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TOP FIVE WAYS COMPANIES PLAN TO AVOID DISRUPTIONS TO THEIR SUPPLY CHAINS

Leverage Multiple Transportation Modes

Continual examination of modal mix is critical to running an efficient and resilient transportation network. Supply chain managers should analyse their freight networks
at least twice a year for optimisation opportunities to ensure all freight is moving on the most optimal mode possible. Identifying and converting sub-optimized freight to its best-suited mode leads to cost savings, productivity gains and protects against disruption. If you seek to minimise supply chain disruption, shifting eligible freight from the highway to intermodal rail can be a powerful solution to mitigate risk and lower overall transportation costs.

Use Back-Up Carriers

The trucking industry will face increasing headwinds in the coming months and years that could signi cantly impact the industry and affect over-the-road capacity. The driver shortage is only getting worse, and pending regulations could quicken and exacerbate the shortage. Having a breadth of carriers to rely on can mitigate the risks associated with a single point of failure when the market shifts.
GROW YOUR BUSINESS IN 2017. PROTECT YOUR TRANSPORTATION NETWORK FROM DISRUPTION.
Contact one of our transportation experts for additional information on how to implement transportation network optimisation strategies in the coming year.

U3tilize Strategic Partner Carriers

Logistics is about planning for the unexpected. Any number of internal or external factors can disrupt a supply chain’s productivity. Having a contingency plan in place before the pendulum swings insulates networks from disruption. Utilising the strategic transportation partnerships of Intermodal Marketing Companies (IMCs), third party logistics providers (3PLs) and multinational trucking providers as well as developing strong relationships with the railroads, can help shippers stay ahead of the curve and take advantage
of the most efficient modes of transportation available.

Shift Freight to Alternate Ports

After the port strikes of 2014, some companies shifted freight to various, alternate ports. While the expansion of the Panama Canal isn’t set to have a major impact on high-value, time-sensitive freight, it could prove beneficial for lower-value freight with longer lead time. Exploring new channels and creative distribution tactics can be financially beneficial.

MOVE Old Inventory Closer to Consumption Markets

As consumers’ expectations around free shipping and returns continue to grow, organisations are rethinking their distribution networks and inventory strategies. Companies are experimenting with using brick-and- mortar stores as mini-distribution centres, while others are moving distribution hubs closer to major consumption markets. Companies who are able to effectively manage and distribute inventory to the right place at the right time will enjoy significant efFIciency and productivity gains.

Navigating the Complexities in Logistics through Supply Chain Visibility

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With the proliferation of technology that is intended to give great focus on the supply chain data, the ability of companies to get an access and interpret crucial business information is no longer an added feature. In fact, has become a necessity. Being able to get a grasp on better supply chain visibility is like having the ability to recognize significant role of gauging the current location of the shipment, delivery schedules, and inventory levels as well as how companies were able to satisfy the demands.

Since running a supply chain that transports hundreds of thousands of products had come up in an entirely new perspective. It became imperative that companies should be able to navigate these complexities on keeping an eye on the plummeting inventories, innovations, and hike in the customer expectations, the need to improve the quality and levels of service as well the occurrence of uncontrollable events.

With the growth of the e-commerce platform and the fulfillment in the omnichannel, shorter lead times and amplified client expectation when it comes to product shipping, this has resulted to the need of improving the supply chain visibility. In order to meet these pressuring demands of the market, the manufacturing companies, retailers as well as distributors were advised to invest on logistics and on supply chain management technologies for them to be able to compete in the dynamic market.

Being able to have better visibility on the supply chain enables companies to adjust effortlessly and be able to embrace the demands of the customers. It helps in mitigating disruption, where companies can pre-plan any possible disruptions and be able to react positively if by any chance the situation occurs. It enables them to dynamically plan and adjust on their ready-made supply chain design that includes the contingency plan in managing certain emergencies.

With this in hand, it serves as the company’s advantage over others when it comes to dealing with unexpected situations and emergencies especially if this is worked with third-party logistics (3PL) for the reason that many companies have no direct internal control, proper technologies as well as competencies to meet both ends.

Since there’s always a big challenge to conquer in e-commerce and omnichannel at present, having the 3PLs around to provide outsourced fulfillment services for various order types, transportation modes, shipping windows, and delivery schedule at a competitive price, is ideal in this industry. There are third-party logistics providers that provide services for distribution, packaging, transportation management, the design on the supply chain, and deployment of the logistics system.

And to make the navigation of the complexities in the supply chain visibility become a success, here are the effective steps to keep the retail or wholesale operation on track:

  • Utilization of latest technologies in order to capture crucial supply chain data
  • Evaluation of products and accumulation of supply chain to move goods more efficiently to the fulfillment center.
  • Setting up of supply chain routes, modes of transportation and networks of logistics to accommodate a plethora of products based on the source point.
  • Application of advanced technologies on analytics, tracking and planning to ensure direct control, custody and care of goods where demands are planned and the disruptions are mitigated.
  • Compliance to rules, regulations, and practices in the industry and country the product is intended to.
  • Collaboration with the most trusted and reliable third-party agencies that specialize in engineering, operation and integration of systems in managing the inventory across the supply chain.

The 3 Key Takeaways of Reshoring and Why Manufacturing Companies Have to Consider Them

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Many major manufacturers are moving their productions from one country to another all at the same time. And this is due to the following reasons: the labor cost, skills of the laborers and the market access.

Although reshoring is now a major move on most companies who have decided to offshore certain operations in the previous years and now trying to bring other activities in their home country. According to many logistics experts, the move is not huge but it is prevailing on some manufacturing companies.

Considering the factors aforementioned, logistics expert view these reasons as a driving force for many US manufacturing companies to go reshoring. And it’s not surprising that a lot more companies will look for greener pastures on developing countries that have low labor cost, high-quality workers, and bigger market access.

However, for the reshoring expert Rosemary Coates, who is also the executive director of the Reshoring Institute – reshoring is not as simple as turning the lights off from one locale and setting up in another location for the reason that there are certain considerations that manufacturing companies should give attention. And upon considering the following key takeaways, that’s the time companies should decide whether reshoring is the right thing to do or not.

1 – The Total Cost of Ownership – Manufacturing companies can’t just leave one location for another unscathed. There are certain conditions that have to be met before they could move out. In some countries, reshoring companies has to apply for an exit as this serves as the protection of the citizens in the country. For instance, one or two-year agreements should be provided to the local workers so that in case you want to reshore, you could buy out their contracts.

Another is IP investments. The equipment that has been brought overseas for manufacturing will automatically be considered as a gift unless otherwise the serial numbers are clearly stated in the contract. In case the IP on the equipment and tools had expired, expect that these will be used for manufacturing purposes by the others with no brand of yours on it.

2 – Availability of Skilled Laborers – This has been one of the major dilemmas of some companies like General Electric or GE, a white appliance manufacturing company have encountered when they reshore to another location but opt to hire Americans to do the labor. However, the problem occurs after three days where the workers they hire are eventually got fired for the reason that they want to do the labor task or is not that skillful to perform the task. Finding skilled workers and retaining those are some of the dilemmas that GE had encountered plus the fact that there’s also a big issue when it comes to labor cost. In fact, to enable the GM to hire people that will accept the wage rates that is lower than the usual; the union has made major concessions.

3 – Readiness to Automation – The wage gap between the US and China has indeed got narrowed, but it never disappeared. Even so, if your aim is to get low-cost labor out of the production, this can be done by automating the processes used in manufacturing through robotics, 3D printing, and other automated technologies. Companies should aim at the cross-over between the manufacturing and engineering for the reason that reshoring could not bring back the 100% of the jobs that was lost from off-shoring. Yet, reshoring is not that a bad thing if worst case scenarios have already been anticipated in the decision-making stage.

Aiming for a Result-Driven Logistics? Know How 3PLs can Make a Difference

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Recently, the 22nd Annual Surveys of Third-Party Logistics Provider or 3PL industry leaders have revealed the current trends in the Supply Chain Industry. The survey, which was sponsored by a third-party logistics provider, have divulged an important information about 3PL CEOs that are enthusiastic with the current state and the future revenue growth that is possible on both their companies and other regional 3PL industries.

The annual survey that includes 30 CEOs from world’s largest 3PLs realized that there are more than 80% of the companies that was surveyed had a profitable moment in 2014. It was found that CEOs from the North America and Asia-Pacific Region had three-year revenue growth averages for their companies of 7.85% and 11.50% while the European CEOs have managed to forecast a 5.33% growth on the same period.

With the impressive growth in revenue, the two leading regions were also asked to project their regional industry revenue growth rates for the next three years, wherein North America reveals a projected growth of 5.92%, European CEOs with 4% and the Asia-Pacific CEOs with 5.75%.

The great news for the 3PL in the Supply Chain industry is inevitable since according to the president of a 3PL service provider, the 3PL industry continues to deliver value, cost-effective solutions and great efficiency through the close collaboration of the customers and the providers – thus enabling them to rapidly adjust from the economic conditions, business challenges and in meeting the consumer online shopping needs that requires new and agile supply chain.

Other than this, more and more companies are seeing the bright idea of entrusting the logistics on third party logistics service providers as it gives them many benefits such as being able to reduce the operational costs, and more importantly, allowing the company to focus more on their core competencies.

The hype of having 3PL firms to do the logistics for companies in various industries is that it adds to the bottom line of the customer and the supplier. This is made possible by having supply chain management solutions that involve accurate, organized inventory and optimized supply chain management system.

Some economic advantages of opting for the logistics services provided by 3PLs are;

  • Elimination of making capital investments to infrastructures.
  • Acquisitions of logistics expertise where total delivered costs are minimized.
  • Through advanced planning and management, reducing the inventory costs becomes possible.
  • Users were able to increase their access to global resources, services, processes, and technologies.
  • Scaled economies through resource-sharing, discounts on volume shipping, and increase in shipment visibility.
  • Enhancement of adaptability and flexibility of companies to respond to the changes in the world market
  • The addition of value to the manufacturing and marketing operations due to accurate and timely data reporting.
  • Improvement in the quality of customer service via shorter shipment times.
  • Logistics operations and total logistics cost become measurable and scalable because they can now be identified
  • Impressive gains in the productivity through the application of technology when managed effectively.

These are some of the profound benefits of having third-party 3PLs around to do the logistics works for companies who are struggling with the manufacturing and distribution costs. Which is why as much as possible, companies are highly advised to have their logistics outsourced to third-party 3PLs to ensure the growth of their revenue in the coming years.