Progressive Supply Chains Deliver an ExperienceWritten by Neal Willis
The traditional supply chain model, which has typically been reactive and transactional in nature, has always placed a heavy emphasis on cost cutting. Changing consumer behavior and a demand for customization, however, is transforming the traditional model into one that focuses on the overall customer experience. The result of the more customer-centric approach is an emergent descriptive supply chain model characterized by large amounts of data, real time shipment visibility and proactive notifications.
Traditional Supply Chain Model
Reactive Response – The traditional supply chain has been mostly reactive. Instead of working to prevent problems up front, shippers tend to react only when a problem occurs and often handle issues midstream as best as possible.
Mostly Transactional – The traditional model places emphasis on rate shopping for least cost. Multiple carriers and brokers are used to help shippers find and tap unused capacity at low rates, and brokers and carriers happily settle for handling only a fraction of the total business and earning a few bucks here and there.
Low Cost Emphasis – Cost cutting initiatives and saving money is the primary focus and the least cost method of delivery is always the favored choice. Blind bidding of freight is common practice and shippers consistently send out RFPs to multiple providers. Carriers participate in bidding wars and shippers pit providers against each other and beat them up on price.
Descriptive Supply Chain Model
Focus On The Overall Experience - Modern consumers want customized solutions with an abundant amount of delivery choices. They want things delivered on their terms and, if for no other reason than because it’s possible, they want to know where their shipment is at all times. Consumers are using data and the internet of things to make optimal use of their time. They expect to have access to real time shipment information provided by things like RFID tags and Cellular and GPS tracking devices.
Instead of waiting for a delivery to arrive within a pledged window of time, such as by 5 PM on a certain day, consumers are tracking shipment movement and determining more precise arrival times, which keeps them from idly waiting around when they could be doing something else productive. Once they see a shipment is nearing its destination, they make themselves available and, at times, the shipper will arrive at the destination at nearly the same time as the shipment.
Rather than settling for the traditional low-cost delivery model, innovative shippers are adopting the descriptive supply chain model and embracing new technology. They’re giving customers a pleasant overall experience.
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