159 Expert Tips to AMP Your Supply Chain
The internet, cloud-based systems, mobile devices, and the Internet of Things have already improved logistics and supply chains. Use these tips to better manage your digital transformation.
1. Digital strategy begins with visibility expectations. Begin by defining what visibility means to you and your end users/customers/suppliers, what kind of experience you want them to have, and what you want to gain from increased visibility.
2. Pay more attention to digital feeding and cleaning. A digital strategy needs good models of both internal (customers) and external (suppliers) data flow. Decisions are only as good as the incoming data and the models that process that data. Set high standards on the data flowing through your systems. The #1 reason people lose trust in systems is a lack of confidence in the data.
3. Develop a collaborative ecosystem. Today’s new digital environment requires a collaborative approach to managing your supply chain. Developing an extended ecosystem that brings the best of all your partners’ capabilities into a shared, technology agnostic environment is vital. Assuming you can develop and own all these capabilities offers a false sense of security.
4. Share more data with partners to solidify relationships. Be transparent with customers about their shipments by offering greater visibility regarding estimated delivery windows, location, and status. This allows you to reduce uncertainty, manage customer expectations, and find ways to improve the process together.
5. Don’t lock your digital system into today’s solution. Solving current pain points is tempting, but focus on the ability to flex up or down, quickly adjust, and accelerate the development of new capabilities. Look into Enterprise Integration Platform principles that allow companies to easily integrate, regardless of the various execution systems in play.
6. Implement a visibility-enabled IT application. Your IT team should deliver a cloud-based, user-friendly tool that pulls all the KPIs, production data, and timestamps out of your various sub-systems. Create a single metrics repository that provides visibility to every pallet or case move with real-time inventory positioning.
7. Data needs to have a long-term plan, but also requires experimentation. Data is not worth collecting without a clear plan. It’s important to establish key performance indicators, implement specific goals, and identify what you need to accomplish. Sometimes the plan is a clear experiment to see what new capabilities the data can provide, but have a plan for evaluating its value and when to stop collecting data if it is not providing enough value.
8. Develop an Industrial Internet of Things (IIoT) strategy. Start implementing IIoT processes and technology—including sensors on pallets, storage units, and assets—to track locations, positions, and conditions of products and resources. Identify critical processes and resources as the best candidates for pilot projects and learn how to scale up quickly to meet growing customer expectations.
9. Feed your instincts as a kind of data. Although digital strategy most often provides a flood of quantifiable data, make sure you include non-quantifiable information, such as what you may be hearing throughout the industry and your gut instincts with what you see in the data.
10. Blockchain is primarily about customer trust along the chain. Understand the players in the chain. The value of blockchain is proportional to participation across the industry, both horizontal and vertical. Using perishable foods as an example, each of the supplying farms, manufacturers, shippers, warehouses, and stores must be on board and willing to foot the updated workflow costs.
11. Use social network data to check on the chain. Check the reputation of vendors and potential supply chain partners by capturing customer experiences of other users across social networks. Tap into social media to get to know customers and partners more intimately and share successes. Building that relationship increases effectiveness and retention, and promotes cross-sell opportunities.
12. Blockchain’s potential also lies in time saved. Goods can sit in port clearance anywhere from one to seven days. Blockchain can decrease this to hours, with a guaranteed clearance date. This reduces time to sell and enables more reliable just-in-time delivery and reductions of “just in case” inventory. Goods often get stuck in clearance due to incomplete or missing documentation. Blockchain creates a digital trail that can be fixed or recreated seamlessly at any point in transit.
13. Focus on flow of data to decision makers for real-time transparency. The frequency and size of data exchange is dramatically increasing at an accelerated rate. Being able to leverage this data in real time is imperative, but must focus on understanding what data is most critical to solving key business problems, what it means, who needs to know and have a shared understanding of it, and what to do when exceptions occur.
14. Plan how to feed your analysis tools with data. It is critical to automate the feeds from your warehouse, transportation, and order management systems into a data model and repository upon which future tools can be fed. The data warehouse should provide historical line-level information with the ability to analyze what-if scenarios.
Investments in transportation, warehouse, and yard management systems have a huge effect on your operations. Use these tips to help you find, select, install, and implement the “XMS” family of applications.
15. Minimize customization to the system’s core functions. From the onset, do everything possible to minimize customizations, especially to the system’s core areas. Fewer customizations means less time, cost, and risk upfront, plus better support and easier upgrades in the long run.
16. Apply scoring value to individual usability and mobility. Is the system easy to configure and personalize or does it require complex scripting or coding? Does it offer robust reporting, dashboards, intuitive user interfaces, and data visualizations? A first-rate WMS, TMS or YMS should also include mobile apps that allow management personnel to use it while on the move without having to access multiple pages or apps.
17. Plan for change, particularly peaks, growth, and expansion of products and services. Forecast your growth and volumes for the next several years and plan ahead. Make sure your systems can handle future sites, users, SKUs, channels, and order volumes.
18. Lead with a strong Return on Investment (ROI) analysis. A solid ROI is key to getting your project approved. A YMS, for instance, will increase yard driver productivity, improve trailer utilization, and generally augment your site’s throughput. Start by defining your operational costs in these key areas to estimate the potential returns.
19. Know what you need and quantify what it means to your team. Document and refine your functional and technical requirements, plans, and integration needs. Before you meet with external parties, assign a team-agreed weight to each group or bundle on your list to start constructing a decision-making framework. Now you can cut through individual team member emotions or needs.
20. Look for pre-integration of significant value additions. Some WMS solutions offer functional capabilities such as labor management, supplier connectivity, and retail store management, which can help identify material benefits and ROI. Pre-integrated modules on a common platform can be implemented with less time and effort. From EDI to trailer tracking and beyond, look for a TMS that integrates with complementary tools and services that meet your unique business needs.
21. Ensure interfacing capabilities. Each system should have an open architecture and be able to interface with your enterprise resource planning system without incurring excessive customization costs. The WMS in particular must be able to integrate with TMS and YMS plus the Warehouse Control Systems (WCS) interfacing with materials handling equipment to improve warehouse efficiency.
22. Verify the technology roadmap and mobile capabilities. When evaluating potential vendors, examine their product roadmap, such as their mobile strategy. Does the vendor leverage common operating systems such as Android or iOS? Is the application a true web application or does it use terminal server technology? These factors will affect not only the longevity of your solution but also its usability.
23. Cloud or on-premise system is a big vendor filter. This decision could limit your vendor choices because many vendors sell their solutions as cloud only. With your IT department’s current workload, what is the most effective role for them to play to maximize benefit to your enterprise?
24. Assemble a cross-functional team. Any management system selection, implementation, and support lifecycle affects many people. There are facility, change management and training, transportation, IT/technology, supplier, customer, customer support, e-commerce, multi-site, and labor impacts. Consider including third-party experts. During implementation, testing, and initial operations, the company’s teams should continue working together to ensure a smooth process.
25. Be more customer-inclusive. Remember that these tools are also for your customers’ value. Add system selection weight to tools that provide timely and accurate customer communication and access. Look for options with a secure, online portal where customers can view load status in real time.
26. Yard management might initially just need better appointment scheduling. Vehicle congestion often causes yard problems. Planning the optimal arrival of vehicles to maximize yard throughput can reduce the requirements of a full YMS—to the point of eliminating immediate need.
27. Don’t forget the value of support. Support is critical. It is important to select an IT vendor that offers a clear plan for responsive customer service and enough resources to provide multiple levels of ongoing support (chat, remote monitoring and service, and onsite emergency capabilities).
28. Spec out a scalable and reconfigurable system. Over time, business requirements change and the system must be able to flex with your shifting needs. Don’t pay for more features than you currently need to run your business, but look for systems that offer a building block or modular approach, enabling you to scale and add functionalities when it makes sense. Ensure the system you choose is adaptable. Configuration, not modification, is the key to success.
29. Make your warehouse more organized and visual. Clearly label all locations, aisles and areas. Keep storage areas clean and organized. Less time searching and more time picking orders and replenishing items make for a more productive and successful warehouse. In addition to labeling, store inventory on shelves with tilted trays or knuckled tracks to present products to pickers. Allowing them to see what they’re picking eliminates errors.
Take your warehouse or distribution center to the next level by using these practical ideas for layout, lift trucks, loading docks, peak seasons, and automation.
30. Reduce travel time in the front lines of the warehouse. Bring goods to pickers and packers using conveyors or sortation units. Travel time takes away from picking orders so the fewer touches and less travel needed to complete an order the better. Also combine picking of orders into a single travel to a location to reduce the time it takes to fulfill each order.
31. Have a plan for spills and a culture of action. Small spills or leaks can lead to major slips and disruptions. If something spills or leaks on your loading dock or trailers, get it cleaned and dried immediately—even if you have to interrupt activities. If you’re unable to address the spill immediately, mark off the area and put up warning cones or signs.
32. Think out of the warehouse box by remembering safety in the yard. Pedestrians who work in your truck yard should wear high-visibility colors, avoid trucks’ blind spots, and refrain from using cellphones or headphones while they’re working outside. Other useful practices include yard cleaning only during daylight hours and working in two-person teams during busy periods.
33. Know weight and dimensions to slot SKUs intelligently. Get accurate information on SKU weights and sizes, plus order frequency and sizes to slot storage locations intelligently. Re-slot often to keep items in the optimal location.
34. Separate pedestrian and forklift traffic. Signs and painted lines help, but aren’t enough. Physical barriers, both permanent and temporary, keep pedestrian and forklift traffic apart. OSHA estimates about 110,000 forklift accidents occur each year, many involving pedestrians.
35. Make storage more flexible and reconfigurable. Product mix and volume changes are reality. Using modular racks that can scale to fit your warehouse configuration minimizes wasted space. Plus, if you use racks that can be easily adjusted to product mix changes, you can reconfigure them to use with different products, which saves money.
36. Create accurate maintenance timing and budgets. Good data on maintenance makes it easier to determine how much you spend per hour on repairs and routine maintenance. You can also forecast production peaks so you can schedule maintenance downtime around them. This will improve uptime and productivity.
37. Calculate true cost of equipment ownership. Find out how much it costs (per day, week, or month) to operate each piece of equipment. Make sure maintenance is included. You need to know how much you spend to identify savings and determine whether equipment has reached the end of its useful life.
38. Maintain an accurate spare parts inventory. Pay as much attention to your own inventory of spares as you do to the inventory you ship to customers. Data on equipment assets helps reduce downtime by having the right part available at the right time, and allows you to either stock what you use or be comfortable with the lead time of ordering a part.
39. Track exceptions, errors, and disruptions carefully. Use the past to be better prepared. Have established processes in place to document and track everyday events such as equipment failures, unscheduled shutdowns in conveyors or sortation equipment, interruptions in order flow, and reductions in service levels and throughput.
40. Regularly test your capacity limits. Surge testing simulates typical demand conditions during peak season. You should conduct the test four to six weeks prior to the season’s start. Hold back up to half a normal day’s throughput, and then send it all during a compressed three- to four-hour period to replicate peak volume and operating conditions.
41. Know your business and how it affects current and future order picking needs. Organize your warehouse by what works best for your business—either stocking materials by products that sell quicker than others, by groups of products most frequently sold together, or by seasonal items. As your product mix changes, plan your storage needs based on current and future order-picking needs, taking into account your projected growth.
42. Create an emergency offline response plan. Identify key equipment within the facility that shuts you down if it goes offline. Your emergency response plan ensures you have the expertise, partners, and parts necessary to handle issues as quickly and intelligently as possible.
43. Select order-picking technology first. Order-picking systems decisions are closely tied to location and storage mode decisions. Different order-picking technologies need to be selected that are best suited to SKU velocity profiles. Order-picking technology investments offer different ROIs, depending on the level of activity within a pick zone.
44. Ensure adequate space in order staging areas. Take an organized approach to creating space and flexibility for outbound processes. Allow for 50 feet of space from the dock to give employees enough room to stage for shipment and provide creative options for how to build shipments.
45. Better evaluate systems integrator compatibility and availability. Warehouse automation is an intense process that depends on a long-term relationship with the integrator you select. The integrator needs to collaborate with a range of internal and external colleagues, and engage and motivate all players. Are the candidate’s temperament, communication style, and personality a good fit for your environment? Also make sure the systems integrator can commit the personnel and resources to meet your project’s goals and schedules.
Many companies outsource all or part of their logistics operations to third-party logistics (3PL) providers. Use these tips to choose the best provider for your business, and leverage their expertise to your best advantage.
46. Treat 3PLs as business partners. Your 3PL is not just another vendor and should be in the loop regarding significant changes in logistics needs. A 3PL partner should be able to scale its operations to your growing needs as well as any spikes in demand. In addition, a 3PL partner should understand your business, and be able to anticipate needs in advance as well as make recommendations.
47. Plan for new markets and capabilities. Can your 3PL support you as you expand into new geographic regions and/or new services? Make sure you understand not only its capabilities, but also its capabilities by geography.
48. Research and discuss financial and capacity status. Gather and ask for clear, regular communications about financial status. Plan for major events like a 3PL partner shut down that could leave your operations at a standstill. Be wary of 3PLs that have a large concentration of business with a small number of customers. Make sure you know your 3PL’s track record. Check references specifically relating to the services you’re interested in contracting.
49. Set goals and KPIs, plus incentivize. Both your business and your 3PL partner should understand the established goals and key performance indicators (KPIs) you use to measure performance. Incentivize performance. It’s important not only to establish realistic KPIs, but also to hold regular meetings with your 3PL, and offer rewards for performance.
50. Determine customization and postponement capabilities. An experienced 3PL can help you leverage postponement strategies to optimize inventory and deliver excellent service. Building to order instead of to stock allows you to cut production and inventory carrying costs.
51. Place value on a continuous improvement plan. 3PL partners committed to service excellence and quality management pay careful attention to solution design and utilize proven processes to achieve desired results. They are constantly improving and planning service and performance upgrades.
52. Look for a 3PL that clearly understands the value of your brand. When you partner with a 3PL, you entrust them with your brand, so it is important to find a company with a long history of proven brand awareness. Look for a financially stable partner that continues to invest in facilities, systems, equipment, marketing, and human resources necessary for optimal logistics solutions.
53. Find a provider that offers omni-channel expertise. Omni-channel retail is now mainstream. Select a provider that understands the nuances of omni-channel commerce and how to deliver the optimal customer experience. Look for an experienced partner with proven performance, a repeatable business model, and experience with your industry or business type.
54. Pay close attention to the location network and plan. Choose a partner that maintains a network of locations. An effective 3PL takes a strategic approach to network configuration and helps you determine the right distribution center locations for efficient current and future business. The right partner has a network of conveniently located facilities—and the ability to open new locations to meet your specific needs.
55. The value of product classification accuracy is multiplied for global shipments. Classifying products with the correct codes is an important requirement; it not only determines the duty paid on the product, but also can impact whether there are customs clearance delays because of inaccurate information associated with your shipment. By accurately classifying your shipments, you can clear them faster to avoid delays.
As shipments continue to travel around the world, use these tips to smooth the flow by selecting the right tools, learning how to manage cross-border shipments, and optimizing global transportation.
56. Use correct valuation and markings. Two important issues in reducing delays associated with clearing shipments are incorrect value declarations and insufficient/incorrect markings. Focus on both valuation and markings, especially when working with new products or suppliers. Making sure these are correct can help reduce shipping and clearance delays.
57. Score vendors on paperwork accuracy. Add paperwork accuracy as an element of your vendor scorecard, and make sure it has meaningful weight. A vendor that consistently causes shipping delays due to incorrect paperwork can be costly and may not be the best overall provider.
58. Plan for growth in new markets. It can feel daunting to receive orders from countries you’ve never shipped to before. Reach out to customs brokerage and transportation providers who can walk you through the shipping requirements. Not only will you be ready for the next order from that country, but it may also help grow revenue for your company.
59. Know customs triggers. Customs is increasing enforcement of regulations and if there are any inconsistencies, your shipment can be held up or your business penalized with substantial fines. Any address, purchase order number, quantity, weight, size, or other information discrepancies can delay shipments in customs.
60. Implement triangulation to avoid shipping empty containers. Triangulation means the same container and carrier is used for import and export—from point A to B, then immediately on from point B (or somewhere nearby) to its next destination. This also saves having to pay detention charges on a container not immediately returned to the yard.
61. Use an automated bid management solution. The ocean freight industry is in flux with a record number of mergers, acquisitions, and new alliances that impact service in key lanes and reduce carrier capacity. An automated solution can save time and provide the best rates. Check how bidders are vetted to be able to enter the system and provide bids.
62. Expect customizing and configuring. It is unlikely that you will find an off-the-shelf tool to meet all of your global trade needs. Make sure you can tailor the tool with flexibility to best meet you and your partners’ business processes. Configuring and customizing the system to link partners will help optimize processes so your business runs seamlessly.
Eliminating waste is one of the best ways to support sustainability of supply chain resources. Use these tips to create the right corporate culture and a leaner, greener supply chain.
63. Look for opportunities to create a shorter, more responsive chain. Redesign your supply chain network to bring items closer to home when it makes economic sense from a total landed cost perspective. Globally source where assurance of supply can balance savings. The shortened supply chain reduces mileage to save on fuel consumption and minimize time risk.
64. Optimize transportation processes not just for distance, but for total expected time. Carrier collaboration and automated processes reduce mileage and carbon emissions. Ensure orders are shipped on time, to the right location, and in the right quantities for successful first-time deliveries. Track and plan for total expected time costs rather than just by distance or mapping.
65. Use slot-booking applications that provide greater flexibility and exceptions. Look for an application that allows you to schedule arrival and departure appointments at docks to ensure the distribution center has the right team and equipment to facilitate loading and unloading to reduce wait times and idling. Make sure they can adjust easily to appointment changes and suggest alternatives.
66. Automate manual processes. Automating procurement, sourcing, inventory, logistics, and order management limits the use of time, paper, and other resources.
67. Consider DC bypass. If you have retail operations or customers near a particular port, but don’t operate a distribution center in the area, find a deconsolidation center close by to direct-ship products. This could significantly decrease your carbon footprint—and save considerable money, too.
68. Track trailer cube utilization. Study and measure contents, weight, and cube utilization of trailers and containers. Determine whether you use all the volume you can. This allows additional pallets, boxes, or cases onto outgoing loads and reduces transits. Be careful to understand when the cube is not fully utilized because weight—not volume—is the limiting factor.
69. Participate in SmartWay. The many carriers and companies that participate in the Environmental Protection Agency’s SmartWay Transport Partnership have made significant strides in reducing energy use. Even if your company has not been able to participate, try to work with partners that do.
70. Consider rail when possible. Trains are a far greener form of land transportation than trucks because they emit two-thirds less carbon dioxide. Rail transport is also attractive when fuel prices are high. Use rail as a leg of your products’ journey when you can.
71. Invest in lighting changes. Switching from halide or fluorescent to fixtures such as T5 or T8 lamps may result in using 70 percent less light-related electricity than you once consumed, potentially racking up big savings. Consider using natural light at your facilities where possible and appropriate.
72. Evaluate packaging for the tradeoff of costs and protection throughout the chain. Letting suppliers choose supply chain packaging is akin to shipping dollars out the door because most tend to err on the side of over-protection. Retool this largely untapped area of your supply chain to make your packaging work smarter, not harder. Work with suppliers and customers to determine the right amount of packaging to balance protection and costs. Explore the use of reusable packaging.
Taking a higher-level view, these tips help with the big decisions affecting the overall supply chain. Get advice on developing your SC network, competing in e-commerce, and using vendor managed inventory.
73. Utilize postponement strategies to move more SKU options closer to customers and react to changing business needs. With the ability to customize products using postponement strategies, you’re able to stock fewer SKUs upstream, which reduces the cost of carrying and managing inventory in favor of more end customer SKUs downstream. With value-added operations close to the end customer, you can delay product configuration until the last possible minute to respond more precisely and accurately to customer demand.
74. Get products shelf ready. Value-added services such as price marking, tagging, and display building help to streamline the process of getting products on store shelves.
75. Set up pilot sites and areas to test operations improvements. Before rolling out processes to improve operations, test the idea on a smaller scale at a pilot site to cultivate data and make necessary adjustments. When encountering issues such as quality control and returns, determining and executing the right solutions can be a challenge. Fine tuning strategies in smaller designated areas allows for maximizing efficiency before rolling out solutions across the network.
76. Expand product offerings. From building gift baskets to creating twin-packs, value-added services help give your customers more buying choices.
77. Determine if demand uncertainty indicates the need for multi-echelon vendor managed inventory (VMI). Require VMI providers to perform the direct capture of demand data from end customers, allowing intermediate storage facilities to replenish more accurately. The predictive power of this application smooths demand variation and supports economic order quantities while considering customers’ individual demand profiles.
78. Evaluate SKUs and refine pick strategies regularly across the business. Business changes with each season and order. Some SKUs no longer belong in the mix; some need expansion. Staying on top of order characteristics is critical to long-term efficiency. Conduct an inventory optimization study regularly and tap data analytics to determine what products to put where and how to pick them.
79. Compare automated VMI tools to manual VMI. Automated business process tools that utilize exception-based alerting to proactively manage the process enable you to eliminate errors, stock-outs, and emergency shipments. By automating the process, you can roll out standardized enterprise-wide VMI processes and inventory management controls, and scale your operation.
80. Understand your competitors’ omni-channel capabilities. Future growth will come mainly from omni-channel capabilities and fulfillment strategies that are not currently in place. Compare your supply chain against your competitors, utilize industry or private benchmarking databases, and map out competitor nodes as the platform for change in your organization.
81. Run a supply chain network evaluation every six months. Frequent network evaluations enable sound decisions around SKU rationalization, cross-docking opportunities, node constraints, and regional distribution center locations. Utilize a top-tier network strategy tool that supports multiple types of partners and total cost of ownership.
82. Select site locations with labor pool availability in mind. When selecting a DC site, it is critical to choose a location with a workforce that has the education and experience required to run your facility properly. Also keep that labor pool in mind when thinking about selecting partners or 3PLs.
83. Think like Amazon, but don’t BE Amazon. Be different. Differentiate yourself by offering a unique product or service. At the same time, learn from how Amazon manages its operations.
84. Diversify local, on-demand delivery options. With the rise of services such as Uber, Sidecar, Deliv, and TaskRabbit, widening distribution options are changing the nature of on-demand delivery. Though these businesses are relatively new, test them and see what works for your business.
85. Make the back end of your website produce accurate visibility of availability and true pricing. Ensure the buying process is as seamless as possible. For example, make sure orders placed online show accurate availability and are connected to fulfillment processes for faster delivery to the customer. Be transparent with your final order costs, including shipping charges, to avoid cart abandonment.
Use these tips to look for opportunities to both reduce costs and delight customers by cutting freight spend, optimizing route planning, and reducing packaging costs.
86. Shorten supply chains to reduce total costs. Onshoring and nearshoring create a shorter supply chain that lowers fuel usage, eliminates tariffs, reduces administrative time, and lowers landed costs while reducing the risk of a supply disruption.
87. Build and test prototype packaging. Work with the packaging materials and configurations your simulations have helped you select based on true overall costs to obtain, use, and dispose. Real-world experience reveals which packaging recommendations are as durable, executable, and feasible as proposed. Include contractual language that holds suppliers equally accountable for packaging efficiency.
88. Recheck your freight classifications. With significant differences in the cost to transport each of the National Motor Freight Traffic Association’s 18 different classifications, it pays to periodically check to ensure all products traveling in your shipments are being classified correctly.
89. Dispense with your disposal processes. Don’t just eat the cost of your plastic/cardboard waste’s haul away and disposal (close to $200 per ton). Many businesses such as polymer companies need this kind of trash—and some are willing to haul it away for free or pay for it. Look into this option for packaging disposal savings.
90. Link routing software to live vehicle tracking. Linking routing software to live vehicle tracking enables you to compare planned routes against actual routes. This allows you to detect unplanned activities such as drivers taking detours or regular delays at customer sites. It also helps identify areas of slack in your planning setup that will improve productivity. The resulting changes in standard procedures will help cost reduction efforts.
91. Look into impact, shock, or tilt indicators. These devices let you know when a potentially damaging behavior such as jolting or bumping has taken place, adding accountability to package handling. They also allow you to assign financial penalties if built into a contract.
92. Eliminate wasteful touches. By studying touches and removing non-value-added activities, companies shorten lead times and save money.
93. Find more efficient partners that can share the workload or take over. Collaborate with an outside firm so you can focus on your core competencies. With a co-managed approach, you can maintain the control level you desire, whether that means continuing to handle transportation planning and carrier management in house or outsourcing that function.
94. Understand and reduce cost-to-serve. Gain understanding of true cost down to a customer and product level with an analysis that incorporates transportation, production, customer service, and raw materials costs. Look for opportunities to consolidate orders, convert to lower-cost transportation modes, and even prune products and customers.
95. Reduce or eliminate expedited shipping. Expedited shipments are sometimes unavoidable, but you can implement strategies to manage those costs. Utilizing a TMS platform to identify expedites helps you quickly see cost and transit time so you can begin to increase cost impact understanding and change behavior.
96. Identify, track, and avoid accessorial charges. Carriers price accessorials, such as lift gate or non-commercial delivery, at a premium. Lower and shift the charges by passing them on to the consignee or consider the use of a courier or cartage company for final delivery.
97. Model what-if scenarios with simulation systems. Modeling the consequences of changing vehicle sizes, drivers’ hours, delivery frequencies, and delivery locations helps you make decisions without having to invest time or money to see the results. This requires an upfront investment in software, expertise, and time, but may produce high long-term ROI.
98. Time your heaviest pickups and deliveries for shortest overall distances. Vehicle weight can have a huge impact on fuel consumption levels. Since heavier loads consume more fuel, they should be dropped off first. If they can’t go first, collect heavy items last so you are only paying for transporting them back to your depot.
99. Invest in proper packaging and think total lifecycle. Preparing freight in the right packaging curtails damage claims and makes shipments more suitable for transit. The right packaging is not necessarily the one that best guarantees safe arrival. There may be tradeoffs that allow for some level of acceptable damage for a savings in packaging costs. Make sure you understand the total lifecycle cost of the packaging.
100. Optimize network design. Creating the most efficient supply chain lowers costs by eliminating underutilized and potentially unnecessary assets, facilities, processes, and suppliers. Network modeling software and analytical tools ensure optimal networks that deliver high customer service levels while staying agile to meet fluctuating demands.
One of the most important aspects of logistics is getting the right products to the right place at the right time at the right cost, in the right condition, along with the right information. Use these tips to improve routing, understand CFR shipping rules, get better at last-mile delivery, and become more efficient at intermodal transportation.
101. Make live vehicle tracking a core capability. Live vehicle tracking allows managers to detect anomalies in route times and distances so they can act immediately to control costs. Comparing planned to actual routes ensures drivers are following the plan. If any deviation occurs, customers can be alerted to delays.
102. Ensure your software systems are able to re-optimize deliveries continually. As new orders are added or issues arise, a system that continually re-optimizes schedules will maximize efficiency by taking into account delivery areas, available resources, and existing deliveries already confirmed.
103. Consider “what-if” scenarios for shifts in resources and processes you tend to take for granted. Using historic data to study shipments (overall contents, not vehicles or modes), prepare for vehicle size changes, shifting driver hours, and alternative delivery locations for distribution networks to improve transport efficiency.
104. Base your rate guide on your overall logistics strategy. Factor in the importance you place on using asset-based carriers versus third-party logistics providers, customer service standards, and cost savings goals.
105. Choose transportation providers with the customer in mind. Know the delivery criteria your customers are looking for, and select transportation providers accordingly.
106. Contract by more than price and sell that importance throughout the company. It is not all about the rate when choosing providers. Reliability by schedule adherence, punctuality, or timeliness also is critical. Apply and experiment with values for each to help with decisions.
107. Build intermodal network efficiencies through recognition and rewards. Recognize, reward, and rationalize your vendor network based on performance. By being easy to work with, measuring compliance, and rewarding performance with more volume, your intermodal network will become more efficient over time. All the stakeholders in your intermodal transport chain will benefit.
108. Communicate delivery timing early, often, and by a mix of channels. Never assume that sending one pre-delivery scheduling message is adequate, because it could easily get lost or overlooked by busy customers. Instead, communicate the particulars of each delivery window to every customer more than once via a mix of channels to reduce misunderstandings and prevent costly not-at-homes.
109. Invest in better last-mile visibility tools. During shipment, few things are more important to consumers than reducing uncertainty regarding location and timing. Differentiate yourself from competitors by providing real-time, last-mile connectivity within your company to give customers the visibility they want. This may require linking to a variety of contract last-mile providers.
110. Communicate route guide expectations clearly so what dictates success and failure is clearly understood. Ensure that you carefully communicate carrier awards, expectations, and compliance guidelines with anyone using your routing guide, as well as with your carriers. This includes key information such as ship-to and ship-from locations, drop-trailer, and labeling requirements.
111. Offer rapid resolution of consumer package issues. If a consumer package shipment is damaged, inaccurate, or incomplete, have your delivery team send a replacement request while still at a customer’s home. It demonstrates to your customer that your company is working toward a swift and seamless resolution. It also can cut as much as a full day off the replacement process and build loyalty.
112. Treat the final mile as part of your brand by using the right partners. Develop a clearly defined delivery protocol working with a carefully selected team of core providers and carriers who understand exactly how your company wants to craft its brand’s customer experience. Also, implement quality control measures to ensure that any delivery provider you use follows your protocol and delivery experience road map.
113. Use multi-period planning for more efficient routing decisions. Multi-period planning decides the best delivery patterns for each customer, ensuring multiple deliveries to the same customer are sufficiently spread out across the planning period, while also combining deliveries geographically and balancing workload across the period. Allocating delivery profiles in this way ensures you meet customer delivery requirements, while also minimizing transportation costs.
114. Ensure proper documentation regarding dangerous goods. Shipping papers should include required product information for people farther down the transport chain. Ground transport into the United States requires dangerous goods information to be recorded on the bill of lading. Shipping by air or ocean carrier under International Civil Aviation Organization (ICAO) or IMO regulations usually requires a specific dangerous goods declaration.
115. Don’t underestimate the importance of packaging condition on delivery satisfaction. External packaging that is less than pristine may cause the customer to question everything from the product’s actual condition to your company’s integrity. If any item is delivered with dust or tears, don’t assume your customer will overlook it. Correct it or change the packaging before it gets to the customer.
116. Connect your intermodal network on a common platform. Get closer to capable, leading, quality providers with data integration or an efficient multi-tenant portal to standardize processes and establish consistent requirements. Having all the transportation players on one platform gives a clear view of shipment data and service provider compliance.
117. Meet all regulatory markings and packaging requirements. Select the appropriate UN-specified packaging. It is imperative to understand the UN specification markings on the packaging selected. Also, verify the packaging is specifically authorized for the type and quantity of dangerous goods intended and via the transport mode you select. Review both the specific packing instruction and the marking section in the regulations to ensure you meet all requirements.
118. Determine the correct set of rules for your shipment. When shipping by ground in the United States, the right set of rules is almost certainly the 49 CFR parts 100-185. When shipping by air, the ICAO technical instructions, or one of its derivations, is most often the correct choice. When shipping by ocean carrier, refer to the International Maritime Dangerous Goods Code.
119. Determine if your shipment requires a placard on your vehicles or containers. If the load is large, or contains certain categories of dangerous goods, placarding may be required for the vehicle and/or container where the DG is loaded.
120. Look into supplier and partner direct shipment capabilities. Ask suppliers to ship some orders directly to customers. Look into sharing fulfillment operations with other omni-channel companies hoping to accelerate shipping times. Leverage 3PLs’ or carriers’ cross-docks, especially if they are already located close to your key consumer markets.
Your people are your best asset. Use these tips to boost your own skillset, and develop and retain a high-performance workforce.
121. Look for development opportunities everywhere. Learning opportunities include conferences, webcasts, blogs, magazines, books, white papers, vendors, and workshops. Listen closely to varied perspectives, experiences, successes, and failures.
122. Establish a teaching and learning culture. Learn from and teach others by determining what you do well and what others do well, then spending the time to network and develop yourself and others. Take advantage of association opportunities to learn and share experiences.
123. Develop networks of networks. Build and nurture relationships, getting to know people from all facets of the supply chain sector including association members, vendors, partners, event speakers, and the media. Put network development on your calendar and reach out to the networks of your networks.
124. Create a “great to work for” presence on social media. Show potential recruits what it’s like to work for your organization by highlighting examples of your company’s biggest successes or top performers on your website and social channels. Encourage strong performers to share their successes on their social media.
125. Provide organized and clear training programs. Employees obviously benefit from professional development and skills training opportunities, but pointing to development programs also helps with recruiting talent who want to be developed. As new technologies and business models continue to shift, you can secure talent by offering additional in-house or contracted training to close any skills gaps.
126. Offer paid internships. Paid internships or scholarships are a great “try before you buy” opportunity that is mutually beneficial for students and for the future of supply chain organizations. Providing paid opportunities to students is becoming one of the top draws of young people with potential to the field.
127. Emphasize career paths. What does a career path at your company look like? When will there be opportunities for promotion or advancement? These are questions you should anticipate from job seekers and be prepared to answer before they are even asked.
128. Build respect for cultural differences. As labor pools grow more diverse, make sure your leadership team and team members understand various cultures. Encourage all to share their heritages in creative ways.
Transportation requires a lot of trust and sharing of high-quality information, particularly if you want to establish long-term relationships. Use these tips to learn how to improve shipper/carrier relationships and become a shipper of choice.
129. Pay on time. Ask carriers what makes a preferred shipper, and their number-one answer is usually on-time payments. Everyone wants to get paid according to the terms of the contract.
130. Use data and tool sharing. Shippers expect carriers to provide real-time data on shipments, and carriers have gone to great expense to do so. In return, be willing to invest in options that provide smooth, accurate data transfer without extensively modifying code and procedures on either side.
131. Communicate freight claim procedures. It’s a common misconception that freight claim management is confined to the claims department. In reality, departments ranging from receiving to purchasing play an important role in ensuring freight claims are paid and processed properly. Clearly communicate the role each department plays in freight claim management.
132. Treat drivers well. Anything you can do to make your facility more driver-friendly helps your carriers retain drivers, which reduces their operating costs to save money. A long-term driver will know your business and your procedures, and makes pickup and delivery more efficient.
133. Create a carrier mix to spread risk and increase innovation. Many shippers give all their freight to one carrier, but that can hurt you in the long run. Create a pool of core carriers to alleviate risk, and increase innovative options for on-time delivery efficiency.
134. Make transactions easier for service providers. Standardize your business requirements for shipment acknowledgement, scheduling, en-route event capture, proof of delivery, and billing. When capacity is tight, quality carriers gravitate to the shippers who are easiest to work with.
135. Monitor quality of customer interactions. Provide accurate information and treat and service customers well. A good relationship at all levels of the organization is the best way to ensure a healthy shipper/carrier partnership.
136. Track transit time. Some carriers assign LTL shipments a lower priority than other shipments due to capacity constraints. As a result, your shipment could take longer to reach its destination. Keep track of your transit times to make sure carriers move your LTL freight expeditiously.
137. Give complete information and realistic schedules. For prepaid freight from your vendors, just as with managed pickups, issue orders with clear instructions regarding your merchandising policy and scheduling appointments. One option is to create a link on your company’s website where carriers can easily obtain scheduling and policy procedures through apps, email, or text.
138. Look for best fit for long-term wins. Work with carriers to determine which lanes and freight work best. Carriers no longer take all the freight offered to them. Collaborate with carriers to ensure you add profitable business to their network. This will solidify a long-term relationship that will save you from costly changeovers.
139. Track and communicate arrival and departure time performance. Minimize contention with carriers by offering an accurate and efficient system to capture arrival and departure times. The system should publish instantaneous reports to share with your partners.
140. Treat carriers like partners. Your carriers are supply chain partners and deserve to be treated with the same respect as customers. Be friendly and responsive and expect the same of them.
141. Follow through and follow up on commitments. Carriers base their prices on the data provided. Supplying inaccurate data or not shipping in the lanes and tonnages according to commitment could lead to renegotiation and changing carriers sooner than anticipated. Share performance data and concerns regularly.
142. Provide superior data accuracy and timeliness. Good data is important to carriers during the bid process. In addition to lane and tonnage data, provide freight characteristic percentages and monthly volumes to help carriers plan appropriately with regard to locations and any specific freight characteristics, as well as for seasonal changes in volume.
143. Communicate regularly. Hold quarterly meetings with carriers to review performance metrics, new services and options, business pressures, and to strengthen the relationship. Discuss high-cost issues, so you can implement strategies that reduce costs as opposed to raising rates.
144. Supply a drop and hook program. A drop and hook program, when drivers drop their trailer at a customer location and hook to another trailer, is ideal when supply chain partners can’t make live loading work efficiently. Secure your yard with 24/7 access for carriers and backhauls to help the flow of traffic in and out of your facility.
145. Use a web-based portal for appointments. An online portal allows supply chain partners to book or amend appointments or check on bookings status 24/7.
146. Review insurance policy value and liability limitations. Insurance isn’t often an issue because shipping companies offer a variety of policies to cover your freight. However, it is important to pay attention to liability limits, and get extra insurance if needed.
Supply chain security is becoming more important as the growth of both data sources and collaborations expand. Use these tips to minimize losses of both goods and data through theft, fraud, hackers, and errors.
147. Use tracking devices on shipments and assets. Utilize covert tracking devices to help recover stolen loads. It’s important to place the device where thieves can’t easily detect it. If you track trailer locations by GPS, you can be notified of theft faster and, in some cases, prevent thefts entirely.
148. Monitor and review vendor access logs. You may not have direct control of vendors, but you do have control over what they can access and when. Regularly review your logs to identify normal behavior or any discrepancies. Some technologies can help automate and enhance this task. Frequently change logins and passwords.
149. Use data analytics scans of transactions. Take a proactive approach to mitigating supply chain fraud by employing analytics as part of the invoicing process. Use data already resident in your enterprise resource planning systems to run fraud tests and other analytics that can identify anomalous or erroneous billing.
150. Conduct regular supplier evaluations. The front-end approval process should not be the end of your supplier assessment. The players within the supply chain change frequently as employees come and go, and suppliers get bought and sold. These events can change the level of risk in a relationship, so regular reevaluations are crucial.
151. Realize that security is not your top talent. Read the latest transportation security or risk management-oriented newsletters. Join a freight security network or two to gain some knowledge and resources.
152. Spread out the risk by paying attention to load values. Track load values. When you ship high-value loads, consider putting lower values of freight on each shipment to reduce risk of loss.
153. Embed security standards in contracts. One of the most effective ways to improve cyber security in your supply chain is to make partners uphold clear standards in contracts. It is best to use a cyber security framework such as NIST Cyber Framework to achieve a shared understanding of standards and expectations.
154. Make your transportation assets stand out from the crowd. Consider using trailers with unique markings. The more unique the appearance of the trailer, the more likely law enforcement will be able to spot it on the road if a theft has been reported. Cargo thieves know this, which is why the majority of stolen trailers have minimal markings.
155. Review vendor incident response plans. Always make sure vendors have an incident response plan in place before conducting business with them. If there is a data breach on the vendor’s end, you need to be part of the plan and not find out the hard way. Make sure vendor response plans include a communication strategy and mitigation controls.
156. Know and regularly review your partners. Increasing reliance on supply chain partners can leave enterprises vulnerable. Take time to thoroughly vet new suppliers. This vetting should include detailed background checks, visual relationship mapping, and business intelligence reviews to identify potential conflicts of interest, indicators of financial distress, or other misrepresentations.
157. Verify, verify, verify. Many thefts occur by virtue of so-called fictitious pickups, where a shipper or intermediary has inadvertently sent a rate sheet to a thief impersonating a legitimate motor carrier. Make sure the trucks picking up loads from your shipping facilities have real trucking company names on them, and that the MC/DOT numbers on the tractors correlate with those names. Use safer.fmcsa.dot.gov to verify names and MC/DOT numbers of authorized motor carriers.
158. Establish data steward requirements. This applies to both your company and your vendors. Implement some sort of data ownership or stewardship. If data issues arise, ensure there is a liaison in place to help your company and your vendor communicate more effectively. Make certain both parties understand what proper use of responsible data means.
159. Review cloud security and storage policies and performance records. Cloud services are increasingly in demand, but they can create security and storage issues. Validate the security and storage features of your system before you purchase it. Regularly review vendor performance, not just with your data, but also by tracking any data breaches or issues reported by other clients of the vendor.
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