Globalization of the world economy and our supply chains has advanced at an almost unbelievable speed. Growth in world trade, and corresponding cargo container movements, continues to substantially exceed overall economic growth, meaning that trade volumes are doubling every 5-7 years. Here are five tips that can save your logistics assets.
1. Total Delivered Cost Management
Total Delivered Cost Management involves the ability to analyze and predict the total supply chain costs from the source of supply to its final point of distribution. It includes the capability to roll up both international and domestic logistics costs by product and delivery route, plus the ability to accurately calculate all the applicable duty, tariffs and other customs-related costs while factoring in any preferential trade agreements. More advanced capabilities would include the ability to model and estimate inventory levels and total carrying costs.
2. Logistics Process Automation
In general, few companies have well automated logistics processes. As a result, there are still many manual steps in most organizations. Logistics leaders have deployed technology that greatly automates many of these manual booking processes, managing transportation carriers, rates, and execution in a single environment. The ultimate goal in global logistics execution: “one touch” information flow for all activities.
What is supply chain visibility? It starts with the ability to answer very basic questions: Where is it? When will it arrive? Is the expected date different from the planned date?
Event management/notification plays a key role, since the amount of data generated means that the only manageable approach is to have systems that proactively identify exceptions to the plan. In their most basic form, visibility tools enable a company to define a schedule for all of the activities within a particular move, with configurable tolerances. If an activity or milestone is not completed within the scheduled time, or no information is received when expected, an alert is sent via any of numerous mechanisms (email, page, etc.) notifying both the impacted party (e.g. the importer) and others (e.g., a freight forwarder) of the problem.
4. Supplier Portals and ASN Capabilities
Most companies today are not well integrated with overseas suppliers, and many still receive information about what is on incoming shipments via fax or other manual methods.
Many companies are providing suppliers with web-based tools that enable them to execute a growing list of processes. Logistic leaders reduce the time and cost of inbound processing by enabling their suppliers to produce ASNs and properly label the goods. They also minimize inventory and stocks outs through better visibility to actual order status at offshore production sites.