Real-time communication and global collaboration is critical for managing a modern supply chain. Technology is democratizing access to tools that enable these capabilities for companies of all sizes. Yet, the logistics industry has been slow to adapt. This is a missed opportunity for any manufacturer or retailer who relies on offshoring to meet their production demands.
Managing overseas production is difficult. While manufacturing technology and the global logistics infrastructure are constantly working to make the world a smaller place, success is hindered by distance, time zones, language, and culture. Communication challenges between factory operations and far-off logistics departments result in poor and inefficient decision making related to shipping, and a troubling lack of visibility that can affect the entire supply chain.
The initial reason for this type of interference is very straightforward. When companies outsource production to a third party, the gain in manufacturing efficiency and cost savings is often offset by the loss of control. Not owning the factory where your goods are manufactured means that communication between production operations and logistics becomes harder – sometimes even non-existent. As communication bogs down, key data necessary for decision making in the supply chain is lost.
Consider the core function of any logistics operation: coordinating the pick-up and delivery of shipments. Very few companies have logistics employees working inside the overseas factories that produce their goods. This typically means that the freight booking and document exchange process for shipping the product is managed through a mess of emails and phone calls. It’s inefficient and uncoordinated.
Creating the best possible collaborative process means that the teams working on production share real-time information, and the logistics organization is equally transparent about shipment information. This ensures that the optimal routing decisions are made and the booking process runs smoothly.
For any company, the adoption of collaborative booking is a simple and direct way to bring transparency and better decision making into their supply chain. As a centralized document exchange workflow between all parties, it provides benefits regardless of who is assigning the carrier or paying the freight bill. Technology improves communication and opens up access to information that facilitates decision making.
The visibility afforded from collaborative booking improves the supply chain by enabling better planning for more optimized carrier and mode selection. This provides easily quantifiable savings in the form of reduced shipping and OPEX costs, the expensive burden of exception management or data errors across parties is easily mitigated.
As collaborative booking pushes key supply chain information upstream and makes shipment execution more efficient, customs clearance, trucking, and notification at inbound receiving centers also become more efficient.
With this collaborative methodology, we always know the status of products and their location within the supply chain. We can answer important questions about inventory such as “Has it been produced yet?”, “Is it in transit?”, or “What’s the ETA from the factory?” in real time. Technology platforms can provide information about the location of a load, its delivery ETA, and precisely what product is in a container.
Finally, a collaborative environment can enable sales to make and keep commitments to customers. It offers certainty about inventory levels and product availability, even when a product is currently half way around the world. This confidence translates into increased revenue and margin.
In the era of multinational manufacturing and supply chains, companies should use technology to implement collaborative booking to help people and businesses communicate. It not only makes the world smaller and easier to navigate, it improves the bottom line.
NO.3 January 2017
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