How these three actions can help your company understand basic logistics concepts and reinvent itself so that its distribution networks become more flexible and meet customer expectations.
Logistics can be tricky.
In a world where your Amazon order comes in the same day or the next day, customers are demanding more from all of their suppliers. This forces companies to struggle to keep up with customer expectations and forces them to reevaluate – and reinvent – their distribution networks to make them more flexible. Not only is customer satisfaction at stake, but in an unstable world, logistics costs can easily spiral out of control and jeopardize financial results. Striking a balance between customer service and cost is what determines a successful logistics operation.
A good way to understand the fundamentals of logistics
Is to use an industry-proven supply chain concept:
Discover, solve, and execute. Discover Logistics managers are at the mercy of uncertainty. Crashes and random events can happen when you least expect it. Bad weather, labor disputes, trade wars, and political unrest – to name just a few – can happen without warning and create a disaster for the supply chain. Check here the best Global Logistics at CNLogistics.com
Early detection of such failures is critical for logistics operators. When supplies are late or inventory drops, they want to know as soon as possible so they have more time to fix the problem and minimize its impact. The good news is that the latest generation logistics platforms can automate supply chain monitoring and detect adverse events in a timely manner. For example, Oracle’s global trade management solution can notify managers when trade agreements change, such as when tariffs change from 5% to 30%, or vice versa. In light of the recent tariff wars, this ability may be game-changing to some extent.
New technologies can detect supply chain problems in real time.
For example, companies are constantly equipping their trucks with IoT sensors to track their movements and even monitor conditions inside the cargo bay. If deliveries are delayed, logistics managers know immediately and can quickly decide what to do. Or, if the temperature rose in a truck carrying sensitive drugs or fresh food, managers could assess the potential damage. Make a decision Not all supply chain disruptions are emergencies. Late arrivals do not matter if the delivery window is large. But when a container ship that is about to sail can be missed by a truck, the consequences can be more significant. The same is true for trade agreements: what can companies do in the event of unexpected tariffs to minimize the financial impact? It’s time to make decisions. Have you changed routes, made purchases in a new country, expedited delivery, or opened new warehouses? All of these options are used when you are trying to deal with a supply chain disruption.
Organizations must have the tools to deal with a wide range of disruptive opportunities. This is where cloud-based logistics solutions can help guide decision making. Let’s say you usually travel through the port of Los Angeles, but suddenly a labor dispute closes it. Moving to Seattle? Oracle’s cloud-based logistics network modeling solution can simulate the impact of different scenarios, providing an estimate of what a change will mean for lead times and costs.
It won’t prevent disruption, of course, but you now have a quick way to understand and quantify impact, evaluate alternatives, and choose the best way to avoid disruption. Other tools can help you optimize your global trading networks. Oracle Transportation Operational Planning Cloud can, for example, analyze the change in shipping costs if you plan to purchase raw materials or products in another country.
Are you looking to save money by avoiding high tariff zones or by taking advantage of trade agreements that offer discounted rates that save you money? Next-generation platforms like Oracle Global Trade Management Cloud can automatically analyze your core product against all trade agreements around the world and let you know what you will save if you change country.
This is a cumbersome task if you are browsing thousands of products and reading hundreds of offers. This is now a quick and automatic process. Please be aware that some crashes are caused by your own decisions. For example, suppose you want to grow your business by serving customers in a new market or increasing frequently.
When it comes to execution, this is the part of logistics where theory is put to the test. This is when you put your decisions into action – and this is almost always easier said than done. Why? Mainly because the people who collect and ship don’t necessarily work for you. You often need to coordinate the execution of multiple third parties, including trucking companies, manufacturers, third party logistics providers (3PLs), and multiple independent warehouse operators.
With all this uncertainty, it’s no surprise that logistics professionals have earned a reputation for being good firefighters. But if you want your company to perform well, you do not want to be a “firefighter”, but one who prevents “fires”. In other words, it is better to install smoke detectors than running around with a fire extinguisher.
When you manage to build a modern supply chain with robust decision-making and analysis capabilities, the executive side of the equation becomes more flexible, predictable, and profitable. For example, in the consumer products industry, the savings gained from a flexible and efficient supply chain can make a difference whether you get money from a product or not. The result: When you do the logistics right, then your investment in discovery and decision making really pays off.