Five ways to supply chain and logistics management efficiency

THE efficiency of supply chain and logistics systems could make or break a business. A small challenge could trigger a wildfire of inefficiencies. For instance, a store has run out of a specific product and has placed a replenishment order. Without a backup plan and foresight, the product’s availability would be highly dependent on this sole supplier, leading to delays and impacting the consumer experience.

Most recently, the global supply chain has gone through massive delays in the movement of goods due to the pandemic. In Southeast Asia, for instance, container vessels may have to wait five to seven days from a maximum of two days to unload shipments in Singapore due to port, depot and warehouse congestion.

The gaps in supply chain and logistics highlighted by the pandemic point toward the need to build resilient, agile and customer-centric supply chains. Soham Chokshi, CEO and co-founder at Shipsy, offers five ways to an efficient supply chain and logistics management system, as follows:

1. Improve logistics transparency. The supply chain industry runs on thin margins. Any logistical delays could cascade the supply chain process. As such, having complete visibility over goods movement is crucial.

Innovative logistics management tools empower businesses with granular-level visibility to boost delivery productivity by eliminating idle times, unnecessary route diversions, unprecedented stoppages, etc. Predictive analytics and advanced reporting help companies gain advanced visibility into seasonal peaks, changing shipping demands, transportation issues, etc., dealing with delays, exceptions and exigencies.

2. Enhance collaboration across supply chain stakeholders. For decades, manual processes and siloed systems have challenged the supply chain and logistics processes by hindering timely and efficient data sharing. This lack of visibility results in data inconsistencies and leads to inaccurate decision-making.

An advanced logistics management platform updates delivery stakeholders with real-time shipment information. It expedites resolution by alerting senior management on delivery exigencies to help enhance decision-making, reduces delivery latency, and significantly improves accountability, thereby saving 34 percent in incidental costs.

3. Boost customer experience. One negative experience is enough for customers to leave a brand they love. Rising cross-border eCommerce and intensifying competition are rapidly shifting customers’ delivery expectations. For instance, 69 percent of Singapore Millennials made cross-border purchases in 2020, and the country had the highest percentage of online cross-border purchases in the Asia Pacific.

Ensuring inventory fidelity is critical to boosting customer experience. Smart logistics management tools allow businesses to quickly partner with the most reliable logistics partner to meet stock replenishment needs to increase on-time deliveries by 24 percent. Such tools also keep the customers notified about where their order is, who would be delivering it, what’s the exact ETA, should they expect delays, and more at any given time.

4. Optimize costs. As much as 53 percent of the shipping costs are incurred in the last mile, making it the most expensive leg of logistics operations. Inefficiencies, such as poor route selection, lack of ground-level visibility, and poor capacity planning challenges businesses to bring logistical costs down.

AI and ML-powered logistics management tools allow businesses to chart out the most cost-efficient route to the customer location to reduce last-mile delivery costs by 12 percent. Such tools automate delivery operations, shrink investments in manual effort, optimize fuel consumption and capacity utilization, and more to lessen the total cost of ownership incurred while executing logistics operations.

5. Meet sustainability goals. Environmentalism is becoming mainstream. Going by numbers, 57 percent of consumers are willing to change their purchasing habits to reduce negative environmental impact. Customers are spearheading the need to ensure an eco-friendly supply chain and logistics operations.

Moving ahead, customers are likely to favor brands that embrace solutions to lower their carbon footprint. Businesses would need to optimize their first, middle and last-mile operations to achieve this. They must focus on reducing the distance traveled, increasing first-attempt success, and planning multi-pickup and drop delivery routes, lowering fuel consumption, and improving resource and capacity utilization. Smart logistics management tools drive sustainable logistics operations by curbing distance traveled by 5 percent and decreasing trip volumes by 6 percent.