Managed Logistics Addresses Five Challenges for Complex Supply Chain Operations
Whatever the business – from fast-moving consumer goods to pharmaceuticals or automobiles – the success of any business is a result of its vertical market expertise.
The ever-changing complexity of the supply chain can significantly distract attention from the core market. They can make or break a business, which is why they require the dedicated attention of a managed logistics provider (MLP).
A supplier with broad capabilities, deep experience, and backed by powerful technology can do more than just track supply chain operations. An expert MLP will fully understand customer needs and provide innovative solutions.
In finding a vendor, here are five tactical challenges every MLP must overcome.
Network optimization. Poorly optimized networks can have many undesirable results, including lost customers, uncontrollable freight and labor costs, and siled rather than integrated supply chain management.
Engagement with the right MLP should be focused on developing a strong strategic approach and backed by expertise that may not be found in-house.
It is important to seek out a logistics partner that is committed to providing full visibility throughout their process, so teams can understand how their cooperation will lead to success.
Key stakeholders should be prepared to fully share relevant data and detailed information about customer expectations. In turn, the chosen MLP should be prepared to help with data capture methods, familiarize themselves with internal systems, provide options, and work collaboratively with business teams.
Companies should expect meaningful insights for network optimization. For example, if an emphasis on customer service has resulted in shipments that are too small for optimized handling, the right supplier should have ideas for a batch decision hierarchy that will both protect the company’s reputation with customers and create new efficiencies.
Orders, shipments and load planning. As supply chains become more complex, it is increasingly difficult for shippers to effectively manage ordering, shipping and load planning with internal resources.
A managed logistics provider, on the other hand, develops processes that draw on much broader experience across a variety of supply chain challenges and solutions.
The selected supplier must be able to provide an audit that reviews all available data to optimize ordering, shipping and loading planning as an integrated process. It should identify end customer requirements, business and sales objectives, size and weight of shipments, origin and destination pairs, arrival deadlines, and how orders are processed and received.
Once these factors are understood, real-time mode and routing decisions can be made, instead of relying on past experience to make educated guesses when it’s time to drop off shipments. For example, opportunities will quickly arise for combining multiple LTL shipments into more efficient truckloads, or when switching from a single truck to a lower cost intermodal service.
Incoming programs. When facilities receive an array 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. MLP will initially assess this and work with the business to make any necessary improvements — but that is where his responsibility begins. Equally important is monitoring and ensuring supplier compliance.
Once vendors are aligned with business requirements, new opportunities for more effective inbound programs will arise. A group of suppliers, for example, can be coordinated to aggregate their LTL shipments to an intermediate distribution point where truckload volumes can be created.
These improvements will reduce costs, support sustainability goals and provide a more predictable flow of incoming goods to production and distribution sites.
Payments and Settlement of Claims. If not standardized, payment processing and complaint resolution can negatively impact results. IInternal management of ad hoc methods is time consuming and distracts from core business operations.
Improving the payment process starts with an MLP freight audit. With advanced systems, this can be almost fully automated, dramatically speeding up payment processing and quickly identifying discrepancies. It will also facilitate the creation of a more efficient and standardized payment process.
Claims for damaged, lost, or delayed shipments can be both contentious and time-consuming. Much of this problem can be resolved through analysis of complaint trends across the provider network. Managed logistics service providers need to be able to find the suppliers that are out of compliance the most often – or with whom they are the most difficult to deal with – creating opportunities for more efficient and faster negotiations.
Data visibility and reporting. Every business needs a complete picture of its supply chain operations in order to manage them effectively. Ultimately, selecting an excellent managed logistics provider will lead to significant improvements in data visibility and reporting.
Ideally, an application program interface (API) with the vendor will enable the fastest and most comprehensive data exchange and presentation in dashboards and reports.
Even without API functionality, the vendor must be able to work efficiently through enterprise resource planning (ERP), SQL server, flat files, Excel spreadsheets, and more. It is important that he has the ability to start with the company’s internal systems and then provide advice to move to more efficient systems, if necessary.
The output, in the form of meaningful KPIs and other metrics, can then be processed with business intelligence systems to initiate a value stream mapping process, leading to better decisions that improve customer service and retention, bottom line results, and other company-specific goals.
Supply Chain Savings and Simplicity with BlueGrace
When businesses want superior supply chain management services and cutting-edge technology, they turn to BlueGrace. Why? Our phased approach to transportation management helps customers of all sizes save money and simplify their supply chains.
But that’s only part of the story, because your success isn’t just about shipments and deliveries. To thrive, it needs reliable relationships between customers, carriers and logistics experts. When BlueGrace was founded in 2009, even the biggest logistics companies were unaware of the true core of their work. So we’ve built a business that puts our employees and customers before profit. The proof is evident in our core values, caring culture, community involvement, and honest customer testimonials.
BlueGrace is an award-winning, full-service managed logistics provider that helps businesses control their freight spend through industry-leading technology with an extensive network of established carriers for customers across the country. More than that, what really sets us apart is our passion for supporting your success in the complex US$750 billion freight industry.
This captures the true heart of BlueGrace – our secret sauce, if you will. We are the 3PL that brings Tender Loving Care to all of our freight services, from less than a truckload and a truckload to our transportation management services. Our customers know that our team goes out of their way to find the custom shipping options they need.