How to achieve cost savings in logistics and supply chain through visibility platforms
Logistics and supply chain costs are a major component of any company’s cost structure, easily accounting for 10% or more of global revenue. Rising costs due to fluctuating demands, outdated processes and more are putting even more pressure on companies to manage and ultimately reduce costs and stay competitive. To counter this, successful companies have been investing in digitization and modern technologies like visibility platforms and integrate it as a core component into their business model.
Digital capabilities: A prerequisite of a company’s success
Supply chain digital platforms have been steadily gaining traction within recent years. Providers promise more efficient operations, streamlined processes, and full transparency and visibility into global shipment flows. This theoretically smooth-running machine might raise some questions for supply chain leaders regarding cost. To many people surprise, these solutions yield incredible cost savings for those who choose to implement them.
The evolution of modern technology has been pushing the boundaries in logistics and supply chain, making the biggest impact in most recent years. The World Economic Forum found that,” while digitalization is fundamentally disrupting the logistics industry, it also has the potential to unlock around $4 trillion in value for the industry by 2025.” This figure can account for massive gains if supply chain leaders know how and where to invest their money.
It’s becoming more apparent that digital capabilities are a prerequisite of a company’s success, allowing organizations to compete at the highest level while keeping current and future costs favorable. Amazon is one of the most prominent examples of a successful company making technology a top priority in its success model. Technological advances such as those listed below have taken the industry to levels never imagined.
- Advanced data analytics
- Automation & robotics
- Cloud computing
- Visibility platforms
- Artificial Intelligence
- Machine Learning
These technologies assist companies in reducing, digitizing and, ideally, automating manual repetitive tasks and processes. Companies can realize significant productivity gains and free up valuable time by investing in the right technologies to ensure they can focus more on value-added activities and strategic projects. By cutting out the areas that aren’t efficient and in turn eat at your overall cost, your supply chain can see cost savings in real time, immediately. With specialized, user-friendly technological solutions available on the market today, shippers embed them in the daily decision-making process to balance cost vs service for all their shipments, customers, and suppliers.
How visibility platforms combat your cost complexities
Implementing real-time end-to-end visibility into your global supply chain saves costs. Through real-time visibility, shippers can identify the status of their shipments at every step of the journey, helping them plan their order placement more efficiently, avoid excessive storage costs and costly expedited shipments.
Technologies like TMS, WMS and ERP systems have been around for decades to help companies to manage and optimize their global supply chains and logistics. Through these systems, if deployed and used appropriately, shippers can control and reduce their costs. However, we’ve seen first-hand how these technologies often lack in interconnectivity and crucial capabilities like using comprehensive real-time information or predictive analytics for the effective management of a global supply chain.
More shippers everyday are turning to supply chain visibility platforms to assist them to control and uncover cost in areas such as:
- Global container movements
- Global inventory management and optimization
- Optimization of container utilization
- Detailed understanding and calculation of accessorial costs
- And many more
A visibility platform enables shippers to identify, select, and vet the best carrier in terms of costs, service levels, and transit time. By monitoring crucial performance metrics through real-time dashboards, companies take more control over their internal processes and partner network. Having insights into all facets of the global supply chain, companies can optimize their freight spend and reduce costs related to demurrage, detention, and extra storage. For shippers, maintaining a low cost per order is of utmost importance for improving their bottom line. A fully integrated visibility platform takes out the guesswork and instills confidence in the global supply chain being followed.
Save more than logistics and supply chain costs by investing in a visibility platform
Through investment into a visibility platform, companies can not only save costs but also improve customer satisfaction leading to increase sales. By leveraging data across multiple systems, visibility platforms provide soft benefits, such as enhanced customer service and reduction of manual interventions. These can assist shippers in reducing costly errors and help them grow new business without scaling their existing team.
The speed at which a shipper can respond to the ever-changing requirements of the market is crucial for business success today. Using a visibility platform, companies can better manage complexity, provide world-class customer service, and continually improve operational efficiencies.
Legacy technologies like TMS, WMS and ERPs have been around for many decades and are used in many companies for managing global freight flows and managing global logistics and supply chain operations while attempting to keep costs low. While these technologies come with many benefits, they lack some important capabilities and are in many cases not integrated with each other. This in turn becomes a money eating cycle since customization of these systems is expensive and takes time. Luckily, new modern technologies such as supply chain visibility platforms have entered the market to bridge the gap between seamless supply chain management and cost savings, allowing companies to adjust their global operations quickly and with less risks, leading to double-digits cost savings sustainably, increased customer satisfaction, and improved top and bottom line.