Tackling supply chain friction to achieve high-velocity supply chain operations

Companies across the supply chain have been laser-focused on improving visibility and increasing efficiency to lower costs and improve customer experience in recent years. In the process, all of these companies have come up against a familiar foe: friction.

“At a high-level, you can think of friction as the aspects of supply chain operations that slow us down, create delays and result in human error,” project44 Senior Director of Product Marketing Eric Fullerton said. “It’s all the elements that make supply chain professionals’ jobs more difficult than they need to be.”

On a day-to-day basis, friction is characterized by manual processes, inefficient workflows and high volumes of human effort. As supply chain leaders look to optimize operations and plan for the future in a down market, this friction stands in the way of transforming their supply chains from cost centers to revenue generators. 

“Even more than macro-trends, the primary challenge supply chain professionals face is the clunky tools and disconnected systems they use to get their jobs done,” said Fullerton. “Many of the solutions in use today were built for a different era and to solve fundamentally different supply chain ecosystem problems. These systems are rigid and fragmented – the result is many screens and siloed activities. To solve this, teams often revert to using complex spreadsheets to bring technology together, which creates even more challenges down the line. What teams need is something that brings new value while enhancing – not discarding – the technology investments they have already made.” 

While every aspect of the supply chain is affected by friction, these frustrating factors can have a particularly detrimental impact on visibility, transportation execution and facility management and last mile logistics. 

Manual track and trace is one of the many ways friction is introduced into the supply chain. These activities require a significant amount of human time and energy, while simultaneously providing subpar insight into shipments.

With manual track and trace, it is virtually impossible to provide an accurate ETA. It is even more difficult to access real-time insights into a shipment’s status and location as it moves through its transportation journey.

“It gets more complex when trying to gain a clear view of your in-motion inventory,” Fullerton said. “This requires a haze of complex calculations and fuzzy math, referencing your order management system and TMS to attempt to translate shipment events into inventory and orders. Before you know it, unexpected delays and exceptions emerge, clouding your visibility further.”

Transportation Execution

Friction is also created by common challenges encountered while moving goods, namely damaged cargo and unforeseen fines. These issues can take a serious toll on a company’s bottom line while simultaneously creating delivery delays that impact customer relationships.

“Overcoming these obstacles to restock and reship requires a dynamic transportation execution system,” Fullerton said. “However, friction strikes again. Inconsistent carrier performance, time-consuming processes to identify optimal lanes and visibility gaps turn transportation into a herculean task.” 

These issues often stem from a lack of actionable data. When shippers do not have access to accurate and holistics carrier performance analytics, it is impossible for them to make partnership decisions based on important critical details like on-time percentage for a given region or potential carbon impact.

Transportation execution is a sticking point for companies of all shapes and sizes, but it can be especially difficult when it involves to last mile delivery.

“As complexity rises, so do exceptions. Demanding consumers expect accurate, frequent order updates,” Fullerton said. “Fall short, and your call centers become overwhelmed, your customer service teams get swamped, and solving each request becomes a costly endeavor.”

Facility Management

No area of the supply chain is more plagued by friction than facilities. Yards and terminals are brimming with manual, error prone processes and reliance on paper for documentation, turning them into supply chain choke points. 

Current processes make yards expensive to run and inefficient to operate, said Fullerton. Scheduling and managing appointments is ineffective and there is limited ability to prioritize trailers and labor organization is inefficient, resulting in high overhead costs. The inability to identify which spots are open in which docks and the manual gate in process often results in trucks sitting in gates not knowing where to go, adding 4-5 hours of unnecessary latency.”

The High-Velocity Solution

Friction in one area of the supply chain creates friction in other parts of the supply chain. Overcoming these obstacles requires a truly modern and innovative approach to supply chain management.

“I think it’s fair to say that friction will never be fully eliminated from supply chain operations,” said Fullerton. However, there are tremendous opportunities to reduce friction where possible, targeting key points across the supply chain that will have transformational impact. At a high level, that means applying AI and workflow automation to these friction points to improve efficiency. Specifically, that could mean being able to view every shipment on every mode in every region, automatically connected to orders with SKU level detail, or fully automated gate in gate out processes combined with automatically unified appointment management informed by truckload ETAs to streamline facility operations. Or a centralized way to instantly access automated, instantly bookable spot and contract rates with metrics such as tracking percentage, on time percentage, or carbon emissions. By using technology to pull out the unnecessary friction from outdated processes – that’s what will give teams the ability to act quickly with confidence. Or in other words, achieve high-velocity supply chain operations. how teams can operate at high-velocity.”

project44 has worked to create a high-velocity supply chain solution with its Movement platform, which enables shippers to redefine their supply chains through next-level visibility, machine learning and greater connection. 

“Even more than being able to achieve key goals such as increasing revenue through better CX, decreasing supply chain cost, and increasing cash flow – modernizing and digitizing supply chain operations to enable teams to work with high-velocity will result in supply chain being a more attractive and compelling profession for the next generation of talent, said Fullerton. A technology-forward generation is not going to choose an industry or profession that heavily relies on paper to accomplish their daily tasks.”

Click here to learn more about turning your supply chain into a competitive advantage with project44

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Source: freightwaves - Tackling supply chain friction to achieve high-velocity supply chain operations
Editor: Ashley Coker