Improving Supply Chain Visibility Through an Integrated Transport StrategyWritten by Neal Willis
For companies that are geographically spread out with locations in different regions, supply chain management can be challenging, especially when it comes to getting everyone on the same page with real-time information. Communication with carriers and vendors tends to get complicated when several different people from several different locations and companies are involved.
A decentralized transportation strategy involves shipping decisions being made at each individual location and shipping costs often paid at the site level. The transportation strategy of one location may be entirely different than others for numerous different reasons. One location might plan and execute their transportation strategy out of necessity while others might plan and execute differently based solely on their comfort level with certain transportation providers.
When different locations are employing different strategies, insights and reporting can be inconsistent and policies and procedures can be sporadically used and enforced. With the freight spend stretched out across multiple carriers and providers and decisions being made at the site level, purchasing power isn’t fully leveraged and the picture being painted at one location doesn’t always accurately illustrate what’s happening in the big picture across the whole organization.
Centralized Transportation Strategy Benefits
Centralizing your transportation strategy can often yield optimal savings and efficiencies that wouldn’t otherwise be obtainable, and a centralized transportation management system (TMS) strategy coupled with the benefits of TMS solutions can yield heightened supply chain visibility through numerous channels.
- Consistent, Accurate & Reliable Communication
- Administrative & Operational Efficiencies
- Error Reductions
- Insights & Reporting
- Lowered Shipping Cost
A TMS is a subset of supply chain management (SCM) that allows users to manage and optimize the daily operations of their transportation fleets. With a centralized transportation strategy, vendors, carriers, customers and coworkers send and receive information through one source that is both accurate and consistent. With decisions and information being centrally made and located, a centralized transportation management strategy has many different advantages over a decentralized transportation strategy, including administrative and operational efficiencies, lowered shipping costs and enhanced supply chain visibility.
Shippers reduce and eliminate unexpected freight costs and having to pay marked-up freight rates with control over inbound shipments, and they’re able to leverage the purchasing power of all locations as one. When inbound shipments are controlled by different vendors and locations, shipments aren’t always routed optimally, and real-time information can be lacking, scattered and inconsistent.
By centralizing communication and control over inbound freight shipments and routings, shipping costs are lowered, and supply chain visibility is enhanced with an added view of the inbound freight operations and data.
With better visibility of shipment movement, companies can more efficiently plan their workdays and schedule staff according to expected shipment arrivals, and the likelihood of making mistakes is reduced because fewer people are involved with data entry. Shipment information that’s historically been housed locally at multiple sites is centrally located and readily accessible to anyone and everyone across the company.
One of the fastest ways to plan and execute a centralized transportation strategy is with the deployment of TMS solutions. TMS solutions can often provide greater supply chain visibility through insights and reporting while helping to lower shipping costs with shipment routing tools and technology.
There are many different types of TMS solutions that specialize in various integrated transport strategy solutions and services and, depending upon your objective and goals, you may have to explore several different TMS solutions before finding what’s right for your situation.