in the Amazon Effect Era Having transparency across all aspects of your logistics operation w ill enable your company to succeed in a co m p etitive marketplace. By Gary Allen
mance baselines and the accompanying network profile.
Second, you can leverage data analytics to quickly drive business insights. You want to be sure youre spending more time interpreting the data than on gathering and reporting it, which can be achieved by purchasing a cost-effective tool that can quickly turn Big Data into actionable information. Equally essential is establishing a four-step approach as the basis for managing and controlling network costs and service performance: Performance + Variance to Plan + Root Cause = Action. You can utilize tools including bar graphs, such as Pareto fficient transportation management with end-to-end charts, to focus on the areas driving the greatest impact to
E visibility is becoming more and more vital to a compa
nys supply chain and its overall success. As e-commerce and omni-channel fulfillment service pressures continue to mount, transportation managers are faced with a growing number of challenges: shorter lead times, tighter delivery win the issue. Also, when developing your weekly/monthly perfor mance bundle for management reviews, the information, charts and dashboards that you gather should answer the question: What should the takeaway be from this? All too dows, driver shortages, the need to make more frequent and often, the audience is left to interpret the information with no smaller shipments, rising freight costs, and globalization. direction from the subject matter experts. These challenges have a significant impact on a compa Finally, get into the practice of reviewing. Consistently nys operation and its bottom line. From increasing freight monitoring your network (weekly, monthly, etc.) will pre rates to uncertainty in the transportation market, there are vent network performance issues from lingering too long and numerous factors playing an influential role in driving the worsening before getting addressed. market forces that could prevent supply chains from meeting their customers rising demands. The Am azon and the Uber Effects The reality is that in the majority of cases, there is room In addition to taking these steps when establishing your for network optimization and cost savings. Private fleet transportation management strategy, its critical to be aware shippers have the ability to achieve both through routing, of the different emerging trends within the industry and how dock scheduling, driver management, backhauls and fleet theyre impacting your business. Trends like the Amazon right-sizing. And the benefits are far-reaching: Effect, for example, can no longer go ignored if you want Dynamic planning capability your company to experience long-term success. The Ama Flexibility to manage variations in demand zon Effect goes hand in hand with the concept of the now Increased network visibility regardless of mode economy, in which customers order items at the touch of a Alleviated capacity changes and driver issues button and receive them at their doorsteps just hours later. Business intelligence and analytics The phenomenon is evidenced by 2016 e-commerce growth, Comparison of costs for fleets vs. for-hire carriers with Amazon accounting for 53% of online deliveries, ac Strategic decision-making support. cording to Slice Intelligence. You might be asking yourself what actionable things you The Amazon Effect has skyrocketed demands within the can do to really streamline transportation management, trans supply chain and has set the standard for what consumers form operations and navigate the aforementioned challenges. have come to expecteverything from competitive pricing First, you can formulate effective baselines that can be com to free shipping and quick delivery time. This trend has been pared to actual results. Being able to quantify progress can be the key driver behind the closing of some brick-and-mortar made simple if you make it a priority to understand perfor store locations, including M acys, JCPenney and Sears.
28 W W W .M H LN EW S .C O M I JUNE 2017 I MATERIAL HANDLING & LOGISTICS
With a limited inventory of in-store wasnt one consistent process. Transit ers, gives a clear view of inventory and merchandise, fewer retail stores and the times were reliable and tight, but the pro supply chain activity, and helps create ability to find just about anything you cess was hampering deliveries, and it responsive supply chains. could possibly need on Amazon, con was too labor intensive. With managers Many businesses partner with a 3PL sumers are less inclined to get in their relying on handwritten spreadsheets, the with engineering, integration and oper cars and head to the store for something. retailer partnered with a third-party lo ation teams in order to get a true visibil And if youre thinking that youre im gistics provider (3PL), which installed ity program in place. A 3PL can help a mune to the pressures because youre web-based software at each DC. Now, company execute the five vital steps in not in the retail space, think again. This the software allows managers to dynam system implementation: trend is disrupting supply chains serving ically control deliveries at each location, CaptureUse advanced technol multiple industries, such as food and saving the company $2.8 million in op ogies to gain visibility across the beverage, consumer packaged goods, erating and transportation costs the first supply chain. automotive, technology, and healthcare. year and improving visibility. AnalyzeEvaluate where branded A greater need for asset sharing has and private label products come materialized as a result of the Amazon A Responsive Supply Chain from. Effect, fueling whats known as the Uber New strategies and results have sup DesignSet up supply chain routes, Effectyet another trend and supply ply chain managers embracing the same material flow and logistics networks to chain disruptor. Asset sharing, which in technology customers are using for data accommodate varying requirements. cludes warehouses, trucks and drivers, is mining, analysis and tracking. In another SenseUse advanced analytics, busi emerging as an opportunity to help com approach, competitors are cooperating ness process and planning technologies. panies meet the demands of the Amazon with each other to improve efficiency StructureDevelop structured Effect by facilitating collaboration with and keep shelves stocked. These strate playbooks or scenarios to know how peers and competitors to drive efficien gies enable customer demands to be met to comply with rules, regulations, cies, improve service and manage costs. while lowering their cost to operate. exceptions and practices. This practice, which centers on sharing Having transparency across all as Technology solutions are available that space, translates into shared costs, which pects of your logistics operation is ulti work on both smart devices and desktops will lower overall supply chain cost and mately what will enable your company and that can provide load location visibil improve cash-to-cash cycles. to succeed in a competitive marketplace. ity, tracking and customized communica These trends are pushing supply This is where technology comes into tions across all modes of transportation chain managers to adjust their strategies play. By investing in new technology through a single source. MH&L in order to keep loyal customers and re that gives you visibility into your sup main in business. Approaches that once ply chain, you're ultimately enabling G ary Allen is vice president, supply worked, no matter how recently imple a cycle of continuous improvement, in chain excellence with Ryder System mented and regardless of the sector, can which youre able to track parts, com Inc. (w ww.ryder.com ). H e has more be obsolete tomorrow. ponents and products from the manu than 25 years o f experience in sup For example, up until a few years ago, facturer to the final destination, both ply chain management, logistics out a large retailer was performing dock in transit or at rest. The ideal system sourcing and professional services. scheduling for each of its 35 distribution captures data through new and flexible centers separately. Too many employ technologies, makes useful data rapidly FOR RELATED CONTENT, GO TO: ees were scheduling deliveries and there available to stakeholders and custom mhlnews.com/tech-supply-chain
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