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Include transport needs in supply chain – from the start

Transportation should have a say in the collaborative planning process right along with the other supply chain functions – this could have huge benefits for an organisation.

Supply chain

Just how collaborative are your internal departments? If you’re running into issues when one department makes a decision that unintentionally affects one or more aspects of your supply chain, your answer is probably along the lines of ‘not very’. And it may be holding back your transportation team’s effectiveness.

Check out this article by Steve Raetz, director, Research and Market Intelligence, on the CH Robinson Transportfolio Blog.

In many organisations, transportation is simply the recipient of collaboration that happens in other supply chain functions. With this model, transportation teams can only respond to what comes their way. Instead, transportation should have a say in the collaborative planning process right along with other supply chain functions. When thought about earlier, transportation can be a more proactive contributor to overarching supply chain goals.

WAREHOUSING EXAMPLE

Here’s a quick example... ZYX Company needs to increase sales and profits. Accordingly, they make a strategic supply chain shift to a new warehouse that positions products closer to a key customer. After implementing the change, ZYX Company does in fact hit their projected sales and profits goals; however, they fail to predict that transportation spend would increase substantially.

While the warehouse is closer to one customer, several other customers are much further away now and therefore require longer transportation routes. In addition, ZYX Company carriers now primarily rely on a different trade lane than before — one with fewer backhauls available. Both situations bring about higher transportation rates.

The new warehouse could still be the right move for ZYX Company but a situation like this could have initiated a broader conversation on how to weigh the anticipated benefits of a business decision against potential transportation cost increases. Knowing the transportation ramifications up front may have helped to determine if these trade-offs are worth it — before making the decision, rather than afterwards.

BALANCING COST AND REVENUE

It’s not just warehousing that impacts transportation, issues or changes to shipment size, supplier networks, customer locations, product mix, even fuel surcharges and carrier contracts can tip the scales between cost and revenue. And if your transportation experts aren’t part of the conversation, you may not have the expertise in the room that can explain how a decision will influence transportation.

CROSS-FUNCTIONAL ALIGNMENT

All internal collaboration should be cross functional, appropriately aligned to business goals, and use expertise from all departments — including transportation. Everyone who touches your supply chain could be part of the process: people who order materials, build and manage stock, ship product, answer customer questions, forecast, invoice and handle financials. Don’t be surprised if this includes people in non-supply chain roles or departments. Remember, a big sales push on a certain product at the end of the quarter could influence the following quarter’s transportation budget.

Remember, a thoroughly collaborative environment creates a unified approach to setting and meeting your goals, based on a complete picture.

Resources: CH Robinson Transportfolio Blog


 

08 Jun 2018;
08:00AM -
FRIGAIR Expo 2018 - Day3
16 Oct 2018;
08:00AM - 06:00PM
Chillventa 2018 - 16-18 October
16 Oct 2018;
08:00AM - 06:00PM
Chillventa 2018 - 16-18 October
16 Oct 2018;
08:00AM - 06:00PM
Chillventa 2018 - 16-18 October

 

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