Effective Supply Chain Management: Increasing Efficiency For Transportation Companies
For all businesses, the aim is to widen the gap between cost and profit, to increase the bottom line. This requires brilliant cost management. It also requires good management overall including overseeing your organization’s available resources.
For transportation companies - or companies reliant on transportation - this means planning and optimizing the flow of your transportation and other costs related to your fleet and the movement of your product through its manufacturing all the way to the customers’ doors. All transportation businesses, thus, need effective supply chain management.
What Is Supply Chain Management?
For your business to have the final product presented to customers and clients, that product needs to go through numerous processes. It is manufactured from raw materials, packaged, checked for quality, and much more before finally getting delivered to a buyer.
A supply chain is an interlinked network of resources, companies, people, tasks, and tech systems involved in the product cycle. Supply chain management includes all the steps from the raw material stage to the supply of the product.
Supply chain managers have to make sure each link in this chain is as efficient as possible. This involves the manufacturing, shipment, and distribution of the product. Through supply chain operations management, businesses can reduce costs, create quality products, and get the products to customers quicker. Thus, the work of a supply manager is to control the:
Planning or supply strategies
Raw materials and service providers
Manufacturing and internal production
Returns and refunds for faulty or unwanted products
While the supply manager doesn’t need to manage all of these things single-handedly, they need to remain involved or have access to information related to these departments.
What Makes A Good Supply Chain Management System?
Effective supply chain management is about ensuring that all the steps in your product’s journey are efficient and as cost-conscious as possible. Creating an effective supply chain management system includes streamlining all your organization’s supply activities, helping you provide better service and quality for your customers, setting you up as a quality competitor in your industry.
Thus, strong supply chain management involves everything about the product from its development to its delivery. It also includes the information channels and resource allocation involved in making the product cycle function smoothly. Some of the qualities that make a good supply chain operations management system are:
If your system has these characteristics, you’re on the right track!
10 Tips For Effective Supply Chain Management For Your Transportation Company
1. Work With Reliable Suppliers
There is no doubt that trust is important in business. It is vital that your organization finds and works with suppliers that are dependable.
When choosing their suppliers, many businesses can make the mistake of picking the most cost-effective option. While costs definitely matter, reliability should be a bigger factor in your choice. You need suppliers that will not disappoint you, affecting the standards of your products and the value you provide to your customers.
When looking for the right supplier, conduct thorough research into suppliers that have a brilliant reputation in your industry. Try and identify suppliers known for keeping high-quality standards, good packaging, excellent customer care, and ethical and sustainable business practices.
2. Use Data To Reflect & Improve Constantly
Setting up your supply chain management system is not the final step. To make it effective, the system needs to be reflexive. In other words, you need to always reflect on it, improving and redefining it constantly. This continuous evaluation enables you to reduce costs by cutting out things that do not work. It can also increase the pace of your product delivery.
Data plays an important role in this reflexivity. Utilizing data analytics and insights can help you improve your transport management and supply chain management. Track-POD solutions consolidate information for you on individual trips including data on the distance covered and more. The data on your fleet, deliveries, and routes are kept in a Track-POD cloud database and can be converted into different file formats. With this insight, you can make smarter management decisions for improvement.
Essentially, you should never stop refining your system as the world is always changing. Always improve!
3. Prioritize Employee Development
Your supply chain operations management doesn’t exist in a vacuum. The workers in your organization play a vital role in creating and implementing strategies for effective supply chain management. This includes employees across different departments, from sales to drivers.
You need to invest in the growth and development of your employees so that they are capable of doing their best for your supply chain. Implement employee development strategies including training programs, workshops, webinars, etc.
Employee development should not just focus on onboarding, rather it should be an ongoing element of your supply chain management. As your systems change and your business expands, you need to also empower your workers.
For example, if you introduce a new delivery system to your fleet, you need to educate your drivers on how it works. Essentially, you need to ensure that your human resources are at their best so that they can do their best.
4. Have Numerous Transportation Options
This is not a must but it may be a good idea to have various vehicles in your fleet, as well as different shipping options. Of course, this also depends on the scale of your business. Larger companies that ship long-distance or internationally might consider air transportation. If your company tends to move heavy items, train shipping may be a brilliant option. Conduct research into the costs and logistics of different options and choose the best ones for you.
It’s also important to consider transportation options on a smaller scale. For example, it is not smart to send a large truck or van into a congested downtown city area just to deliver a small package. You need a variety of vehicles in different sizes to cater to the needs of your business and ensure smart and effective supply chain management.
5. Utilize New Technologies
Technology plays a huge role in optimizing supply chain operations management across industries. For transport companies specifically, utilizing technology has allowed transport managers to get the best out of the fleet and their drivers. Good transport management and effective supply chain management work hand-in-hand.
For example, if your company utilizes inventory management software, you can track product levels at different warehouses. This makes it easy to know when you need more products and to ensure that all cogs in the product cycle are aware of the deadline for new stock. On the other hand, it allows you to plan accurately for drivers to pick up new products. In addition to that, it gives you the ability to manage the fulfillment and delivery of customer orders. Everything is interlinked.
Thus, to create an efficient supply chain management system, you ought to invest in good transport management software, amongst other software solutions. Track-POD’s solution will allow you to integrate your other software for cohesive management, streamlining your supply chain management activities. Other technologies that are commonly used by transport companies include Blockchain, artificial intelligence, cloud computing, and the Internet of Things.
Technology streamlines your activities, reduces manual labor, and speeds up processes. This helps with faster customer service, quicker deliveries, and more effective policies overall.
6. Try Automation
Automation has established itself as a useful and practical technology for transportation companies. Your company should take advantage of the reduction in labor and workload that using automation has to offer. You can automate a variety of things from regular or recurring payments to emails and communications. Track-POD’s delivery software even enables you to automate driver allocations to available delivery jobs, as well as route planning to find the best routes to make the deliveries.
The technology completes the task much faster than you would if you were to do it manually. However, it is still a smart idea to check on the result. This is particularly important for routing, to ensure that the routes work.
7. Take Advantage Of Predictive Analytics
Technologies like artificial intelligence and machine learning can also help you utilize predictive machine learning. These technologies can predict precise data including the quantity and types of vehicles that your fleet may need within a stipulated period. You can also use it to predict other transportation resources needed in the future as well as sales trends in your company.
This enhances your supply chain operations management as you can get an idea of the exact resources you need, actively manage your resources and obtain logistics as needed. As a result, you’ll get optimum use of all resources, reduce waste throughout planning, increase sustainability, and cut costs.
8. Improve Returns Procedures
How do returns affect your transport management?
An effective supply chain management system must take stock of returns just as much as it prioritizes shipping and delivery. With an ineffective returns policy, you may have to grapple to find drivers and responses to a customer wanting to return a product. To avoid the wasted time and resources that go into trying to improvise on the spot, create and constantly improve your returns procedures.
You need to find a way to track the returns. One faulty product may not be an issue but if it is one of eight products returned in a short period of time, there is likely an issue either from your suppliers or in production. Thus, returns management helps you get an overview of where your issues lie.
Having a returns system in place also allows you the privilege of planning, meaning you can easily allocate drivers to retrieve the product and return it where it needs to go.
9. Keep All Actors Connected
Effective supply chain management is all about managing the supply network in your organization. Essentially, it is about keeping connected! And that is exactly what the Internet of Things (IoT) does - it creates connectivity! With IoT, you can streamline your activities and communicate effectively with all actors. IoT sensors on your vehicle can monitor data like the weather, external temperature, internal temperature, load capacity, proximal threats, and more.
Software solutions like Track-POD’s that have mobile applications that function across IoT devices ensure better communication and connectivity. On the Track-POD app, managers can communicate with drivers and drivers with the delivery clients.
The app also provides real-time updates on the driver’s location and makes real-time updates to the route avoiding upcoming traffic and other issues. This is an important feature for delivery as it allows for the monitoring of driver trips and it enables you to provide more accurate ETAs to the customer. Plus, the cloud-based document database creates accessibility for everybody.
Thus, IoT and cloud computing are important for decision-making, accessibility, connectivity, great communication, and, above all, brilliant customer service provision.
10. Plan Shorter & Safer Routes
Through route planning or route optimization, you can create safer routes that have the shortest or fastest path from the warehouse to the delivery destination. Whether your driver is delivering an order to a customer or moving products to the warehouse, it is vital to plan the driver’s routes.
Track-POD’s route optimization software finds the best and safest routes by taking into account factors like traffic, bad roads, congestion, the size of the delivery vehicle, and more. Your supply chain can get fantastic benefits from route optimization including:
Decreased fuel spending
Maximized time and resources
Vehicle safety and maintenance
Improved driver safety
Better customer service
Boosted driver confidence
These benefits are a recipe for success!
Logistics and supply chain management take oversight and an understanding of the complicated network that comes together to create and deliver a final product. Creating an effective supply chain management system can be a taxing and difficult endeavor. However, these ten tips can transform how your business handles its supply chain for the better.
One thing’s for sure, the techniques and tools identified here will make managing this network a whole lot easier and smoother. Rely on the brilliant Track-POD solutions to make sure there’s a lot less work and stress for you!