For many supply chain leaders, the past few years have felt like a repeated pattern of identifying problems and trying to put out fires in transportation and distribution management. This has led to increased costs, reduced profits, and a tremendous amount of daily stress.
Instead of taking a scattershot approach to solving the latest problems that pop up during this period of supply chain disruption, supply chain managers need to think through how to address the most prominent challenges. This way, you can shift to preventing fires in the first place, and then you’ll be able to regain control of the supply chain and return to profitable operations.
Let’s start with a review of key issues around transportation and distribution that are likely affecting your company.
Are You Dealing With These Issues in Transportation and Distribution Management?
We have heard from our customers and reviewed industry reports to identify three main issues affecting managers. Which transportation and distribution issue resonates with you?
1. Product shortages. Many suppliers do not have enough products to ship. This could be caused by a lack of available raw materials than prevent products from being completed. Or, suppliers could be experiencing order fulfillment issues because their partners are experiencing delays, which creates a domino effect throughout the entire supply chain.
Upstream issues are often exacerbated by poor communication. One company doesn’t inform another company about its inability to fulfill an order, which leads to everyone else waiting around for the problem to be addressed. By the time the problem is passed down to your company, you’re forced to eat the cost of putting out this fire trying to get product out the door.
2. Labor issues. Carriers are currently experiencing transportation delays due to personnel shortages and other factors affecting their ability to move shipments from one location to another. Consider these two sobering stats about how labor shortages have hurt transportation.
- Forbes reports that 2.1 million critical supply chain jobs will remain unfulfilled by 2030.
- Specific to trucking, the American Trucking Association (ATA) reports that the trucking industry will be short by 140,000+ drivers in 2026 and 160,000+ short by 2030.
There simply aren’t enough truckers available to drive the trucks required to support the needs of the supply chain. This is why there is a significant technological push for automated trucking to help fill this gap.
But, until self-driving trucks are a reality, many companies are paying premium shipping rates trying to move products as quickly as possible, which creates a tremendous strain on budgets and severely impacts profitability.
3. Inability to support the end customer. The first two problems that we identified typically affect a company’s ability to fulfill its commitments to the end-user.
For example, you could be experiencing ongoing challenges satisfying the terms of a contract or agreement for a particular customer, leading to added costs for delayed or incomplete shipments. These added costs stacked on top of each other can become a very high cost.
Companies often find themselves in this situation because they lack visibility into the status of orders a few steps ahead of them. Suddenly, the time comes when they need to get a shipment out the door to satisfy an agreement, but they don’t have the product. And, if there is a lack of communication with partners, they cannot easily find the source of the problem or receive a status update on when they will have the order on hand.
In this case, supply chain managers have to scramble to find a way to satisfy the customer’s order, perhaps make a concession to solve this particular problem, and incur additional costs doing what it takes to put out the fire. While it is understandable and admirable that managers will do their best to solve problems for their end customers, this approach is not sustainable.
The Old Way of Trying to Solve Transportation and Distribution Management Issues
Unfortunately, each of the three challenges we identified has become an enormous challenge because of the pandemic. When faced with these larger challenges, managers have reflexively gone into problem-solving mode, trying to address problems using known tactics without considering the long-term impact.
Prior to COVID-19, managers were able to focus more on supplier compliance, cost savings initiatives, and process improvement. Everything slowed down once the pandemic hit, especially transportation and distribution management, and this created tremendous stress that could not be solved with old problem-solving methods.
Rather than optimize and enforce shipping rules and processes to save time and money, managers felt forced to relax their standards in order to satisfy customer requests. For example, companies abandoned customary shipping rules and gave suppliers permission to ship as soon as they had product – and ship it the fastest way possible.
This approach of abandoning rules and getting things done by any means necessary led to higher costs for premium shipping. Additionally, this tactic created a lack of data integrity or even eliminated useful data because companies abandoned their systems and rules.
We’re here to tell you that there is a better way of handling challenges that will go a long way toward reversing the effects of this stressful period for supply chain managers.
A Better Way to Support Transportation and Distribution Management
One of the key steps managers can take to regain control of their supply chain is increasing visibility into supplier activity as early as possible. For example, it’s difficult enough when there is a product shortage, but if you know exactly when a supplier is preparing your product, you could start to make transportation plans before it’s packed and sitting on a dock, ready to go.
Suppose you had centralized, easy-to-view shipment tracking. In that case, you’d know when shipments were coming to your facility so that you could plan appropriately and satisfy agreements with your end customer more efficiently.
If the current supply chain challenges require you to relax some rules and processes, then at a minimum, you should have a system in place where you can easily make changes to those specific business rules while still logging all activity in a centralized location.
But, as soon as you stray completely from systems and processes, you lose visibility. And you can no longer rely on data needed to make quick and effective decisions.
CloudLogix provides you with a system that allows you to remain nimble during various challenges while still maintaining efficient visibility, communication, and Key Performance Indicators (KPIs). We’ll help you shift from the role of constantly solving problems to proactively formulating the ideal response to anticipated challenges.
Use CloudLogix for Transportation and Distribution Management
Our CloudLogix supply chain software platform serves as a central hub to connect and streamline your supply chain. All critical information becomes easily accessible so that you oversee the movement of every product in your supply chain.
- Enhanced communication allows you to get answers before there is a critical deadline.
- Increased visibility provides you with a clear view of shipments from beginning to end.
- Real-time data allows you to access key details about each order instantly.
With CloudLogix, you have the power to make informed supply chain decisions as they happen. You can actually get back to managing the supply chain and not constantly reacting to each new fire that comes across your desk. We’ll also help you identify cost savings on the path to profitable operations.
– We invite you to schedule a no-obligation demo of our platform. We’ll show you how the platform works, answer your questions about how we can help solve your transportation and distribution management challenges, and show you why a better supply chain is within reach.
We look forward to helping you manage a stronger, healthier supply chain!
