Barcelona, May 17, 2022.- This statement is from the magazine Supply Chain 247, which for the coming months points out the following keys for all logistics and transport professionals:
Over the course of the pandemic, a lack of diversification caused many supply chains to be less resilient in the face of delays and cost increases.
Shipping costs have risen by as much as 600%. Most buyers with global supply chains primarily source their suppliers from China; having no alternatives, their supply chains face sudden, costly, and sometimes long-lasting, disruptions.
By putting all their eggs in one basket, businesses risk having a single point of failure that negatively impacts revenue. Diversifying the pool of available suppliers across various regions reduces production and sourcing costs and improves resilience.
While diversification cannot happen overnight, and can often be challenging for organizations heavily dependent on certain regions, businesses can rely on Multi-Enterprise Supply Chain Business Network (MESCBN) Technology to make the integration and onboarding process easier.
Supply chain software that unites multiple supplier networks into one platform also enables efficient supply management through continuous performance optimization over inbound management for faster and higher ROI.
Despite supply chain disruption, most businesses still rely on the just-in-time (JIT) model, which attempts to minimize delays and costs by moving materials right before consumer demand requires it. By doing so, companies have traditionally been able to decrease costs both on storage and the transport process.
However, lean inventories require an intimate knowledge of the organization’s supply chain, and an improper balance could lead to unwanted surprises on the consumer side. Businesses often attempt to offset the downside of a JIT supply chain model with safety stock, but the pandemic has shown that ensuring sufficient safety stock has been less than optimal, let alone being able to adapt to demand increases.
As businesses optimize their inventory management (particularly within industries such as tech or automotive), it will require a custom-tailored approach to their current lean inventory strategy.
Supply chain cloud platforms can provide invaluable assistance for inventory optimization, particularly as organizations expand and work with multiple parties. With a centralized overview of all inventory, even if it’s in transit or in 3rd-party locations, decision-makers can make dynamic changes to their supply chain in real-time. With increased insights, businesses can better forecast stock, allocate inventory to specific demographics, and proactively match supply through dynamic order planning.
Lower Logistics Costs
As mentioned earlier, the costs of shipping and logistics are forecasted to continue rising in 2022. A combination of inflation, pandemic recovery, other global events, and increased shipping demand has led to sharp rises in contract rates across the freight sector. In fact, for parcel delivery services, the rate increase is the highest it’s been in almost a decade. No matter the form of shipment, transportation demand will likely continue to increase throughout the rest of the year, if not into 2023.
With most, if not all, of the leverage lying in the hands of the freight sector, companies are aiming to become more resilient by managing costs through tighter control of daily operations. For example, multi-party control tower platforms offer extensive cost control capabilities with granular, real-time visibility into each node of the supply chain, continuous optimization across order planning and execution, and dynamic invoice matching.