its vertical market expertise.
Ever-changing supply chain complexities can be a significant distraction from core market focus. They can make or break a business, which is why they require the dedicated focus of a managed logistics provider (MLP).
A provider with the breadth of capabilities, depth of experience, and backed by powerful technology can do more than simply track supply chain operations. An expert MLP will fully understand customers’ needs and provide innovative solutions.
In searching for a provider, here are five tactical challenges that any MLP must meet.
1. Network Optimization
Poorly optimized networks can have many undesirable outcomes, including loss of customers, runaway freight and labor costs, and siloed — rather than integrated — supply chain management.
Engagement with the right MLP should be focused on developing a strong strategic approach and supported by expertise that may not be found in house.
It’s important to look for a logistics partner that’s committed to complete visibility all through its process, so that teams can understand how their cooperation will result in success.
Key stakeholders should be prepared to fully share relevant data and detailed customer-expectation information. In turn, the chosen MLP must be prepared to assist with methods to capture the data, be familiar with internal systems, provide options and work collaboratively with the company’s teams.
Businesses should expect meaningful insights for the optimization of the network. For example, if a focus on customer service has resulted in shipments that are too small for optimized handling, the right provider should have ideas for a hierarchy of batching decisions that will both protect the company’s reputation with customers and create new efficiencies.
2. Orders, Shipments and Load Planning
As supply chains become more complex, it is increasingly difficult for shippers to effectively manage orders, shipments and load planning with internal resources.
A managed logistics provider, by contrast, develops processes that draw on a much broader experience across a variety of supply chain challenges and solutions.
The selected provider should be able to provide an audit that examines all available data to optimize order, shipments and load planning as an integrated process. It should identify end-customer requirements, business and sales goals, shipment sizes and weights, origin and destination pairs, must-arrive-by dates and how orders are processed and received.
Once these factors are understood, real-time mode and routing decisions can be made, as opposed to relying on past experience to make educated guesses when it’s time to drop shipments. For example, opportunities will be quickly apparent to combine multiple less-than-truckload (LTL) shipments into more efficient truckloads, or when to make a shift from straight truck to lower-cost intermodal service.
3. Inbound Programs
When facilities are receiving a range of raw materials and components from multiple vendors, the complexities of inbound shipping can quickly derail the best production and distribution process.
Successful inbound programs start with a good vendor routing guide. The MLP will initially assess this, and work with the company to make needed improvements — but that’s just where its responsibility starts. Equally important is to monitor and assure vendor compliance.
Once vendors have been aligned within company requirements, new opportunities for more efficient inbound programs will arise. A cluster of vendors, for example, can be coordinated to pool their LTL shipments to an intermediate distribution point where truckload volumes can be created.
These improvements will reduce costs, support sustainability objectives and provide a more predictable flow of inbound goods to production and distribution sites.
4. Payments and Claims Resolution
If not standardized, payments processing and claims resolutions can negatively impact the bottom line. Internal management of ad hoc methods is time consuming and distracting from core business operations.
Improvement of the payments process starts with a freight audit by the MLP. With advanced systems, this can be almost fully automated, greatly speeding the processing of payments and quickly identifying variances. This will also facilitate the creation of a more efficient, standardized payment process.
Claims for damaged, lost or delayed shipments can be both contentious and time-consuming. Much of this can be resolved through an analysis of claims trends across the vendor network. Managed logistics providers should be expected to have the capabilities to find those vendors who are most often out of compliance — or who are most difficult to deal with — creating opportunities for more effective and faster negotiations.
5. Data Visibility and Reporting
Each business needs a complete picture of its supply chain operations in order to effectively manage them. Ultimately, the selection of a great managed logistics provider will yield significant improvements in data visibility and reporting.
Ideally, an application program interface (API) with the provider will permit the fastest and most complete exchange of data and presentation in dashboards and reports.
Even without API capabilities, the provider should be able to work effectively via enterprise resource planning (ERP), an SQL server, flat files, Excel spreadsheets and the like. It’s important that it has the ability to get started with the company’s internal systems and then provide guidance to move to more effective systems, if needed.
The output, in the form of meaningful key performance indicators and other measures, can then be processed with business intelligence systems to initiate a value-stream mapping process, leading toward better decisions that will improve customer service and retention, bottom line results, and additional goals specific to each enterprise.
Supply Chain Savings and Simplicity with BlueGrace
When companies want superior supply chain management services and best-in-class technology, they turn to BlueGrace. Why? Our progressive approach to transportation management helps customers of all sizes drive savings and simplicity into their supply chains.
But that’s only part of the story, because your success doesn’t depend on shipments and deliveries alone. To thrive, it needs dependable relationships between customers, carriers and logistics experts. When BlueGrace was founded in 2009, even the top logistics firms were overlooking the true heart of their job. So we built a company that puts our people and customers before profit. The proof of that is evident in our core values, our caring culture, our community engagement, and in the heartfelt testimonials from our customers.
BlueGrace is an award-winning, full-service managed logistics provider that helps businesses control their freight spend through industry leading technology with a large network of established carriers to customers across the country. More than that, what really sets us apart is our passion to support your success in the complex $750 billion U.S. freight industry.
This captures the true heart of BlueGrace — our secret sauce, if you will. We’re the 3PL that brings Tender Loving Care to all our freight services, from less than truckload and truckload to our transportation-management services. Our customers know that our team goes all-in all the time on the custom shipping options they need.