For shippers and carriers to increase efficiency or lower costs, they must focus on variables that can be controlled and optimized. In fact, almost all of logistics gains are realized by focusing on three key areas: Process, Planning and Communication.
1.) Controlling For Process.
The most significant shifts in logistics processes over the past decade have revolved around digitization. Companies that have embraced the digital revolution are reaping benefits across the board, from increased efficiency and reduced costs, to better predictability, enhanced precision, and a reduction in other costs that don’t necessarily appear on your freight bill.
“People want to make digitization sound complicated, but you’re really just trying to make things fast and easy,” says Cathy Roberson, founder of Logistics Trends and Insights, LLC, a global logistics market research company. “It’s not a cure-all, but it can do wonders for efficiency and reduction of manual tasks that take time and cost you a lot of money.”
Making a digital transition (if you have not already) is the biggest differentiator in today’s logistics market, followed closely by the ability to automate your processes to streamline workflows, allow data and information to flow freely between you, your customers and your shipping partner, and use the resulting knowledge to plan more effectively for the future.
2.) Controlling For Planning.
Today’s most effective manufacturers and retailers integrate transportation partners early in their planning processes, making them an extension of their business. By integrating shipping at the earliest stages of product planning, you ensure that manufacturing execution matches shipping execution, with no surprises anywhere along the line.
This joint planning goes well beyond simply quoting rates and slotting schedules, and it has the overall effect of lowering total cost of transportation (which takes into account all costs associated with shipping). When carriers are brought into the process early, they can execute more effectively, generating fewer additional costs down the line in the form of fees, fines, chargebacks, and disputes.
3.) Controlling For Communication.
If planning is about the future, communication is about the present, and can be one of the most significant differentiators when it comes to shipping effectiveness. Good carriers don’t just move goods, they move information. Communication is a critical, yet often underrated element for excellence between shippers and carriers, and can make the difference between smooth, on-time shipments and a bumpy, headache-ridden experience.
The digital revolution has also been transformational in several areas around communications. The more of the process that becomes digitized, the more that can be automated, and the more that communication can happen instantly and effortlessly, preventing errors and improving productivity.
The key to robust communication is a combination of effective digital tools backed up by a strong personal relationship with your carrier so you can stay abreast of the latest without losing control.