A quick scroll through LinkedIn presents many supply chain experts. Experts who claim to have the ideal solution for supply chain planning. Unfortunately, what might work for one company may not be feasible for another. What works in the OEM industry might not work for retail. The demands of customers and clients, restrictions and tariffs at the final destination, and the availability of materials from vendors makes planning complex. Therefore, every company must prepare diligently to build a solution that works for the reality of their business.
While there are plenty of quick tweaks that will boost your efficiency, a genuinely excellent supply chain is one built on the analysis of data and careful preparation. Our list of 11 ideas for supply chain planning in the new year will give you a substantial arsenal of ways to optimize your logistics spend.
But enough pontificating like the “experts,” let’s jump into it!
Specific Ways to Build a Better Supply Chain
We’re sorry to say there is no “silver bullet” for building a robust logistics solution. However, we can recommend a few specific ideas and products you can introduce this year to make your supply chain run more smoothly.
1. Build your carrier and partner list
The capacity shortage is real. This past year saw record increases for over-the-road trucking prices. No matter the origin and destination of your goods these rising prices will affect your bottom line.
So what can you do? If you are a medium to large business with a small approved carrier list, we recommend expanding your business’s current carrier pool. More potential carriers for your spot quote business means you might win some savings with regimented persistence.
If your current carrier pool is already substantial, this might not be the solution for you. Adding even more email chains, phone conversations and complex bidding processes will increase worker hours. So unless your company has a bottomless well of funds (read: almost no one) for personnel, you will want to consider our next idea.
2. Focus on finding a single-source provider
Remove bloat and become leaner. We all want to lose a couple of pounds after the holiday season; perhaps it is time to trim a little of the administrative fat from your supply chain. A single-source provider offers several critical advantages for your company.
The first advantage is lower costs. No matter the size of your company there are serious cost benefits to partnering with a single-source logistics provider. When you have a single company handling your capacity they’ll be able to negotiate lower rates for ocean freight, over-the-road transportation, and air freight.
Plus, you’ll have a simplified chain of communication that cuts down on personnel hours and reduces the potential for missed pick-ups and deliveries. Working with a single-source provider will give you access to an entire team of logistics experts. So not only will your costs go down, you’ll have more efficient management of your supply chain.
3. Optimize lower volume lanes
In our post on how Direct Service to Hawaii Will Help Your Supply Chain, we discussed how optimizing lower volume lanes is a great way to boost the overall health of your solution. By focusing on the “low hanging” fruit of fixing your non-major lanes, you’ll be setting your company up for great success in the new year.
4. Give air freight a shot
We know. We hear you. Air freight is too expensive! We’re here to tell you that it’s not. While we don’t recommend shifting from over-the-road and ocean freight to an all air freight supply chain, having a consistent schedule for high value and hot items help in a couple of ways.
By committing a steady volume of freight to a trusted air freight partner, you’ll gain access to low consolidation prices. Allocating just 250 lbs per week can mean extreme savings on air freight solutions.
Plus, you’ll have the added benefit of delighting your customers. Like it or not, the on-demand generation has control of the marketplace. When customers expect products to be available, it is essential to find a way to keep your shelves stocked and your inventory full. Air freight gives you the flexibility to bolster your stock count of hot items and satisfy your customers’ demands.
While the amount of air freight your company ships should be dependent on the reality of your business, there is a place for air freight in most supply chains.
5. Take advantage of consolidations for ocean freight
Much like the savings found in air freight consolidations, ocean freight consolidations allow businesses to cut transportation costs. You can take advantage of the combined volume of a transportation provider. To find out how ocean freight consolidations work, check out our post on The Hidden Benefits of LCL Freight Shipping here.
6. Explore new markets with a trusted provider
Thinking of opening a location in Hawaii? Guam? Alaska or somewhere outside of the United States? It’s best to consult with a trusted supply chain solutions provider early in the planning process. Understanding your landed costs will help you decide if it is economically feasible to build a brick and mortar site in Honolulu, Hagatna or Helsinki.
If your current provider only offers service to the lower 48, you’ll want to start looking for a global solution. Check out our list of resources for international shippers here. It’s a great jumping-off point for anyone new to the international market.
Always Relevant Best Practices
Hopefully, you’ve found 1, 2 or 6 ways to plan your supply chain in 2019. Once you have your plan, you’ll want to adopt these best practices for continual growth and optimization throughout the year.
7. Always analyze
In the world of supply chain management data is king. Having a plan in place to collect information is the first step in a proper analysis of effectiveness. Work with your transportation provider to establish KPIs and consistent delivery of reports for your team to review.
Planning your supply chain isn’t just about how many containers, pallets or air freight LD3s you’ll need. It’s about understanding how each link works with the next. Having full visibility of each link will help you identify problem areas, making your planning process for next year much more manageable.
8. Truly understand your customer
What are their needs, wants, desires and expectations? For instance, the needs of retail customers will be much different from those of a construction supply company.
If the demand for your product is project-based you’ll need to consider this when planning. What are the pain points of your customers and how can your supply chain solve the perpetual problems of their field? In an ideal scenario, you’ll already know your customers. However, a great supply chain partner can offer insight into what has worked for other companies like yours. Finding a provider with a diverse client base will give you access to invaluable (and real!) data to inform the creation of your solution.
9. Be open to change
For supply chains, stagnation is a threat. What worked eight years ago might be outdated and obsolete in 2019. If it has been a while since your last supply chain check-up, start the year off with a full survey of your solution. Advancements in technology, shifts in prices, and amendments to regulations mean your current solution isn’t effective. Change is hard for most people. For effective supply chain planning, you’ll need buy-in from your team. Find a few unflappable champions for the cause and begin the painful process of eliminating old ineffective procedures.
10. Establish realistic business goals
We all want to crush our goals in the new year. However, setting realistic expectations at the outset will give you a better understanding of “what is” or “what isn’t” working. If you commit to lofty goals, it is difficult to pinpoint the weak links in the supply chain. However, if you introduce small changes and modest goals, your year-end review will provide much more valuable insight.
Ultimately, everything decision you make during your supply chain planning should align with the goals you set as a business. Want to increase revenue without raising prices? Look to your supply chain. Need to reduce the necessary lead time for order fulfillment? Look to your supply chain. Want to build a more loyal customer base? Look to your supply chain.
11. Be “Ok” with not hitting goals
Failure will happen. No matter how much data you cull, spreadsheets you prepare, or great ideas you introduce, supply chain plans are just educated guesses.
There is no innovation and creativity without failure. Period.
That isn’t a green light to go wild and start sending single screwdrivers for a solo ride in 40′ containers. However, giving yourself the freedom to fail will allow you to find the best solution possible. Although the risk should never outweigh the potential success, you need to be “ok” with not hitting your goals.
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