Strategic Logistics Management: The Importance of Flexibility
We continue our ongoing 11 part series on strategic logistics management to include information on both warehousing and transportation management. We started the series with an overview of the 10 areas that allow you to have a competitive advantage if you have a strategic logistics mindset. We will go into more detail with each post in the series. We've already covered the following, listed below, for you to easily catch up on:
- 6 Strategic and Proactive Tips to Stay Ahead of Distressed Shipments
- Strategic Logistics: 8 Steps to Controlling Inventory Flow & Driving Warehouse Efficiency
- 5 Areas of Technology Application to Aid in Logistics Visibility and Communication for en Route Disruptions
- 6 Benefits of Applying Useable Data in Logistics For Continuous Improvement
Today we will discuss the importance of flexibility for strategic logistics management. Stay tuned over the next week or so to read the remaining 5 posts in order to have a more strategic (read: not so tactical, hurried, rushed, or resource wasteful) mindset in effective logistics and transportation management.
The Importance of Flexibility for Strategic Logistics Management
Flexibility within logistics management is crucial to maintaining efficiency and accuracy in shipping processes. Flexibility is often misunderstood as more companies move towards software-as-a-service (SaaS) models for transportation management systems (TMS). However, flexibility refers to the scalability and adaptability within a given system to improve the effectiveness of shipping processes. Take a look at the importance of flexibility in a TMS and how it helps to drive improvement for shippers through strategic logistics management.
Catalysts For Increased Flexibility
Scalability and demand from customers and suppliers have given rise to a new demand for flexibility. In a sense, flexibility makes a TMS more flexible to change. As a result, a flexible TMS allows a shipper to view potential influences in a shipment, make adjustments as necessary, and maintain more communication between parties in the shipping process.
Additionally, compliance and visibility concerns are driving the demand for flexibility. Flexibility allows an organization to ensure compliance statutes are met. If a violation occurs, a flexible system can identify how the violation occurred, what actions need to be taken to resolve the issue, and how such issues can be prevented in the future. Furthermore, a flexible system helps to increase control over incoming and outbound shipments, which further drives shipping.
A final reason for increasing flexibility includes the unpredictability in shipping. Within hours, the supply and demand for a given product may change drastically, and shippers need to be able to meet these fluctuations. However, meeting such fluctuations means keeping too much inventory on-site, which results in inefficient use of space. A flexible TMS should consider historic data for time periods and changes in transportation methods and devise a solution to address each problem. Once these solutions have been proposed, a transportation manager can make a decision on which solution will be the best way to approach a given problem. As a result, the overall scope of a shipper’s processes will improve to meet the uncertainties of future shipping issues when technology enables flexibility and yields strategic logistics management.
Core Components of Flexibility
Flexible and strategic logistics management includes three key means of improvements: delivery models, functionality, and services.
Delivery models are primarily comprised of SaaS subscriptions, which can be expanded or retracted to meet the company demands. Furthermore, SaaS TMS allows an organization to reduce costs by identifying correlations between KPIs and similar data, which results in more efficient processes and accountability throughout the process.
The functionality of flexibility is achieved by instilling best practices, such as those used when a shipment becomes distressed, to enact change across a shipper’s business processes. These tools should have the ability to change to meet the demands of the shipper. For example, the TMS may gather data about a distressed shipment, advise other shippers of the error, and devise a solution to prevent future problems.
Combining these factors into different services makes up the last part of a flexible system. A given TMS should be able to perform benchmarking analyses, assess transportation procurement, and change the overall program to enhance outcomes.
Traditional Flexibility Versus Modern Flexibility
Traditional flexibility meant adjusting delivery schedules to meet the expectations of when drivers and shipments would arrive and be ready for processing. Modern flexibility involves the use of data analytics to discern where problems arise and how such problems can be addressed. Basically, this involves the eradication of data that does not benefit the shipper, providing accurate logs of information to all parties in the shipping process, and verifying all shipped materials are included in the shipment.
Furthermore, modern shipping includes the “break-apart” aspects of traditional flexibility models. For example, shipping several smaller items via smaller trucks may be more effective than shipping a single load across a given mode of transport. This move away from tactical logistics management to strategic logistics management ultimately achieves the goal of reducing waste, that is, reducing unnecessary cost.
Role of a Routing Guide in Today’s Strategic Logistics Management Powered by TMS
Some shippers may feel a routing guide lacks a place in modern shipping practices. However, the routing guide is actually all of the instructional materials, which are typically built into a given TMS. The routing guide accounts for possible variables and factors in transportation and advises individuals on how certain solutions will affect the outcome of a given shipment. A flexible TMS must take an individual organization’s goals and values into consideration in the creation of a digital routing guide.
The routing guide should not act as a single, unchanging resource for drivers, distribution centers, and others in the shipping process. Instead, the routing guide must grow to meet the changes and demands of customers and suppliers. If a given shipment becomes distressed, the routing guide should identify the best way to access the materials in the shipment. This is the integral concept and makes up a significant part of an effective strategic logistics management program. The purpose is to get products to destinations quickly and efficiently.
Adapting to change is part of human nature, and adaptability spans human civilization and transportation processes. As a result, flexibility is an inherent aspect of all efficient transportation processes. Since future needs in shipping are difficult to identify, without considering data from previous events, a given TMS should be able to adjust to meet different scenarios and demands. Ultimately, the use of data in a TMS is the driving force behind improving flexibility and efficiency within a shipper’s processes ensuring that strategic logistics management is an easier pursuit.