Growth in world trade continues to exceed by far overall economic growth. With a changing decision environment and a lack of clear information to help guide the decision process, Supply Chain managers are confronting distressing challenges to the smooth and cost-efficient flow of goods across the globe, but at the same time, they come across with great opportunities and challenges to achieve Logistics Excellence on a global scale, as long as those supply chains and global Logistics organisations put in place the people, processes and technology required to deliver world class cost and service performance.
The Transportation and Logistics industry forms the pillars of modern global supply chains. Airlines and airports, shipping companies, Logistics service providers and other Transportation companies are all part of the process to keep people and products on the move. Going global means adding time and distance to your Supply Chain. Those two factors add cost, complexity, and frequently risk, especially when the product being moved will have to go through numerous steps from manufacturing to delivery, involving multiple governments, companies and third party service providers.
Logistics systems and Transportations have a more and more important interdependent relationships that Logistics management needs to perform its activities. Since transportation contributes the highest cost among the related elements in Logistics systems, the improvement of transport efficiency could change the overall performance of a Logistics system. Without the linking role of Transportation, a powerful Logistics strategy cannot bring its capacity into full play.
The development of Logistics will be still vigorous in the following decades and the Logistics concepts might be applied in more fields. It becomes a formidable challenge for organisations to manage these Logistics flows effectively, especially when coordinating each step and connection in the Supply Chain, but they are getting nearer to the level of capabilities that lead to operational excellence.
10 Capabilities that companies striving to achieve global Logistics Excellence must develop.
1. Fully deploy data analytics and digital management that include tools needed to capture and store data effectively; an analysts who unlock insights from data, and the pathways need to transform those insights into operational realities, plus the implementation of advanced customer-facing digital tools. Diagnostic tools that can be valuable as a mechanism to identify areas in which you are operating strongly, as well as areas that need additional attention and support.
2. Well automated global Logistics processes software engines that are required to make optimal sourcing and Logistics decisions, and to ensure that execution is aligned with upstream sourcing decisions, as a one key metric. Global Logistics leaders have deployed technology that greatly automates many of these manual booking processes, managing global Transportation involving multiple parties with greatly varying levels of technology.
3. Enhance network agility and support capacity management. Develop your own local shipping networks or use third-party networks, taking advantage of more dynamic approaches to pickup and delivery of goods. Integrated international and domestic workflow. Logistics leaders are deploying technology that enables them to have a single “work space” that contains both functionality and data across internationally. The concept of the centralised transportation management, well established in many companies on the domestic side, to expand along with the technology to embrace the full spectrum of global and domestic transportation requirements.
4. End-to-End Visibility - By deploying a robust, real-time visibility system, a company is able to manage a totally outsourced global Supply Chain with a relatively small corporate staff; visibility tools enable a company to find and drill down on information from many points of reference, facilitate the development of “role specific” system configurations in order to meet the information needed by managers in Transportation, Purchasing, Inventory Management, and other areas of the business, or by the use of direct EDI, bar code scanning, and perhaps soon RFID.
5. Supplier Portals and ASN capabilities - Many process, language, and relationship barriers exist when trying to better integrate offshore suppliers. Nonetheless, the availability today of web-based supplier portal technology to improve integration and visibility with overseas (as well as domestic) suppliers means the opportunity to address these issues.
6. Identification regulatory and security compliance – Applying an approach that recognises security and regulatory trends and that protects companies from fines or other penalties, delays in the movement of goods inbound and outbound or from a variety of causes, in order to both improve the flow of goods, as well as protecting themselves from the impact of external threats and potential problems. Savvy companies will be at the head of the line in making investment in developing highly secure Supply chains.
7. Dynamic Routing – Companies should start to develop more dynamic routing capabilities that will allow them to access the most effective combination of carriers, routes and third parties that will meet delivery constraints, more consistent with how domestic transportation is managed; having the flexibility to dynamically determine inbound or outbound routings.
8. Variability Management - International shipments inbound or outbound are subject to considerable variability in delivery times. Global Logistics leaders use Supply Chain data and performance management systems to better understand both the level of supply variability and the root causes of that flux.
9. Integrated Planning and Execution Platform - One of the challenges of global Logistics is that the information that decision-makers need tends to be in multiple places, and is hard to access. - We believe Logistics leaders are deploying technology that enables them to have a single “work space” that contains both functionality and data across the full international planning and execution lifecycle. Access to common applications and data provides for an integrated workspace for all stakeholders of product goods delivery; performance measures and reporting, further by providing even more dynamic information and decision. The powerful result: end-to-end optimised global Logistics control and cost minimisation.
10. Financial Supply Chain Management - In global Logistics, however, the “financial Supply Chain” can be much more directly linked with the physical and information flows. Financial related capabilities must often be mastered to expand the network of potential trading partners on both the buy and sell sides. A more advanced area of Financial Supply Chain Management relates to development of a “tax efficient Supply Chain.” - total tax liability can be significantly impacted by the country from which a product is sourced, where and when value is added to the product, the physical flow of the goods, and who takes ownership.
For a variety of reasons, companies have moved into global Sourcing and exporting programs without fully understanding the complexity of the planning and execution requirements, and with insufficient technology support.
However, it is also clear that for too many companies this scenario results in much higher costs than expected, significantly reducing or even eliminating the estimated benefits of global strategies. This lack of technology support contributes strongly to the challenges in controlling costs and executing effectively. - The robustness and functionality of the software is consistently improving, in relation with the growing customer demand for global Logistics solution. As always, the result is dependent on the mix of people, process and technology.