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From 4 Pain-points to 4 Key-points for Shippers’ Global Supply Chains

Strategy
From 4 Pain-points to 4 Key-points for Shippers’ Global Supply Chains

Technology is for sure a key element to bring enormous advantages to nowadays supply chain, especially with the current post-pandemic scenario.

Based on our research, we were able to discover some interesting insights from companies establishing and implementing new tech-based procedures:

  • Email overload reduction among stakeholders:

As per our calculations, to handle a maritime export shipment from Europe, an average of 11 companies interfere in the “information flow” process with a shipper / exporter. The vast majority of this communication is handled by email (and phone). This creates a massive amount of  circa 180 emails back and forth per booking that could be reduced with technology. 

The advantages? manual tasks reduction that saves costs and, quite importantly, generates structured data to be available for further examination and KPI’s assessment.

  • Data:

Most probably all cargo details, planning forecasts and amendments, order status and vessel ETA/ETD are transferred via email or, to some degree, via external platforms. These data are not structured and it might not be cost-effective to extract these details out of emails with, say, AI devices.

Take a shipper / consignee having extra costs. It could be related to container demurrages, port congestion or haulage cancellation fees and they will probably report these as nonconformities. Companies usually have an internal procedure based on their quality management standards (and subject to further internal and external audits) to  issue  contingency plans to avoid similar cases in the future.

A manual registration will not only jeopardize the clearness and transparency for managers to see the real picture of their supply chains (staff will probably be too focused on the daily operations and idle time is scarce in logistics!); it will also add more time-requiring tasks to the process.

When shippers / consignees include technology to process data, the quality of analytics is highly improved.

  • Productivity Assessment via KPIs:

It is not uncommon to find companies handling their logistics via a comprehensive IT system, i.e.: TMS, ERP, WMS for their daily operations, data processing and audit. These useful tools include capabilities to measure performance and generate KPI’s. Depending on how robust or how flexible these information technology systems are, users can even customize their indicators.

Considering the complexity and fragmentation of Supply Chain departments, there are usually many areas that are considered under the umbrella of Supply Chain: Maritime/Air/Inland/Rail Traffic, Import, Export, Customs, Chartering, Operations, Warehouse Logistics and so on, making the indicators to be affected by several areas with different setups.

Based on our research, our experience tells us that the information flowing from one area to another could be adapted to each area’s priorities. Nonconformities and incidents are subjectively considered important in different levels per area. Hence, as they are registered manually, not all of them are reported, mainly the small ones that theoretically do not affect operations as a whole. The result?: inaccurate KPI’s.

  • Performance of external logistics service providers:

Many companies subcontracting external services for transport and logistics do so on a “spot basis” contract (a rate that is valid for a certain period of time or for a specific voyage) or mid-term / long-term basis, say 3, 6 or 12 months with a slight space protection from carriers…or at least this was the case before the Covid-19 pandemic.

Users confide their cargo to these providers based on pre-established parameters such as total rate, transit time, slot allocation and, more and more, environmental impact and IT solutions related to the transportation service. However, it is difficult for shippers to measure the performance of external logistics companies due to fragmentation. Having a standard procedure and IT systems to harmonize the way transport services are handled, will assure a correct assessment of every carrier’s performance in a customizable way. No more estimations are needed from this point on.

By combining the use of technology along with a reengineering of supply chain processes with an optimization heading,  VUSE Supply Chain has been able to:

  1. Automate booking process via SaaS solutions capable of integrating the information flow from all logistics suppliers and carriers to the shipper’s information system. The result? Going from 180 emails to a few steps.
  2. Offer real-time indicators per area, per logistics provider, per BU, per shipping method and so on, as communications are digitized and data is manageable in an intelligent way. KPI’s are no longer based on biased info and decisions are taken based on real facts and not on averages, industry trends or instincts!
  3. Help shippers avoid future incidents and nonconformities as correction plans are accurate by establishing an automated reporting system. For sure an improvement for quality standards and cost savings.
  4. Provide prescriptive analysis for customers’ supply chains related to routes or providers’ performance and a general assessment of their operations based on real data.

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