Every year predictions are made on what the coming year is to be. Some of the predictions come true; others never see the light of day; and still others never make the list of predictions, yet weigh heavily on the year.
The COVID-19 pandemic made 2020’s predictions worthless as it weighed heavily on the world and changed supply chains for what may be forever, but that will not deter us from walking through today’s trends and what it means for 2021 initiatives.
With the above in mind, let’s walk through the winning trends in logistics and supply chain strategies that shippers, motor carriers and logistics companies are employing.
Assembling a logistics and supply chain that is both flexible and agile to adjust quickly for expansion or contraction needed to address vendor and customer requirements.
As part of being flexible and agile there needs to be contingency planning to account for political, labor and natural disaster impacts that could impact a company’s supply chain.
Some things to consider to become more flexible include:
The key take-away is to think outside of the box and extend supply chain communications among the organizations your company depends on for revenue, which would be both customers and vendors.
Develop system connectivity to all stakeholders to provide full transparency to those parts of the organization that touch the customer.
Ecommerce and omni channel distribution managed as an integral part of a company’s distribution strategy, not an add on to the brick-and-mortar strategy.
Systems not only operate the business, but also maximize the opportunities of using all available options for distributing the product to the end customer.
To this end, transportation management systems are being upgraded and brought into companies to optimize orders and bring full transparency to order fulfillment strategies.
Companies are doubling down on trusted partners. There cannot be enough said on how a long term partnership reduces actual costs, not increase them. The thought of moving business from one freight provider or vendor used in the supply chain to another based on the price of today is short-term thinking and found to be unsuccessful in today’s freight market.
Long term partnerships allow all parties involved in your business to understand, as you understand it, to maximize service, reduce cost and drive long term value.
The caveat on doubling down is it MUST be with trusted partners that are not in it for themselves. There are a couple of ways to judge whether or not you have a trusted partner:
Consumers are more eco-friendly and understand the impact the transportation industry plays a significant role in greenhouse gas emissions.
Supply chains sustainability is both a freight provider and warehouse topic.
Areas to consider for warehousing operations include:
For the freight side of the sustainability equation shippers need to search out those motor carriers, freight brokers and logistics service providers that are registered with the EPA SmartWay Program. The purpose of the EPA’s SmartWay program is to help companies advance supply chain sustainability by measuring, benchmarking, and improving freight transportation efficiency. The program is set in place to monitor, measure and improve their carbon footprint and environmental impact of their business through various tools provided by the EPA.
Shippers can be a part of the EPA SmartWay program also.
Data needs to move up in importance. No longer is it good enough to capture logistics transactions in summary through accounting and finance tools.
Shipper need to collect data by shipment and at a very minimum have the following details associated with it:
More to Data than Collecting Data.
The logistics industry has been hard hit by cyberattacks and ransomware events. These events are occurring on a more frequent basis and they are crippling companies of all sizes.
If you are not thinking about security, the bad actors will.
Technology has been moving at a breakneck speed for the most disciplined companies in 2020, but not all were fortunate enough to have the financials to support the investment.
With the previous in mind, companies that had to put their technology on hold in 2020 are behind the curve. Combine this with new challenges companies found in working in the new normal brought on by COVID and global politics increasing those needing technology upgrades and there is a tremendous demand for attention and bandwidth for logistics and supply chain technology companies.
The problem this brings is demand is going to outstrip demand on an exponential basis.
The end result is those that are late to the table will struggle to get their solutions implemented, so get in line early or suffer the consequences.
Companies are outsourcing more of their logistics and supply chain work:
SAAS (software-as-a-service) and SCAAS (supply-chain-as-a-service) are two concepts to grab hold of to assist in moving forward quickly and on a variable cost basis.
SAAS cloud based transportation management software (TMS) systems is the best option for companies of all sizes to access the technology required to take their supply chain from a cost center to competitive advantage for those that want to manage the supply chain within their four walls.
For those companies that want to focus on what they do best and leave the transactional supply chain work to those that have created strong business doing it for others, their option is to turn to SCAAS. The SCAAS approach has been a long time practice of large companies where companies outsource their logistics functions, but as technology has improved and competition has brought down the pricing of the SCAAS solution it is even a better option for those mid-sized shippers looking to supercharge their supply chain in months, not years.
As part of any SAAS or SCAAS solution is the control tower concept. Much like an airport control tower where flights are reviewed, managed and directed from origin to destination and from zero to 30,000, so too can a company’s logistics and supply chain activities.
A supply chain control is an agile cloud platform that focuses on providing end-to-end supply chain visibility and control. By integrating and extending existing ERP, WMS, and TMS systems with suppliers, manufacturers, 3PLs, and other partners, control towers provide actionable, granular visibility and operational control across the entire supply chain to optimize on efficiency, service and cost.
Companies are moving from supply chains to supply networks.
Supply chains are moving to supply networks. The difference is supply chains infer a one-to-one linkage where one step needs to be completed before the next step can be taken, while supply networks imply a many-to-many relationship where multiple inputs and outputs can be managed at one time allowing for quicker throughput and acceleration of product movement from start to finish.
With supply chain chains moving to supply chain networks shippers and logistics companies need to automate the tasks, so they can see the big picture to compete successfully in the market.
The result is the drive for more technology to automate the daily tasks so the logistics professionals can do the value add work of improving cost, transit and overall effectiveness of their supply chain network.
More and more companies are embracing best in breed logistics and supply chain technology found in the market versus building the competence within its four walls..
There is no need to spend hundreds of thousands of dollars building and maintaining an internally developed TMS, with connections into the 100’s of technology platforms to further optimize a supply chain network.
The best SAAS TMS systems of today allow shippers to build best in breed supply chain systems that are best fit for their business requirements by integrating in several of the best ancillary supply chain systems that have established a niche within a transaction set within a supply chain.
The top-tier TMS systems have already established API connections into their system to allow shippers and logistics to build the best of breed TMS quickly and easily.
As an example, the MercuryGate cloud TMS has over 50 such integrations already in place and building more every year.
The two themes to close with are logistics professionals need to have an open mind and be relentless in their pursuit of logistics and supply chain excellence for your company.
An open mind will be needed in making supply chain decisions this year as many will be challenging and uncomfortable decisions, but with tremendous upside once fully implemented.
The effects of 2020 will be felt in 2021 with capacity shortages in moving the freight itself and technology providers in the logistics and supply chain space, as the numbers of companies needing to drive improvements over their 2020 results and those not wanting to fall behind competition in their drive to supply chain excellence will be significantly greater than prior years. So again, those who move quickest will improve their chances of accomplishing their company and team’s goals in 2021.
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