logisticstechoutlook

Best-in-Class Enterprise Logistics Providers Drive Competitive Advantage

By Chris Baltz, President & CEO, Transportation Insight, LLC

Chris Baltz, President & CEO, Transportation Insight, LLC

The supply chain is inherently complex. Producing economic profit and shareholder value through supply chain excellence is increasingly challenging as the intricacies of logistics continue to grow. Being able to secure an end-to-end view of the supply chain with visibility to product, processes and events that occur across a company’s transportation network is often the differentiating factor between a company being the dominant player in a market or an also-ran. In addition, many companies are on a quest to gain market share or expand service offerings through acquisitions, while becoming more agile to meet increasingly dynamic customer demands. To meet these challenges, corporate leaders are seeking a partnership with a best-in-class Enterprise Logistics Provider to achieve competitive advantage and transform the supply chain. Leveraging technology and applying Extended LEAN®, Transportation Insight’s proprietary continuous improvement methodology for the supply chain, is paramount to gaining efficiency and visibility of all supply chain touch points. These gains foster improved enterprise productivity and can provide actionable business insight that helps organizations measure against short-term and long-term growth goals.

“A high-level extended value stream map (VSM) visually depicts where opportunities for improvement exist in particular processes along the supply chain”

A world-class supply chain demands technology-driven insight that spans from the shipping docks to the board room. Through logistics technology, strategic enterprise partners provide the needed information, collecting myriad data at the most granular level. As a result, CFOs and Operations leaders can see inside their own trending. They can see what costs and margins are up and down, which clients they serve at an unprofitable landed cost and those accounts that are highly profitable. Popular first steps toward viewing and analyzing such data often involve leveraging structured data in spreadsheets and databases to improve supply chain visibility, geo-location/ mapping and product traceability. But there’s more than data collection to a Big Data solution–the system must deliver meaningful analysis that spawns corrective action. One such system is Insight Fusion®, Transportation Insight’s interactive business intelligence portal. Insight Fusion translates massive amounts of supply chain data into an interactive format that provides visibility to trending and Key Performance Indicators, either from a global perspective or any number of other more specific parameters. Insight Fusion can also deliver static, periodic reporting that shows executives where they are in compliance and which facilities are following an optimal supply chain roadmap.

Senior executives play a critical role in ensuring that best-in-class 3PLs bring systems, processes and intellectual capital to companies in a co-managed environment. Transportation Insight’s non-invasive Co-managed Logistics® model brings horsepower directly to the client and allows them to pull the triggers every day without disrupting their existing platforms and carrier relationships. Leveraging Transportation Insight’s visibility platform, executives can identify locations or vendors that are operating out of compliance and encourage corrective actions such as the selection of least-cost carriers and modes. Giving executives as much visibility as possible into their own company and its supply chain practices is the key to a successful 3PL relationship.

Whatever occurs within an organization, those that in source–from small and mid-size manufacturers, distributors and retailers to Fortune 500 companies–can benefit greatly from logistics technology. The resulting business insight obtained through supply chain data collection and analysis. With this key information, companies can map out customer activities and know where to reduce cost-to-serve for certain clients, improve service to other clients and grow the organization in the process.

While some enterprises want to wait to engage with a 3PL after the dust settles on a merger, an ideal time for companies to consider the services of a 3PL is when they are considering mergers or acquisitions. At that time, a 3PL can help a company re-engineer its supply chain, creating a map of what the company should look like post-transactionin terms of servicing clients. Companies then assimilate that analysis into their own examination of the ROI on the actual merger.

A 3PL that approaches a company with a listening, assessing style brings the most benefit to shippers. Rather than forcing a technology solution on a company to fit an array of different challenges, the 3PL should completely understand how the supply chain integrates with every other operational area of the company. Whether through order-to-cash, procure-to-pay or raw material to finished goods, the 3PL should collect information about process flow to determine the solution that best fits what companies are trying to accomplish. The best answer only presents itself when a 3PL combines intimate data analysis with an accurate picture of the value stream in its current and desired future state developed through the lens of ExtendedLEAN.

A high-level extended value stream map (VSM) visually depicts where opportunities for improvement exist in particular processes along the supply chain. When the extended VSM is overlaid with supply chain analytics, proactive and predictive strategies emerge. The extended VSM illustrates the importance of a tightly aligned network between all supply chain components.

The VSM has served as a strategic LEAN tool for decades that employs a material and information flow diagram documenting every step of a process in high detail, typically focused on a facility. It is a method of creating a “one page picture” of all the processes that occur in that company, from the time a customer places an order for a product until the customer has received that product in their facility. The VSM is a fundamental tool used to identify waste, reduce process cycle times and serve as a catalyst for enterprise improvement.

While an advanced suite of technology applications can foster improvements to a certain level, the application of the extended LEAN methodology across the supply chain, closely tied to an advanced technology suite, can create improvement in every area of the enterprise. As a result of this powerful combination that a best-in-class 3PL brings, companies not only survive in a competitive environment, but also thrive as agile, adaptive and dominant players.