Supply chain and logistics professionals must be able to quickly adapt, innovate and solve problems in order to keep pace with the industry. So how can supply chain and logistics managers prepare themselves for the future? Here’s our top three tips for supply chain managers in the 21st century:
The logistics industry has evolved tremendously and shows zero signs of slowing. Technological innovation, political variances and economic globalization are all factors that could create considerable change for companies which transport goods.
Within domestic freight management, the LTL (Less-Than-Truckload) industry is changing the way many commodities are rated. Previously, shipment rates were calculated based on the NMFC, however, more and more commodities are now being rated based on the density of the freight, also known as the dimensional weight. Shippers who are aware of these changes will not only avoid costly miscalculations but also avoid carrier rebills.
International freight forwarding is rapidly evolving as well. For example, the restructuring of ocean carrier alliances on April 1, 2017 has resulted in a number of changes for ocean cargo. The new ocean carrier alliance networks have decreased the amount of direct port calls and increased the need for transshipping. Due to the reduced number of port calls on select service strings, some lanes have actually seen a decrease in total transit time. For example, if a container is moving from a smaller port to another smaller port, the transit time is expected to be increased. However, if a container is moving from a larger port to another larger port, the transit time should decrease slightly.
Retail logistical requirements are also quickly changing. Many big-box retailers are changing delivery requirements to reduce inventory variability. Retailers previously provided suppliers with a delivery window, commonly known as the MABD (Must Arrive By Date). Historically, the MABD was set at 90 percent on time with a four-day window (MABD and the three days prior). Suppliers which did not meet these set requirements were charged 3 percent of the cost of goods sold for each case of non-compliance (early, late and short). Retailers are now shortening the delivery window further. For example, Walmart introduced a new initiative known as the OTIF (On-Time In-Full). Suppliers who fail to meet the new requirements when the new initiative fully takes effect later this year will receive a monetary penalty.
Companies which find a strong logistics partner can thrive when opportunities or challenges arise. In a time of changing consumer needs, companies can benefit greatly from having a logistics partner that can offer flexible and comprehensive solutions. A strong logistics partner can help guide companies when entering new global markets, foresee problems ahead of time and resolve issues promptly. Look for a logistics partner that believes in open communication and transparency, quality service, friendliness, comprehensive solution offerings and is easy to do business with.
It is no longer enough to react to changes as they occur. The most successful leaders in business understand that change must happen before it is forced. Continued changes within logistics is certain so companies need a partner that can help them not only survive, but thrive in the face of adversity. Collaborating and innovating together can help companies develop new, optimized and more efficient processes to drive down costs and add value. Lastly, a partner committed to continuous technology innovation will enable their clients to continue to prepare for future changes within the industry.
While this list is not inclusive to all of our tips for modern day supply chain and logistics managers, these three tips focus on the fact that the transportation and trade industry is extremely dynamic and evolving at an exponential rate. With a strong partner and a clear vision of future goals, supply chain and logistics teams can continue to prosper amid transformations in job roles and changing industry factors.
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